The Nikkei gets destroyed -- Japan's car makers tumble on the VW scandal

Photo: Godzilla (1954), Toho Co. Ltd

Shares in the major Japanese car makers have been hammered on the Nikkei, with the fallout from the Volkswagen emissions-cheating scandal clouding the outlook for global auto makers.

Mazda was down a whopping 7% at one point and closing down 6.8% for the day. Mitsubishi Motors fell 5%. Suzuki and Isuzu were down 4%.

Car companies are among the biggest firms on the Nikkei and the overall index tanked 2.76% after a holiday yesterday.

Shares in German car making giant Volkswagen have lost around one-third of their value this week, amid revelations =the company rigged diesel cars to make them look like their emissions were lower than they actually were in order to get better environmental ratings.

In a note to clients yesterday, Morgan Stanley warned that the fallout could potentially spread to other Japanese companies who make parts for the major auto makers, noting the “risk of parts makers facing intensified pricing pressure in the event of worsening financial circumstances for VW due to a heavy fine and reduction of product prices if the brand image suffers”.

Stocks around the rest of Asia were mainly in positive territory, with the ASX fishing up 1.5% and the Shanghai Composite up 0.7% for the day.

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