Capitalist Review

Financial Products Reviewed

Is ‘Dieselgate’ nothing more than a small ripple in the German sea?

October 26, 2015 by CapitalistReview Leave a Comment

Is ‘Dieselgate’ nothing more than a small ripple in the German sea?A lot is written about the emission-rigging software for diesel cars of German carmaker Volkswagen. This scandal is by many dubbed ‘dieselgate’. Some media and analysts claim that the aftermath of ‘dieselgate’ would have lasting effects. Not only Volkswagen would deeply suffer, but the whole image of manufacturing country and export champ Germany would take a heavy hit. ‘Made in Germany’ which stands for quality products could potentially no longer impress consumers. However, while the full effects have yet to become visible, recent business confidence shows little scratches for German businesses, on the contrary.

The leading business climate index presented by think tank Ifo declined just a notch to 108.2 in October from 108.5 in September. Analysts estimated a drop to 107.8. Although German business were slightly less satisfied with the current situation, their view on the future improved. What’s more astonishing, the Volkswagen scandal seems to have no impact on the automotive industry. The index for the sector continued to rise in October. Judgement of both the current business situation as well as expectations improved. The companies even plan to ramp up production.

But there’s one shade: exports are not expected to provide an additional boost. This doesn’t necessarily mean that ‘dieselgate’ has a strong impact. Concerns about the growth potential in emerging markets, in particular Brazil and Russia, could have contributed to this assessment. Also the US economy dampened export expectations, which is somewhat odd given the weaker Euro compared to the US Dollar which should boost exports. After the last ECB monetary meeting, the EUR declined even further. Ifo economist Klaus Wohlrabe said in an interview to Reuters that the Ifo Index showed “no noticeable effects from the monetary policy pursued by the US Federal Reserve and ECB”. Probably an indication that financial watchers tend to exaggerate the importance of monetary policy making on every day business…

Another interesting point was that although business climate declined for the third month in succession, capacity utilization rose to 84.4%. Combined with Germany’s low unemployment, 6.2% in September, this in an encouraging sign. German manufacturers are not yet at full capacity, but increasing utilization could have a beneficial effect on capital investments. Many German employers, especially the small and medium enterprises, complain about a lack of skilled workers available. By investing in newer machines, this problem could be circumvented.

Back to Volkswagen: it is clear that the company’s sales will be impacted. However, while in the US dealerships are slashing prices, German buyers seem little impressed. According to a recent study (after the scandal hit the newswires), two-thirds of Germans still believe Volkswagen produces quality cars. 75% of them can imagine to buy a VW sooner or later. In addition, 63% believes within one year, ‘dieselgate’ will be forgotten. 60% thinks the brand name “Made in Germany” will not face a long-lasting damage. We can’t call Germans naïve, 91% of respondents believe other car makers are rigging as well. But we have to keep in mind that the German population is very proud of their cars.

Does this all make shares of Volkswagen a buy? Certainly not, the risk of larger than expected claims still exist. Currently the company took a provision of EUR 6.5 billion (USD 7.3 billion), but some market players expect claims of roughly USD 18 billion. The full scale of the scandal and forthcoming claims is not clear, which creates uncertainty. From a risk / reward-perspective, Volkswagen-shares are not attractive.

Contents hide
1 Share this:
2 Related

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)

Related

Is It Time To Buy Tesla Stock?
Iran Nuclear Weapons Deal to be Major Issue for 2016 Elections

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Posts

  • Jet Blue Mastercard Activate and Review (Barclaycardus Activate Online)
    Jet Blue Mastercard Activate and Review (Barclaycardus Activate Online)
  • www.mercurycards.com/activate - Login to Activate Your Mercury Mastercard
    www.mercurycards.com/activate - Login to Activate Your Mercury Mastercard
  • Best Buy Account Credit Card Login, Activation, & Review
    Best Buy Account Credit Card Login, Activation, & Review
  • AmericanExpress.com Confirm Card (2022 AMEX Card Review)
    AmericanExpress.com Confirm Card (2022 AMEX Card Review)
  • GetMyOffer.CapitalOne.com - Card Application for 2022
    GetMyOffer.CapitalOne.com - Card Application for 2022
  • Upstart.com My Offer Code, Refinance, & Reviews
    Upstart.com My Offer Code, Refinance, & Reviews
  • FirstNationalCC Apply (Card Review & App - Updated 2022)
    FirstNationalCC Apply (Card Review & App - Updated 2022)
  • www.AspireCreditCard.com Pre-Approved/Acceptance Code (2022)
    www.AspireCreditCard.com Pre-Approved/Acceptance Code (2022)
  • www.wellsfargo.com/myoffer reservation number - Respond to Mail Offer
    www.wellsfargo.com/myoffer reservation number - Respond to Mail Offer
  • www.homedepot.com/applynow With Reference Number (2022)
    www.homedepot.com/applynow With Reference Number (2022)




