http://news.bbc.co.uk/2/hi/business/8173807.stm Woes continue for world carmakers Last updated at 10:54 GMT, Wednesday, 29 July 2009 11:54 UK Carmakers PSA Peugeot Citroen, Daimler and Nissan have all reported big losses in the face of continuing declines in global vehicles sales. Peugeot, France's biggest car firm, made a net loss of 962m euros ($1.4bn; £830m) between January and June. A year ago it reported a profit of 733m euros. Peugeot sacked its former chief executive in March Daimler, the owner of Mercedes-Benz, made a net loss of 1bn euros in the April to June quarter. Meanwhile, Nissan's quarterly loss totalled 16.5bn yen ($170m; £104m). Honda also reported results on Wednesday. Although it avoided a quarterly loss, its profits fell 96%. Limited scrappage impact Peugeot said its sales for the first half of the year were down 22%, and that its losses would continue for the remainder of 2009. Its chief executive, Philippe Varin, said sales were "only partially" helped by the introduction of government scrappage schemes, which offer cash incentives for owners of older vehicles to trade them in for new cars. The company does not expect European car sales to recover until the end of 2010. Peugeot sacked former chief executive Christian Streiff in March. 'Severe' conditions Daimler's 1bn euros quarterly net loss compares with a profit of 1.3bn euros made in the same period a year earlier. The firm, which makes buses and lorries in addition to cars, saw group-wide sales fall 25% to 19.6bn euros. A number of European governments have introduced scrappage schemes Sales of its Mercedes-Benz cars were down 19% from a year before. Daimler is also continuing to be hit by the expense of giving up its former 19.9% stake in Chrysler, which saw it write off Chrysler's outstanding loans, and agree to pay $200m (£122m) a year into the firm's pension fund. It said its continuing exposure to Chrysler cost it 387m euros during the quarter. Nissan's loss for the April to June period compares with a profit of 52.8bn yen a year earlier. Its revenues were down 36%. Honda's quarterly profit, also for the April to June quarter, was 7.6bn yen, down from 173.4bn yen last year. Its revenues were 30% lower. Koichi Kondo, Honda's executive vice president, said conditions in the global car market remained "extremely severe". However, the company does now predict a slow recovery in the marketplace, and has upgraded its annual profits forecast as a result. Honda now expects to make a net profit of 55bn yen for its financial year to 31 March 2010. Three months ago it had forecast an annual profit of 40bn yen.
i think there are two real problems one is the lack of demand and two is that manufacturers are not producing what people want (mainly the former).