What Volkswagen signifies to the German economic system
Volkswagen: Created in Germany
The Volkswagen emissions scandal will price billions and could tarnish the entire German car industry.
The firm had produced daring claims about getting greener than other automakers, and had a status for dependability and good quality engineering. Abruptly, the “Produced in Germany” branding isn’t going to appear so hot any longer after it apologized for cheating on diesel auto emission tests .
“If nobody else has carried out it, the injury would be limited. If it appears like it is far more businesses, not just Volkswagen, it would be a key issue for the German auto sector, and the German economic system overall,” stated Theo Vermaelen, a finance professor at INSEAD.
Volkswagen ( VLKAY ) — which owns other top manufacturers like Porsche , Audi and Lamborghini — overtook Toyota ( TM ) as the world’s leading carmaker by sales in July, but that place is now at risk, say analysts.
Right here are seven key information that present what’s at stake:
one. The Volkswagen group accounts for roughly one particular in 10 cars sold globally*.
two. The auto industry is the largest industrial sector in Germany, contributing about 2.7% to gross domestic product.
three. Some twenty% of Germany’s exports are produced up of cars and parts.
four. Domestic automobile income and exports have been worth 368 billion euros ($ 411 billion) in 2014.
five. Most German auto product sales came from the Volkswagen group, which reported just over 202 billion euros in income in 2014.
6. Roughly 70% of Volkswagen vehicles are offered outside German borders.
seven. Volkswagen employs almost 600,000 individuals close to the world, and much more than a third of the 775,000 folks who perform in the auto sector in Germany.
But ahead of you start off worrying about the comprehensive collapse of the German auto business, it truly is really worth repeating that — at least for now — the scandal is constrained to Volkswagen. Other German automakers such as Daimler ( DDAIF ) , which owns Mercedes-Benz, and BMW ( BAMXY ) have said they’re not affected.
“Even a heavy drop in diesel car production and exports would possibly not subtract more than .2% from German GDP,” explained Berenberg economist Holger Schmieding. “Demand for non-diesel autos could rise and partly offset the drop in demand for diesel-powered cars.”
* Source: Euromonitor Worldwide
— Ivana Kottasova contributed to this write-up