This study seeks to clarify the interrelations between Volkswagen\'s innovation management, environmental sustainability, and market positioning as components of its corporate strategy in recent years. In 2015, Volkswagen became embroiled in an emissions scandal in the US and globally. The cornerstone of the diesel-scandal could be the fact that the german automobile industry has agreed on exhaust gas purification and technical standards. In the meanwhile, it is not just Volkswagen who circumvents the US Environmental Protection Agency\'s emissions guidelines by equipping its vehicles with devices that interfered with the operation of their emission control systems, especially for diesel under various brands.\' This scandal may follow from there initial failure to develop an economically and environmentally sustainable business model. Both the backlash to this scandal and Volkswagen\'s, Daimlers, Audi, Porsche and BMW\'s recovery of its market share can be expected to be closely related to the market importance of sustainable consumption. While technological innovation already forms an important part of their business strategy, its market competitiveness has primarily rested on premium brand car sales. This case study indicates that a successful repositioning of Volkswagen in the global marketplace will demand both a targeted, ecological sustainability-oriented deployment of VW\'s technological assets and a reframing of VW\'s corporate image in environmentally friendly terms as a basis for the long-term economic sustainability of the firm.