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Germany’s Economy Has a Troubled Industry in the Driver’s Seat

Carmakers, embroiled in scandal, have an outsized effect on growth in Europe's largest economy
Luxury Automobile Manufacture At A Mercedes-Benz AG Factory
Photographer: Krisztian Bocsi/Bloomberg

Germany’s lingering automaker scandal is taking its toll.

In many ways, Europe’s largest economy is looking pretty solid with record-low unemployment and booming exports telling the story of seemingly effortless expansion for most of the past three years. Yet a survey published Tuesday showing a bigger-than-expected drop in investor confidence specifically cited car manufacturers’ woes – rigging of emissions software and allegations of cartel-building – as a major factor.