Falling demand and the continued economic gloom are becoming the main factors that are pulling down car manufacturers to date. Volkswagen and BMW, both known for providing classy and luxury cars in the market with a hefty tag are feeling the effects of plunging profits as both announced a first-quarter loss and German rival BMW said earnings fell after it set aside money for potential defaults by car buyers as the global recession erodes sales.
Carmakers in Europe are likely to build 25 percent fewer vehicles this year as sales fall 20 percent because of the recession, the European Automobile Manufacturers Association estimated on March 5. Volkswagen is cutting 16,500 temporary jobs and restraining production. BMW eliminated 4,000 jobs last year and will trim a further 1,000 in 2009.
(Source) Bloomberg
Tags: automobile manufacturers, BMW, car buyers, economic gloom, Europe, european automobile, global recession, volkswagen
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