GM says ‘nobody’ makes money in Europe as VW sees bankruptcies

Shares Fall

Volkswagen fell as much as 2.3 percent to 143.05 euros, the lowest intraday price since Sept. 12, and was trading down 2.2 percent at 3:01 p.m. in Frankfurt. Fiat declined 1.9 percent to 4.24 euros in Milan. Peugeot rose 0.3 percent to 6.05 euros in Paris after Varin said the French carmaker’s cash burn will end in 2014 and that it will reach savings targets for 2015.

Daimler AG, the world’s third-largest luxury-vehicle maker, said Sept. 20 that earnings at its car division will drop in 2012 as the European market decline hurts second-half business, and that the Stuttgart, Germany-based company is undertaking an efficiency program in response.

CEO Dieter Zetsche declined at a Paris show press event today to outline details of the program because Daimler is still working out measures. Efficiency and sales growth should be seen as “two sides of the same coin,” he said.

Auto dealers in Germany, the region’s biggest economy, offered discounts on average of 12.1 percent off the sticker price last month, according to Autohaus PulsSchlag.

Matching 1995

The ACEA trade group for carmakers in Europe is forecasting that car sales in the region this year will be at the lowest level since 1995. European auto deliveries may get worse before improving, Poetsch said last night, adding that the current market has never been more difficult to assess.

GM’s Docherty said the deteriorating environment is being driven by government austerity measures and declining consumer confidence.

“In the past, countries have been able to stimulate the industry through scrappage programs,” she said. “The countries are in such a state that they don’t have the ability to pull those levers. We’re not seeing any quick fixes to this.”

Industry deliveries in western Europe may decline to 15.1 million or 15.2 million, Docherty said. Sales may drop to the “neighborhood” of 14.3 million to 14.5 million vehicle next year, she said.

<< Page 2 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome