Germany luxury carmakers emerge as recession-proof

Andrew McCathie, Deutsche Presse Agentur, Berlin

Germany might be facing slumping economic growth, sliding business confidence, mounting job losses and corporate bankruptcies at a record high, but its luxury carmakers appear to be almost recession-proof.

Indeed, despite the steady stream of bleak economic news out of Europe's biggest economy, BMW, Mercedes Benz and Porsche have been rolling out a string of robust financial results accompanied by upbeat forecasts about their performance for the whole year.

The global luxury consumer goods business might have taken a big knock as a result of the terrorist raids on New York and Washington but the top-end German makers appeared to have emerged from the crisis relatively unscathed and optimistic about their future prospects.

The mood among Germany's luxury car groups is also in marked contrast to the grim financial offerings that other big German companies have been offering up to their shareholders and the stock markets in the wake of the Sept.11.

While a range of German companies stretching from banking through to chemicals, electronics and high-tech companies have been posting a a series of downcast results, the big three upmarket carmakers have been reporting surging sales and rising profits, helped along by a weak euro.

Data released this week showed the German economy shrinking in the third quarter, and business confidence slumping to an eight- year low.

At the same time, however, German sports carmaker Porsche has just reported a 37 percent surge in the group's pre-tax profit to 592.4 million euros (US$521 million) in the year ending July 31 with company chief executive Wendelin Wiedeking saying he was optimistic about business in the current year.

"There is strong demand all over the world for our two model lines, the 911 and the Boxster," he said.

The Porsche results followed new figures released by Munich- based BMW which showed sales of its BMW and Mini brands rising 18.5 per cent to 78,443 units in October from a year earlier.

For the full year, BMW is aiming to sell more than 900,000 vehicles, compared to 822,000 in 2000.

A similar picture has emerged at DaimlerChrysler. Company boss Juergen Schrempp predicts that sales of Mercedes-Benz cars for 2001 will top last year's record of 1.05 million.