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Dieselgate and its expected consequences on the European auto ABS market

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  • Schiereck, D.
  • Hachenberg, B.
  • Kiesel, F.

Abstract

Along with the ‘Dieselgate’ scandal more and more consumers in continental Europe are expected to decide no longer to buy a new car but to lease it to transfer reselling risk to the leasing company. This change in behavior can have consequences for refinancing loan and lease contracts via auto asset-backed securities (ABS) transactions, especially in Europe. We empirically analyze auto ABS in Europe and the U.S. with a focus on loan and lease transactions. We find that the European market did not differentiate between loan and lease contracts as collateral for ABS, while the U.S. market significantly preferred prime loans over lease contracts. If leasing becomes more common in Europe, too, we expect that investors will react more sensitively to changes in the composition of auto ABS and require higher yields resulting in worse refinancing conditions for European ABS.

Suggested Citation

  • Schiereck, D. & Hachenberg, B. & Kiesel, F., 2018. "Dieselgate and its expected consequences on the European auto ABS market," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 106637, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:106637
    DOI: 10.1016/j.econlet.2018.07.044
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/106637/
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    Cited by:

    1. Anna Adamik & Michał Nowicki, 2019. "Pathologies and Paradoxes of Co-Creation: A Contribution to the Discussion about Corporate Social Responsibility in Building a Competitive Advantage in the Age of Industry 4.0," Sustainability, MDPI, vol. 11(18), pages 1-38, September.

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