German industrial orders fell unexpectedly in August as demand from non-euro zone countries weakened. As Ivor Bennett reports, it's raised worries a slowdown in China will cut into exports from Europe's biggest economy.
For so long the world's manufacturer of choice. Germany known for quality you could trust. But is that about to change? It's a spectre raised by a shock fall in industrial orders. Down 1.8 percent in August, despite predictions of a 0.5 percent rise. NAB's Nick Parsons. SOUNDBITE (English) NICK PARSONS, HEAD OF MARKETS STRATEGY, NAB, SAYING: "Germany's doing what everyone classically does in this situation, which is to blame a lack of overseas demand. Now this may work for one country individually, but of course in aggregate, it's mathematically and logically impossible, for it to be everyone else's fault." China's slowdown is no doubt having an effect. Hence Angela Merkel's visit to India in the hope they'll go someway to bridging the gap. But Brand Germany is suddenly not such an easy sell says Parsons, as the VW emissions scandal continues to deepen. SOUNDBITE (English) NICK PARSONS, HEAD OF MARKETS STRATEGY, NAB, SAYING: "I don't think it's under threat terminally but it's certainly tainted in the very short term. Germany, if it stood for anything, it was quality and integrity. Now, the quality is undoubted, it's the integrity where there are question marks. And it'll be interesting to see the extent to which customers really do care about that or whether they just want the quality, whatever the price, and to hell with the consequences." Volkswagen shares fell 3 percent in early trading, after a letter showed it had cheated emissions tests on 8 million vehicles in the EU. Its sales in South Korea also fell. All eyes now on those of other auto makers like Daimler and BMW, to see how far the contagion has spread.