BMW, Daimler to idle car plants as sales crash

October 26th, 2008 - 8:03 pm ICT by IANS  

Stuttgart (Germany), Oct 26 (DPA) Daimler is to idle factories for five weeks because its worldwide sales of Mercedes cars have slumped, a newspaper reported Sunday, quoting a company spokesman.The report came as Germany’s other main premium car manufacturer, BMW, announced a four-day standstill at one of its car plants, in Leipzig, eastern Germany, amid signs that the world recession will be worse than so far feared.

The Frankfurter Allgemeine Sonntagszeitung said the Mercedes closure would begin in mid-December, but gave no precise date. It said stocktaking would take place Dec 12 and plants would not re-open before an annual holiday break at Christmas.

Daimler said several days ago it was severely paring back its 2008 sales targets and saving where it could. Its third-quarter earnings of 648 million euros ($816 million) were sharply down from the 1.9 billion euros of one year earlier.

At the start of August, Daimler had spoken of cancelling shifts or complete days of output at its car plants in Germany and Tuscaloosa in the US.

BMW said the four-day halt at Leipzig, which makes 1 Series and 3 Series cars, would reduce its output by 2,800 cars. Monthly wages will be unchanged, but personnel will lose overtime credits from the past.

BMW’s three brands, BMW, Mini and Rolls-Royce, suffered a 15-percent fall in sales in September in annual terms.

US sales slumped one quarter, paring world sales to 121,000 vehicles for the month.

The German auto industry weekly Automobilwoche said German BMW dealers were demanding a 20-percent cut in their contractual allocation of BMW cars for the months from July to December this year.

In its issue to appear Monday, it said angry dealers walked out of a meeting with BMW after warning they could not afford to accept more cars into unsold stock.

General Motors’ German arm Opel has also announced output cuts, as have Volkswagen’s Spanish subsidiary Seat and Czech subsidiary Skoda.

An Opel plant at Bochum closed last Monday for two weeks, like General Motors Europe plants in the Belgian city of Antwerp and the British town of Ellesmere Port.

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