From their position atop the supply chain, German metal producers and recyclers stand to be severely affected by Volkswagen's falsified emissions scandal. The German metal traders association VDM compared the crisis to a "wildfire" that could spread dangerously through the industry. VDM expects a drop in incoming orders of 10 per cent.
According to VDM, Volkswagen and its suppliers buy approximately 600,000 tonnes of metals per year either directly or indirectly from German metal companies, constituting a market revenue share of about 20 per cent. The German automobile manufacturer is by far the largest customer in the country's metal trade - the Wolfsburg VW automotive plant is the world's largest - and thus represents a high concentration of risk, commented VDM president Thomas Reuther. "Contracted quantities are being postponed or sometimes even cancelled altogether. As a result, we fear a 10 per cent fall in orders,” said Mr Reuther. There could also be middle to long-term repercussions for employment in the metalworking and scrap recycling industries.