Rolling coverage of the VW emissions scandal, as CEO faces the company’s board, amid new signs of trouble in China’s economy * Consumer group blasts ‘flawed’ European system * VW board to vote on Winterkorn’s future today * Chinese stocks hit by weak PMIs * The agenda: Volkswagen and Chinese PMI 8.58am BST “IT’S UNUSUAL FOR EVENTS IN A SINGLE COMPANY TO BECOME A DRIVER OF GLOBAL MARKETS BUT THAT’S WHAT IS HAPPENING NOW WITH VOLKSWAGEN”. So says Kit Juckes, senior strategist at French bank Société Générale, adding: The woes of the world’s second-biggest car manufacturer are doing nothing for economic optimism or risk appetite and they are undermining the euro, against both dollar and yen. 8.55am BST Over in Paris, shares in Renault and Peugeot have both fallen by over 5%: Peugeot down 6.3% Renault by 5% - this is contagious! 8.50am BST VW shares down 8.1% this morning, having fallen 35% in two days. Question: did anyone in the German govt know about the cheating scandal? 8.48am BST VOLKSWAGEN’S SHARE PRICE FELL AS MUCH 10% AT THE START OF TRADING IN FRANKFURT, BEFORE STABILISING. Investors are try to calculate the full damage that this crisis will cause to the company, ahead of today’s crucial board meeting. 3rd day of losses for #Volkswagen - shares fell as much as 10% when Frankfurt trading began http://t.co/m5SaEsuXKs pic.twitter.com/1XTkgXwFco 8.37am BST VOLKSWAGEN’S RIGGING OF EMISSIONS TESTS FOR 11M CARS MEANS THEY MAY BE RESPONSIBLE FOR NEARLY 1M TONNES OF AIR POLLUTION EVERY YEAR. That’s roughly the same as the UK’s combined emissions for all power stations, vehicles, industry and agriculture, a Guardian analysis suggests. Related: VW scandal caused nearly 1m tonnes of extra pollution, analysis shows 8.30am BST MIKE HAWES, CHIEF EXECUTIVE OF THE UK’S SOCIETY OF MOTOR MANUFACTURERS AND TRADERS (SMMT), IS DEFENDING THE INDUSTRY. He tells the Today Programme that Europe is improving its testing system; technology will soon allow cars to be tested on the road, not just in the labs. 8.21am BST MONIQUE GOYENS, DIRECTOR GENERAL OF BEUC, WHICH REPRESENTS EUROPEAN CONSUMER ORGANISATIONS, IS DISCUSSING THE CRISIS ON THE TODAY PROGRAMME NOW. _How much confidence can consumers have in the car industry?_ “It does not deserve the consumer’s trust if there is a cheater in the room, which there was in this case. “When you limit the resources to the market, you open the safety net and give more room to cheating” 8.13am BST THE VW CRISIS IS A BLOW TO THE REPUTATION OF GERMANY’S MANUFACTURING BASE. Professor Karel Williams from Manchester Business School, told Radio 4’s Today Programme that: Germany has been lecturing the Greeks for years on how they cheated on the budget deficit calculations and now look at this Germany’s largest company is cheating on emissions. It’s not just a crisis for the company… it is a major set of issues about ineffective regulation as in Libor… and all the rest of that. 8.10am BST GERMANY’S DEUTSCHE BANK HAS JUST CUT ITS RECOMMENDATION ON VOLKSWAGEN FROM ‘BUY’ TO ‘HOLD’, AND SLASHED ITS EARNINGS FORECASTS BY UP TO 35%. Deutsche also warned that the full magnitude of the scandal can’t be calculated yet. . @Volkswagen an "investor's nightmare" says @DeutscheBank, uncertainty on all levels...earnings estimates slashed up to 35% 2015-17 8.05am BST OVER IN SHANGHAI, THE MAIN CHINESE STOCK MARKET HAS CLOSED 2% LOWER AFTER TODAY’S WEAKER-THAN-FEARED FACTORY DATA. The news that manufacturing output is falling at the fastest rate since 2009 (see here) spooked traders, and alarmed analysts. New export orders have really collapsed. It means global trade is facing headwinds, and even China can’t escape that It’s not so bad that we need to hit the alarm button, but the decline in the economy is evident. 7.58am BST YOU KNOW YOUR COMPANY IS FACING A CRISIS WHEN ITS WOES ARE SPLASHED ACROSS THE FRONT PAGES OF BRITAIN’S NEWSPAPERS: Wednesday's Guardian front page: Deal to give homes to 120,000 refugees opens new rifts in EU #tomorrowspaperstoday pic.twitter.com/Zcgg1AuO1Q Wednesday's Telegraph front page: VW scandal: petrol cars could also be rigged #tomorrowspaperstoday #bbcpapers pic.twitter.com/Xk57VPnxLq Wednesday's FT front page: VW scandal sparks sector turmoil #tomorrowspaperstoday #bbcpapers pic.twitter.com/uFrlCYEKCd 7.50am BST VOLKSWAGEN CEO MARTIN WINTERKORN’S FATE COULD BE DECIDED TODAY, AS THE COMPANY’S BOARD MEETS TO DISCUSS THE CRISIS. The 68-year-old CEO’s survival hangs on convincing a few key power players, including Wolfgang Porsche, head of the family that controls a majority of VW’s voting shares; Bernd Osterloh, VW’s influential labor leader; and Stephan Weil, prime minister of Lower Saxony, which has special blocking rights at the company. All three are on the committee, which is set to vote on his future. 7.43am BST Traders in Frankfurt are predicting that Volkswagen’s share price will fall again today, when the market opens in around 20 minutes. No end to @Volkswagen pain today as stock already trading lower in pre-market...EU27b = 1/3rd wiped off market value last 2 days 7.31am BST GOOD MORNING, AND WELCOME TO OUR ROLLING COVERAGE OF THE WORLD ECONOMY, THE FINANCIAL MARKETS, THE EUROZONE AND BUSINESS. Two stories are going to dominate today. The unfolding crisis at German carmaker Volkswagen, and fresh fears over China’s economy after more weak economic data overnight. Related: VW chief Martin Winterkorn defiant over emissions cheating scandal Continue reading...
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