Hard shoulder: EUROPEAN UNION Industry Commissioner Guenter Verheugen said car firms will get "not a cent" beyond existing help for research and development projects, dashing carmakers' hopes of loans to counter the credit crisis.
Volkswagen and PSA Peugeot Citroën are among those pushing the EU for €40 billion in cheap loans to help overcome plunging sales across Europe.
Opel, part of the troubled General Motors car giant, has appealed to German Chancellor Angela Merkel for extra incentives for buyers on top of those already agreed to stem the decline. "Nobody in the commission believes that there's a need for this," Verheugen said in an interview in Berlin.
Australia to inject €1.8 billion into its ailing local car industry
Australia's government is to inject an extra A$3.4 billion (€1.8 billion) into the ailing car industry to offset tariff cuts and a global economic slowdown, Prime Minister Kevin Rudd has announced.
Car firms build about 320,000 vehicles in Australia each year and employ about 65,000 people, around 6 per cent of Australian manufacturing. They had asked the centre-left government to delay tariff cuts to safeguard jobs.
Only three carmakers, local subsidiaries of Ford, Toyota and General Motors, make vehicles in Australia. Rudd said his government would proceed with plans to halve tariffs on imported cars to 5 per cent in 2010 from 10 per cent.
Porsche profits more on options than car sales
Porsche fuelled the controversy over its stake building at rival Volkswagen by revealing it had earned eight times as much from its VW option trades than from actually selling cars.
The company said it made €6.83 billion from trading in VW options, plus another €1 billion from the rising value of its Volkswagen stake, in the fiscal year that ended in July.
Analysts dubbed Porsche a "hedge fund", and even one of the most successful ones in the world, at a time when other carmakers are struggling with a sharp downturn.
"If they now increase their stake [in VW] to more than 50 per cent and cash in the remaining 25 per cent of the options, they would make hedge funds and banks pay for the whole takeover," said Arndt Ellinghorst, analyst at Credit Suisse.
The extraordinary gains reaped from VW options trades caused another onslaught from investors.
Klaus Kaldemorgen, head of DWS, one of Germany's largest institutional investors, alleged that Porsche had used massive information asymmetries at the expense of other investors.
However, Porsche denies any wrongdoing and blames short sellers for the massive VW share price surge in recent months.
"We vehemently reject the accusation of share price manipulation," Porsche said in a statement last week.
GM shares fall to lowest price since 1942
General Motors slid to the lowest in almost 66 years after a leading equity research firm estimated the car giant, owner of brands such as Opel and Saab in Europe, needs more than $10 billion (€7.9 billion) for auditors to consider it a "going concern" at year's end.
GM shares fell to $2.79 (€2.22), the lowest since December 29th, 1942. "GM's liquidity position is dwindling rapidly given the expected automotive cash burn," said Joseph Amaturo, an analyst at Buckingham Research Group. "The potential government capital injection would have to be well north of $10 billion," he stated yesterday.
GM's chief executive Rick Wagoner is cutting jobs and shutting plants after almost $73 billion (€58 billion) losses since the end of 2004. He told Automotive Newsthat GM needs an aid package before President-elect Barack Obama takes office in January.