mumbai intense pressures in the global automotive industry could explain why volkswagen was driven to cheat emissions tests according to a new book published last month academics from said business school university of oxford and university of edinburgh business school argue the scandal is the latest in a series of car industry crises to stem from a perfect storm of challenging conditions based on a historical analysis of manufacturers performance professors matthias holweg and nick oliver say long term overcapacity in the industry results in low margins for many carmakers combined with the sectors vulnerability to swings of the economic cycle this means auto companies are prone to periodically dip in and out of crisis as demonstrated in the failures of car firms including saab and rover the research shows that competence in designing and manufacturing cars although a necessary condition for survival may no longer be sufficient to guarantee it the study concludes that resilience in the auto industry stems from four factors efficient operations to provide a competitive offering in the marketplace sufficient production volumes to provide economies of scale or failing this a strong enough brand to command premium prices that allow economic operation at lower volumes market reach in terms of presence in a a range of markets to offset the effects of recession in any one market and b in rapidly growing markets where margins are usually higher support of powerful stakeholders committed to the continued operation of the firm who provide support and concessions during troughs when all other measures have failed based on the analysis holweg and oliver argue the most resilient car companies in the world are likely to be hyundai toyota honda and general motors meanwhile psa and fiatchrysler appear most susceptible to crisis professor holweg said how to succeed in the global automotive industry has been a subject of extensive research over the years the general conclusion has been become more efficient and you will succeed our review of failures and nearfailures in the global car industry reveals that operational effectiveness matters but in itself is insufficient in explaining whether firms live or die professor oliver said in the case of vw its corporate objective of becoming the largest car maker in the world created huge pressures within the company and demanded a dramatic increase in its sales in north america vws strategy to achieve this was clean diesel but this had to be executed within a tight envelope of engine power emissions standards and fuel economy something had to give and in vws case what gave was the integrity between emission testing and ontheroad performance all car companies face these kind of pressures but most do not respond by gaming the system so blatantly the findings are published in a new book crisis resilience and survival lessons from the global auto industry by professor holweg and professor oliver which charts the evolution of the global automotive industry focusing on lessons from the