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Autos hit by Schaeffler warning as Geneva show ponders potholes ahead

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Autos hit by Schaeffler warning as Geneva show ponders potholes ahead

Autos hit by Schaeffler warning as Geneva show ponders potholes ahead

European auto stocks fell after German bearings maker warned of an "extremely challenging" business environment for the car sector in 2019 and said it would restructure.

As David Pollard reports, the news will add to the mood of uncertainty hanging over auto makers attending this year's Geneva car show.

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Autos hit by Schaeffler warning as Geneva show ponders potholes ahead

Better times for Schaeffler even though the VW emissions scandal had just broken, shares in the German parts maker gained 8 per cent on their debut.

That was 2015 and on Wednesday its shares were sliding by a double digit percentage.

After a slump in earning, it's to restructure, it says.

The outlook for the auto business in its words "extremely demanding and challenging".

And the news pulling shares across the sector down by over a per cent.

(SOUNDBITE) (French) FRENCH CARS MAKERS COMMITTEE COMMUNICATION OFFICER, FRANCOIS ROUDIER, SAYING: "Morale in the industry is low due to three reasons: Brexit, possible tariffs in the US and EU targets on emissions.

All this is paradoxical because it's happening at a time when we've never had so many modern cars, new energies, investment in electrified, connected and autonomous cars." Two items on that list dominate talk at the Geneva car show this week and the third - EU emission targets - stirs differences among sector chiefs.

The EU aims to cut car emissions over 37 percent by 2030.

(SOUNDBITE) (English) VOLKSWAGEN GROUP CEO, HERBERT DIESS, SAYING: "We think that we are preparing well for the transition.

We also commit to the climate change targets, we want to be CO2 neutral by 2050, we think it is possible." Volkswagen has staked $91 billion on mass-producing electric vehicles.

But French carmaker PSA sees a threat to 13 million European car industry jobs resulting from the EU's ambitions.

(SOUNDBITE) (English) PSA GROUP CEO, CARLOS TAVARES, SAYING: "There may be a significant impact, including a social impact .... Not listening to what the automative industry is telling them is not responsible stance " Schaeffler - which makes bearings - dropped ot of Germany's midcap index on Tuesday.

And is to cut 900 jobs as part of its restructuring.

Wednesday's announcement was not the only negative headline for the sector.

Reports say European regulators plan to make detailed allegations - regarding collusion on emissions of diesel engines - against BMW, Daimler and VW, which could, the reports say, result in fines.




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