Blog: Germany still depressed
Dave Leggett | 15 February 2005
Hopes have been expressed that the German consumer might, in 2005, finally shake off the depression of recent years and start to consume again, maybe with some head of steam on the back of pent-up demand. But the latest economic data doesn't look too hot. The German economy actually contracted in the fourth quarter of last year. It's fair to assume that underlying demand in the car market won't be strong right now. And with incentives a big part of the picture, making money in Germany won't be easy for the foreseeable.
It's something to add to the general gloom in Wolfsburg over Volkswagen's latest financial results. Even if they were better than some people expected, the weak dollar remains a problem with no reverse in prospect soon, China - for VW - is subject to diminishing returns and the home market remains stubbornly sluggish. A lot seems to rest on the cost-cutting programme. And the next Passat could do with being pretty good.
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