BMW posts surprise loss

The economic crisis threatening to topple global automakers rocked two of Europe's biggest as BMW posted a surprise fourth-quarter 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.

The results showed earnings before interest and tax of €921 million compared with a Reuters Estimate of €1.536 billion and down from €4.2 billion last year.

Net profit came in at €330 million after the disastrous quarter, 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 officer 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. 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 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.

GM's Swedish Saab unit said 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 automaker.

In the UK, meanwhile, 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.

Suppliers to the industry also continue to be affected, with Finnish tyre maker Nokian Renkaat's CEO Kim Gran saying he saw a deep, relatively long global recession, with growth likely to remain weak for at least the next two years, in the firm's annual report.