The economic crisis threatening to topple global automakers rocked two of Europe's biggest on Thursday as BMW posted a surprise fourth-quarter operating loss and Volkswagen warned of worse ahead.
Shares in BMW, the world's largest premium carmaker, were down over 11 percent at one point, after it posted quarterly earnings sharply under estimates, before recovering to trade down 3.66 percent at 1152 GMT (7:52 a.m. EDT).
The company posted a fourth-quarter loss before interest and tax of 718 million euros ($917.4 million) -- much worse than the loss of 103 million as forecast by a Reuters poll of analysts.
The disastrous quarter dragged full-year net profit down to 330 million euros, well below a Reuters Estimate average of 1.047 billion euros, and, as a result, the company proposed cutting its dividend to 30 cents per share.
German peer VW
Chief Executive Martin Winterkorn said he still expected Europe's largest automaker 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.
Volkswagen shares had edged up 0.74 percent by 1152 GMT (7:52 a.m. EDT) against a DJ Stoxx European Autos index <.SXAP> down 1.81 percent.
On the topic of U.S. rival General Motors'
GM officials are due to meet the European Union on Friday to discuss the fate of the struggling automaker'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 euros 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 euros of the same from Germany, the head of GM Europe told a German newspaper.
GM's Swedish Saab unit said on Thursday it had given 750 workers at its Trollhattan plant notice of redundancy.
A Saab spokesman also told Reuters on Thursday 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
In the UK, meanwhile, the government said on Wednesday it had received clearance from the European Commission to go ahead with a 2.3 billion pound ($3.18 billion) aid package to its ailing car industry, and called for manufacturers to apply for funds.
Suppliers to the industry also continue to be affected, with Finnish tire maker Nokian Renkaat's
In a rare bright note for the crisis-hit industry, a senior Volvo