 The trade body warns that car production will have to be cut |
The downturn in the German car market is “at a pace and magnitude that has never happened before”, the country’s main auto trade body has warned.
As a result, the German Association of the Automotive Industry said new car sales in 2009 are expected to be the worst since reunification in 1990.
It added that Volkswagen, Daimler and Porsche will all have to cut output, which will “impact” on workers.
Last week Porsche delayed its takeover of Volkswagen, blaming falling sales.
Porsche said there were signs of a “serious slump” in global demand.
Challenging
Volkswagen itself has warned that the current sales environment is “difficult”, while Daimler, owner of Mercedes-Benz, said the situation is “very challenging indeed”.
German car sales are expected to slip to 2.9 million next year, down from the expected 3.1 million for 2008, says the trade body.
Car sales are also lower across Europe, with Italy’s Fiat warning that its 2009 profits could fall by 65%.
Meanwhile Toyota, Honda and Nissan are all trimming production at their European plants.
US loan request
In the US, the big three American car firms – General Motors (GM), Ford and Chrysler – have submitted proposals to Congress for multi-billion dollar loans they say are vital to their survival.
They have asked for a combined total of $34bn (£22.8bn; 26.8bn euros).
Meanwhile, the Swedish government has said it would be prepared to offer financial support to Ford subsidiary Volvo, and GM unit Saab.
However, it said it would not be interested in nationalising the two companies.
Page last updated at 14:05 GMT, Wednesday, 3 December 2008
Source: BBC News