The economic crisis threatening to topple global car manufacturers rocked two of Europe's biggest today 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 per cent at one point, after it posted quarterly earnings sharply under estimates, before recovering to trade down 3.66 per cent at 1152 GMT.
The company posted a fourth-quarter loss before interest and tax of €718 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 , 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.
Chief executive Martin Winterkorn said he still expected Europe's largest car manufacturer's 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 per cent by 1152 GMT against a DJ Stoxx European Autos index down 1.81 per cent.
On the topic of US rival General Motors' European oes, BMW reiterated it had no plans to take a stake in the company's German unit, Opel, denying a newspaper report.
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 euros of the same from Germany, the head of GM Europe told a German newspaper.
GM's Swedish Saab unit said today it had given 750 workers at its Trollhattan plant notice of redundancy.
In the UK, meanwhile, the government said yesterday 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.
Reuters