VW total recall: Here's why Motherson Sumi can be impacted

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Moneycontrol BureauMotherson Sumi Systems, which supplies components to several brands of the Volkswagen group, suffered yet another blow after Germany’s ministry for transport on Thursday ordered the carmaker to mandatorily recall all diesel cars fitted with emission test cheater software across Europe. The move will see the German automaker recalling nearly 8.5 million VW diesel models —basically the entire fleet of rigged cars in Europe. Volkswagen group contributes significantly to Motherson Sumi's revenues and the recall will have ramifications on Motherson Sumi's books. Analysts say the move can be seen as a definite risk to the company. Volkswagen on its part has admitted to manipulating emission test results by fitting doctored device in 11 million diesel cars worldwide. The admission puts a question mark on German auto industry that is central to its economy. The Motherson Sumi stock opened 1.5 percent down on the BSE at 247.35 which shows it has not factored in the overnight news. Here's why the Motherson Sumi can be impacted:

• Volkswagen contributes nearly 12 percent to Motherson Sumi's consolidated revenue
• Most of the company's sales are to Europe
• VW repairs may stretch beyond the end of 2016
• Possible cutback in orders to all Volkswagen suppliers
• Recall a sentimental negative