Automakers Consider Cutting Their 2013 Targets Due to German Drop image

As demand in Germany has dropped to the lowest level in almost three years, Daimler and other important automakers are expected to change their 2013 forecasts.

Daimler CEO Dieter Zetsche, Fiat CEO Sergio Marchionne and Ford Europe Chief Stephen Odell have all reported lower than anticipated first quarter results, adding that they might consider changing their sales forecast for this year. Analysts predict that auto sales in Europe this year will fall 5%. Germany, which accounts for 25% of Europe’s deliveries, is expected to drop this year 20% below the 2009 record to 3.04 million vehicles.

“The safe haven for the car industry, such as Germany until the last months of 2012, is now feeling the pain,” said Erich Hauser, an analyst for Credit Suisse in London. “Some carmakers might review their market forecasts for 2013, which were too optimistic at the beginning of the year.”

Sales in Germany during the first quarter dropped 13%, compared with a 9.7% fall overall in Europe. Automakers in Germany already offer increased incentives, which eat into their earnings. Peugeot and Renault increased incentives by 15.1%, Ford 14.6%, Fiat 12.9% and VW 10%. Automakers plan to cut more than 30,000 jobs in Europe and close five plants due to the financial crisis.

Source: Bloomberg