German business morale fell modestly in October, suggesting Europe's largest economy remains resilient in the face of a slowdown in China and emissions scandal at carmaker Volkswagen. Ciara Lee reports
Back in the driving seat, Toyota overtakes VW to regain the top spot in global vehicle sales. It's another blow to VW as the emissions scandal continues to dominate headlines. IHS Global Insights Jan Randolph. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK ANALYSIS, IHS GLOBAL INSIGHT "I think the focus is very much inside VW and repairing the damage that's been caused. I think the idea of regaining number one spots is currently off the cards." Easing concerns for VW though, Germany's most prominent index shrugged off the threat of the scandal. Based on a monthly survey of around 7000 firms, Germany's Ifo dipped in October, but beat forecasts. Ifo economist Klaus Wohkrabe. (SOUNDBITE) (German) IFO ECONOMIST KLAUS WOHKRABE, SAYING: "The figures suggest the VW scandal seems to have had no decisive impact on the automobile industry, the index even rose in the sector. Both the assessment of the current situation and future expectations were revised upwards." A separate index measuring corporate expectations hit a seven month high, suggesting the German economy is proving resilient to an emerging market slowdown. Neither the influx of hundreds of thousands of refugees or the loose policies of the ECB seem to be having a substantial effect. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK ANALYSIS, IHS GLOBAL INSIGHT "Increasingly consumption has been important and I think the refugees themselves might add a little bit there, on a positive side. They've got a fiscal surplus, they've got lots of ways in which they can add investment." But the German economy has been sending out mixed signals in recent months, with industrial orders, output and exports all slumping in the August. Two weeks ago, the closely-watched ZEW survey of analysts and investors tumbled to its lowest level in a year.