Pages

  • About Capitalist Review
  • Affiliate Policy
  • Capitalist Review
  • CapitalistReview Merch
  • CapitalistReview Privacy Policy
  • CapitalistReview Terms of Use
  • CapitalistReview.com
  • Contact
  • Sponsored, Guest Post, and Advertising

Categories

  • Credit Cards
  • Investing
  • Banking
  • Loans
  • Mortgage
  • Capital One Credit Card
  • SoFi Student Loans

Recent Posts

  • JJillCard.com: Make a Payment & Update Account
  • GetMyOffer.CapitalOne.com – Card Application for 2022
  • OpenSkyCC.com/Activate: MyAccount Online Account Activation
  • Exxon Mobil Credit Card Login, Application, & Review
  • Can You Use a Walmart Credit Card at Sam’s Club? (FAQ)

Navigation

Capitalist Review Sitemap

Contact Us

Popular

Jetbluemastercard.com/Activate

mercurycards.com/activate

www.barclaysus.com/activate

Recent Posts

  • JJillCard.com: Make a Payment & Update Account
  • GetMyOffer.CapitalOne.com – Card Application for 2022
  • OpenSkyCC.com/Activate: MyAccount Online Account Activation
  • Exxon Mobil Credit Card Login, Application, & Review
  • Can You Use a Walmart Credit Card at Sam’s Club? (FAQ)

RSS Capitalist Review

  • JJillCard.com: Make a Payment & Update Account May 25, 2022
    JJill Card Payment You can pay your J. Jill credit card in a variety of different forms, the easiest being online. In order to pay your bill online please visit https://d.comenity.net/ac/jjill/public/home and click on the “sign-in” tab. This will allow you to access your account homepage. Please note those who are new to the card […]
    CapitalistReview
  • GetMyOffer.CapitalOne.com – Card Application for 2022 May 24, 2022
    Get My Offer From Capital One (Quick Summary) A credit card offer from Capital One Almost always arrives by US Mail in the form of a promotional application Intended for consumers with a good to great credit score If you receive this offer you should be happy as you have a great credit score The […]
    CapitalistReview
  • OpenSkyCC.com/Activate: MyAccount Online Account Activation May 22, 2022
    Activate an OpenSky credit card online Simply rev up the old PC and head on over to www.openskycc.com/activate and follow the on-screen instructions. Activation will take about 5 minutes to complete. Please note in order to obtain the OpenSky credit card you must be 18 years of age or older and a legal resident of […]
    CapitalistReview
  • Exxon Mobil Credit Card Login, Application, & Review May 22, 2022
    Exxon Mobil Credit Card Login If you are an Exxon Mobil credit card customer and are looking to take your credit card online please visit citiretailservices.citibankonline.com and follow the on-screen prompts. You must provide an email address, Alternative site logins include exxonmobilcard.com login and https://citiretailservices.citibankonline.com. Please note you must be 18 years of age or […]
    CapitalistReview
  • Can You Use a Walmart Credit Card at Sam’s Club? (FAQ) May 22, 2022
    Can you use a Walmart credit card at Sam’s club? Walmart issues two credit cards: Walmart MasterCard and the Walmart Rewards Card. You must be 18 years of age or older and a legal resident of the United States. Both Walmart credit cards can be used at Sam’s Club. Visit walmart.capitalone.com to learn more about […]
    CapitalistReview

You can trust the integrity of our balanced, independent financial advice provided by Capitaliat Review. CR may, however, receive compensation from the issuers of some products mentioned in these articles. Opinions, reviews, analysis, advice, and thoughts are the author’s alone and his/her alone only. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted.

pages

  • About Capitalist Review
  • Affiliate Policy
  • Best Credit Cards of 2016
  • Capitalist Review
  • CapitalistReview Merch
  • CapitalistReview Privacy Policy
  • CapitalistReview Terms of Use
  • CapitalistReview.com
  • Contact
  • IndigoCard.com Apply – Indigo Platinum MasterCard Review
  • Sofi.com/Refinance1: Pre-Selected Refinance Promotional Offer Worth It?
  • Sponsored, Guest Post, and Advertising
  • Student.DRBank.com/BigSavings – Refinance Student Loan with DRB?
  • www.Betterment.com/Start – 5 Reasons to Invest with Betterment
  • www.cashnetusa.com/approved – Prequalified Loan Offer
  • www.SaveWithProsper.com – Prosper Loan Review for Borrowers
  • www.sofi.com reviews – SoFi Review and Sign Up Bonus
  • www.trysofi.com – Student Loan Refinancing From SoFi Worth It?
  • www.upstart.com/myoffer – Upstart Loan Application
  • Best Credit Cards
  • Best Credit Cards For Foodies
  • Coronavirus Home Refi?

© 2016–2022 Capitalist Review