October brought the lowest level of morale among investors and analysts in Germany over the past twelve months because of the unfolding diesel emissions cheating scandal at the largest European automaker – Volkswagen AG.
According to the ZEW think tank, which surveyed both investors and analysts, they fear the dieselgate crisis, the largest in the company’s 78-year history, as well as continued weakness across certain emerging markets, could jeopardize the economical prospect, the biggest economy in Europe and the largest auto market in the region. The research also signals how the VW AG crisis is impacting at large the economy of Germany just when numerous data shows the country’s industrial orders, output and exports are sliding. “The emissions scandal at Volkswagen and sluggish growth in emerging markets are dampening the economic outlook for Germany,” commented ZEW President Clemens Fuest in a recently released statement.
The main view is the largest economy of the continent will not fall into recession because of the positive outlook inside the borders, the recovering euro zone and the influx of immigrants which is seen as a mini stimulus program because it lofts governmental spending. VW AG, the biggest automaker in Europe and the largest in the world in terms of sales after the first six months, is a major employer in Germany, with around 270,000 direct jobs in the country and even more tied to the chain of supply. Additionally, the entire automotive sector has made up almost 18 percent of the exports in the country last year, says Deutsche Bank, with growth above average each year since 2009.