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Volkswagen’s scandal hits other European car stocks

Robots weld Golf car bodies (Golf VII) during a press tour at the plant of the German manufacturer Volkswagen AG (VW) in Zwickau, central Germany, Friday, Nov. 9, 2012. More than 4 million vehicles (Golf and Passat) have left the production facilities since foundation of the Zwickau plant in 1990. (AP Photo/Jens Meyer
AP Photo/Jens Meyer
Robots put cars together, and investors are taking them apart.
By Melvin Backman
Published Last updated This article is more than 2 years old.

On the day European stocks slid to their lowest level since last month’s global financial panic, carmakers were hit especially hard.

Much of the attention in the sector has been focused on Volkswagen’s deceptive diesel emissions testing—the scandal sent its stock sinking nearly 20% for the second time in as many day. But other manufacturers’ shares are coming under pressure as well:

In the US, most passenger cars run on gasoline. However, in Europe, diesel cars are much more popular for their fuel efficiency and because diesel is cheaper than gas. So when South Korea starts eyeing all German diesels askance, and European Union officials call for industry-wide investigations, the implications are far reaching.

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