What Volkswagen means to the German economy

Volkswagen: Made in Germany
Volkswagen: Made in Germany

The Volkswagen emissions scandal will cost billions and could tarnish the entire German auto industry.

The company had made bold claims about being greener than other automakers, and had a reputation for reliability and quality engineering. Suddenly, the "Made in Germany" branding doesn't look so hot anymore after it apologized for cheating on diesel car emission tests.

"If nobody else has done it, the damage would be limited. If it looks like it's more companies, not just Volkswagen, it would be a major problem for the German car industry, and the German economy overall," said Theo Vermaelen, a finance professor at INSEAD.

Volkswagen (VLKAY) -- which owns other top brands including Porsche, Audi and Lamborghini -- overtook Toyota (TM) as the world's top carmaker by sales in July, but that position is now at risk, say analysts.

Here are seven key facts that show what's at stake:

1. The Volkswagen group accounts for roughly one in 10 vehicles sold globally*.

2. The auto industry is the largest industrial sector in Germany, contributing about 2.7% to gross domestic product.

3. Some 20% of Germany's exports are made up of vehicles and parts.

4. Domestic auto sales and exports were worth 368 billion euros ($411 billion) in 2014.

5. Most German auto sales came from the Volkswagen group, which reported just over 202 billion euros in revenue in 2014.

6. Roughly 70% of Volkswagen vehicles are sold outside German borders.

7. Volkswagen employs nearly 600,000 people around the world, and more than a third of the 775,000 people who work in the auto industry in Germany.

But before you start worrying about the complete collapse of the German auto industry, it's worth repeating that -- at least for now -- the scandal is limited 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 probably not subtract more than 0.2% from German GDP," said Berenberg economist Holger Schmieding. "Demand for non-diesel cars may rise and partly offset the drop in demand for diesel-powered cars."

* Source: Euromonitor International

-- Ivana Kottasova contributed to this article

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