The Impact of Volkswagen Dieselgate on the Taiwanese Automotive Market

We investigate the effects of 2015 Volkswagen diesel emissions scandal in the Taiwanese new car market. Using a difference-in-differences empirical strategy and administrative data on new car registrations, we find that quarterly sales of Volkswagen fell by more than 20% in self-use market. But sales of Volkswagen quickly recovered after one year. In B2B market, business buyers did not respond to the emissions scandal. For collective reputation, we do not find evidence of spillovers to other German brands, indicating that environmental concerns in Taiwan did not extend to other brands within the same country