Automakers fear bleak 2009 as demand plunges

MILAN/FRANKFURT (Reuters) - Daimler , Hyundai Motor <005380.KS> and Fiat added to the gloom facing the autos sector with bleak forecasts for next year, as the global financial crisis took its toll.

The news from Europe and Asia came as Daimler's U.S. affiliate, Chrysler, cut a shift at a Toledo plant and brought forward the closure of its Newark (Delaware) operation.

Germany's Daimler, maker of Mercedes-Benz luxury cars and heavy trucks, lowered its expectations for the year, adding that all of its forecasts had a high degree of uncertainty to them.

Italy's Fiat said global demand for its products could drop 10-20 percent and its profit tumble by as much as 65 percent in a "worst-case" scenario.

At Hyundai, South Korea's top car maker, a senior official expected demand in emerging markets to fall next year. [nN22405189]

Global car makers face a sharp drop in sales as drivers put off major purchases on fears of a recession and the cost -- if not the lack -- of getting loans.

The market had expected their outlooks to be bad but they did not know how bad until Thursday when the first batch of results from the sector came out.

At 1029 GMT, the DJ Stoxx European auto index fell 6.31 percent, while the wider market was little changed. Fiat shares were briefly suspended twice for excessive losses.

Daimler cut its revenue and profit forecast for 2008 after reporting a plunge in its third-quarter results by two-thirds.

"We are in a situation that is very challenging," Daimler Chief Executive Dieter Zetsche said in a statement.

But the company said its situation was strong: "Despite the ongoing financial market crisis, the group has a solid financial position, which should also remain stable throughout the rest of the year."

Fiat said its trading profit could plunge by as much as 65 percent next year, and although the maker of cars, trucks and tractors called its forecast a "worst case" scenario, analysts saw it as definitive. "It will be seen as a profit warning," one analyst told Reuters.

Fiat did enjoy a better-than-expected third-quarter and aimed for the low end of its target range for the year. However investors were concerned to see the rate at which its debt was increasing. [nLN585636]

Hyundai, the world's No. 5 auto maker along with affiliate Kia Motors Corp <000270.KS>, posted a 38 percent fall in third-quarter net profit. Although it beat expectations, its outlook was gloomy.

"The market situation in emerging countries is much worse than expected," Park Dong-wook, a director at Hyundai's treasury division, told reporters.

(Additional reporting by Cheon Jong-woo in Seoul; Writing by Gilles Castonguay and Erica Billingham; Editing by Andrew Callus)