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Carmakers' financial woes continues

General Motors said yesterday it didn't need $2 billion of Government emergency aid because it had cut costs.

The carmaker had previously asked to be given the money for this month, reports The Financial Times.

Meanwhile Volkswagen predicted an "extreme" year of falling earnings and cost cuts and said it would reduce investments by two billion euros (£1.8 billion) and costs by one billion euros (£918m).

It warned of a large profit drop, but not loss, this year.

The downturn's also affected BMW which net profits tumbled nearly 90% to 330m euros ( £306m) last year.

 

Its earnings were hit by 2.4bn euros (£2.2bn)of exceptional costs linked to debts, personnel costs and provisions to cover risks on used car markets, reports the BBC website.

The European Investment Bank has given BMW a 400m euros (£367m) loan as part of a wider 3bn euros (£2.7bn) loan package for the European car industry.

The money will go to German, Italian, French and Swedish carmakers with most of it aimed at improving fuel efficiency and reducing carbon emissions.

The EIB said it expected to approve a further 2.8bn euros (£2.5 bn)of loans to the industry in April and May.

This takes its total lending to the sector to 6.3bn euros (£5.7bn) since December.

 

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