Volkswagen AG (VOW) is due to report its biggest quarterly earnings drop since 2009, while Daimler AG (DAI) is cutting costs to lift sagging profit at Mercedes-Benz, hinting that German carmakers have lost their immunity to Europe’s economic woes.
VW, Daimler and Bayerische Motoren Werke AG (BMW) are no longer able to entirely sidestep softening European auto demand by shifting cars to China and other markets, as the effects of austerity begin to ripple beyond Italy, Spain and Portugal.
“The European crisis has definitely reached the Germans,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. Next year, as the region’s market continues to fall, “the problems for German manufacturers will really start to kick in.”
Volkswagen, which will report its third-quarter earnings on Oct. 24, is forecast to post operating profit of 2.3 billion euros ($3 billion) for the period, based on a Bloomberg survey of six analyst estimates. That would represent a 21 percent decline from the same period last year, VW’s first significant profit drop since the 2009 global recession, when earnings fell by more than 80 percent.