Automakers fear bleak 2009 as demand plunges

Daimler, Hyundai Motor and Fiat added to the gloom facing the autos sector with bleak forecasts for next year, as the global financial crisis took its toll.

The news from Europe and Asia came as Daimler's US affiliate, Chrysler, cut a shift at a Toledo plant and brought forward the closure of its Newark (Delaware) operation. Germany's Daimler, maker of Mercedes-Benz luxury cars and heavy trucks, lowered its expectations for the year, adding that all of its forecasts had a high degree of uncertainty to them.

Italy's Fiat said global demand for its products could drop 10-20 per cent and its profit tumble by as much as 65 per cent in a "worst-case" scenario.

At Hyundai, South Korea's top car maker, a senior official expected demand in emerging markets to fall next year. Global car makers face a sharp drop in sales as drivers put off major purchases on fears of a recession and the cost - if not the lack - of getting loans.

The market had expected their outlooks to be bad but they did not know how bad until Thursday when the first batch of results from the sector came out.

Daimler cut its revenue and profit forecast for this year after reporting a plunge in its third-quarter results by two-thirds.

"We are in a situation that is very challenging," Daimler chief executive officer Dieter Zetsche said in a statement.

But the company said its situation was strong: "Despite the ongoing financial market crisis, the group has a solid financial position, which should also remain stable throughout the rest of the year."

Fiat said its trading profit could plunge by as much as 65 per cent next year, and although the maker of cars, trucks and tractors called its forecast a "worst case" scenario, analysts saw it as definitive. "It will be seen as a profit warning," one analyst told Reuters.