Page last updated at 12:27 GMT, Friday, 7 November 2008

German production sees sharp fall

BMW car showroom visitors
Car sales in Germany are slowing

Germany factory output fell sharply in September as the global slowdown hit demand for products from the world's top exporter.

September industrial output fell 3.6% compared with August, according to official figures.

The fall has raised fears that Germany, which is Europe's biggest economy, may already be in recession.

The economics ministry said as a result of continued weak demand "perspectives for production are gloomy".

The fall in September's production figures was steeper than many economists had forecast. Most observers had expected a 2% monthly fall.

On a less volatile two-month basis, output actually rose 0.5% in August and September, compared with June and July. However, it fell by 1.3% in the third quarter compared with the April-June quarter, the ministry said.

"The tendency of the last few months" said the ministry in a statement, "is that production is clearly pointing downwards".

The German economy contracted in the second quarter and figures due on 13 November are expected to confirm that it shrank in the third quarter too - which would mean Germany is officially in recession.

'Challenging conditions'

Further evidence of slowing sales and production came from two of the country's biggest carmakers on Friday.

BMW said it no longer expected to report record sales for 2008 because of consumers' growing reluctance to spend on new cars amid fears of a recession.

"Faced with extremely challenging conditions in the automotive markets, we no longer expect to exceed last year's record sales for the full year," said Ian Robertson, who oversees BMW's sales and marketing.

BMW's October sales fell by more than 8%, with just 113,005 vehicles sold compared with 123,304 in October 2007.

Meanwhile its competitor, Daimler, said that its sales in October fell 18% compared with the year before.

The Stuttgart-based maker of Mercedes-Benz, Smart and the luxury Maybach brand, sold 93,800 cars worldwide last month, compared with 114,600 a year ago.

The decline was particularly evident in the US market, where sales slumped 24.5%.

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SEE ALSO
Slowdown hits Germany's exports
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Germany 'on brink of recession'
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