The economic crisis threatening to topple global car makers rocked two of Europe's biggest today as BMW posted a surprise fourth-quarter loss and Volkswagen warned of worse ahead.
BMW, the world's largest premium carmaker, reported quarterly earnings sharply under estimates. It posted earnings before interest and tax of €921m compared with estimates of €1.536 billion and down from €4.2 billion last year.
Net profit came in at €330m after the disastrous quarter, and as a result, the company proposed cutting its dividend to 30 cents per share.
German peer VW, meanwhile, warned 2009 would be one of the hardest in its history. Volkswagen CEO Martin Winterkorn said he still expected Europe's largest car maker to make a profit in 2009, but reiterated that vehicle sales, revenue and earnings would all decline.
'A difficult 2009 lies ahead of us - one the most difficult years in our company's history,' he said.
On the topic of US rival General Motors' European woes, BMW reiterated it had no plans to take a stake in the company's German unit, Opel, denying a newspaper report.
GM officials are due to meet the European Union tomorrow to discuss the fate of the struggling car maker's European assets. GM Europe submitted a rescue plan for Opel at the end of February, under which its German unit, along with the UK's Vauxhall Motors, would be partly spun off from its parent and would need €3.3 billion in state aid.
The German government has yet to decide on whether to grant aid to the carmaker, which employs around 25,000 people in Germany. It is also seeking help from other European governments.
Opel has obtained a loan guarantee from Spain, but still needs €2.6 billion of the same from Germany, the head of GM Europe told a German newspaper.
Meanwhile, GM's Swedish Saab unit said today it had given 750 workers at its Trollhattan plant notice of redundancy. A Saab spokesman also said that a group of Swedish investors had shown interest in the unit.
Measures to tackle the global sector malaise continued elsewhere in Sweden, with Ford-owned Volvo Car Corp agreeing with unions to cut 750 jobs in a deal which was likely to mean the avoidance of further job cuts at the struggling car maker.
In the UK, the government said it had received clearance from the European Commission to go ahead with a £2.3 billion aid package to its ailing car industry, and called for manufacturers to apply for funds.
In a rare bright note for the crisis-hit industry, a senior Volvo executive said he saw China sales growth accelerating to over 10% in 2009, helped by a rebound in consumer sentiment.
