GERMAN AUTOMOBILE INDUSTRY: THE FINANCIAL IMPACTS OF BRENT OIL AND STEEL

The automobile industry is nourished by two important resources: steel and oil. For this reason, the financial structure of the steel and oil industries is so important for the sake of the automobile industry and also the industrializing world. To understand the world steel market, we should concentrate on the Chinese steel market as its world steel leadership. This paper aims to make a financial analysis of these three industries by utilising DCC GARCH (Dynamic Conditional Correlation Multivariate GARCH) models. According to the main results, the German automobile industry’s financial structure is largely impacted by Brent oil returns. There is no statistical evidence of the impact of the Chinese steel futures’ returns on the returns of German automobile brands in a relationship. These findings can mean that the German automobile industry has financial immunisation against steel fluctuations but oil fluctuations. In this context, the international politics of Germany is so important, on the other side, German automobile giants and their relationships with Chinese affiliates can be another part of the conclusion.