Leaders of the world’s biggest economies have met in Cannes to tackle major issues affecting global economic recovery and financial stability.
Last week, Eurozone leaders decided to boost the firepower of their €440 billion ($606 billion) bailout fund by seeking financing from outside investors.
The leaders of Germany, France, Spain, Italy, the International Monetary Fund and European Union institutions also discussed with President Obama ways of ramping up the IMF’s warchest to help prevent contagion from the euro zone’s debt crisis plunging the world economy back into recession.
But Reuters reports that private sector activity in the euro zone shrank at its fastest pace in 28 months in October as the debt crisis sapped new business and soured sentiment in an economy looking like it is heading into a slump.
Moving to the automotive industry, last month PSA Peugeot Citroen’s Slovak factory suspended production for nine days as orders for models assembled in the eastern European country fall. Sales of the PSA group, which also makes Citroen brand models, slumped 13.3 percent from a year earlier last month.
Now, PSA Peugeot Citroen, Europe’s second-biggest carmaker said it plans to cut as many as 6000 jobs in the region after lowering its profit target for this year.
“The competitive environment has become more challenging due to pricing pressure, which has intensified in Europe since September, and the unfavourable impact on the country mix of the fall-off in demand in southern Europe,” the automaker said.
BMW, who announced last week that most of its factories are at 110% level is already planning for slower economic growth in 2012 and possibly a recession which may lead the world’s largest premium automaker to reduce production, CFO Friedrich Eichiner said.
Daimler also reported its first earnings decline since the third quarter of 2009 – mostly because of expenses for new models.
Scania AB, the Swedish truckmaker said that demand for its vehicles was slowing, sounding a warning note for the heavy trucks sector.
“Customers have become hesitant about placing orders, mainly due to expectations of lower economic activity,” Mr Östling said.
In addition, MAN SE, the German truckmaker also said its production in the third quarter was considerably below that of the second quarter, citing initial reactions to a downturn in the market.
Volvo, the world’s number 2 truckmaker said it expects a slowing demand in southern Europe and the Middle East and would make further production cuts.
Europe’s ACEA car industry association said last week total new car registrations slipped 0.8 percent in Europe in the first nine months of the year.