European car companies feel the effects of dwindling sales

Marion Dakers
PROFIT slumps at Daimler, Volkswagen and Renault yesterday suggested that the decline in European vehicle sales shows few signs of bottoming out.

Daimler scrapped its earnings forecast for the second time in six months, as its first-quarter earnings from ongoing business dropped by more than half to €917m (£780m), falling short of even the bottom end of forecasts.

Sales in the period fell three per cent to €26.1bn.

The firm said full-year profits are unlikely to reach last year’s level of €8.125bn.

Volkswagen, meanwhile, stuck to its 2013 sales targets in spite of a 25 per cent slip in underlying quarterly profits to €2.34bn.

“We’re not completely immune to the intense competition and the impact this has on business,” the firm said in a statement.

Volkswagen is also reeling from a huge car recall in China after it found gearbox problems.

French firm Renault reported an 11.8 per cent drop in quarterly revenue to €8.27bn and predicted the European market would shrink five per cent this year.