Will Volkswagen scandal tarnish 'Made in Germany' image?

Parent company Lufthansa has faced questions over why it failed to identify the psychological issues suffered by the pilot who intentionally flew the plane into a French mountain.

"Not only does this make Germany look bad, I think that Germany has been very good at moralizing to the rest of Europe about the financial crisis and other things," said Michael Hewson, chief market analyst for CMC Markets in London.

The EPA accused VW of installing the so-called "defeat device" in 482,000 cars sold in the U.S. VW later acknowledged that similar software exists in 11 million diesel cars worldwide and set aside 6.5 billion euros ($7.3 billion) to cover the costs of the scandal.

Industrial conglomerate Siemens AG acknowledged dubious payments of up to 1.3 billion euros in a bribery case that came to light in 2007 and prompted the departure of the company's then-CEO and board chairman.

Hartmut Dziemballa, who conducts image research for Germany's GfK institute with a focus on the automotive and airline sectors, said past scandals have not had lingering effects and that he didn't expect the Volkswagen scandal would significantly affect other German manufacturers — even car companies.

Carsten Brzeski, an analyst with ING in Frankfurt, said while "the reputational damage is currently impossible to assess," because of its size even if the main impact of the scandal is limited to Volkswagen it could have serious economic effects on the German economy overall.