Daimler and Volkswagen reinforced the gloomy outlook for Europes vehicle industry on Thursday, revealing weak sales of premium cars and downbeat demand outlooks that overshadowed some robust truck sales data, Reuters reported on Thursday.The warnings fit with the signals coming from other car and truck makers, which had benefited since the industrys 2008-2009 crisis from robust demand in emerging markets including Brazil and China, but now warned the outlook for Europe, beset by sovereign debt woes, was increasingly gloomy.Daimler said its weaker-than-expected quarterly operating profit suffered as premium car sales were hit by the economic downturn., while better news in the truck sector for Daimler and its peers, showed predicted slowing demand had not yet arrived.Chief Executive of Europes largest car maker Volkswagen, Mr. Martin Winterkorn, also warned Europes debt crisis would weigh on demand for cars in many Western European markets, although the company expected continued growth in Eastern Europe, India, China and North and South America.Overall demand for cars would be flat in 2011, he said.VW predicted a big rise in revenues and operating profit this year but warned volatile interest rates and currency fluctuations as well as commodity prices would dent margins.It posted a quarterly operating profit of 9bn thanks to double digit sales growth rates and a boost from derivatives used in the merger with Porsche.Despite the gloom, data on Thursday from industry group ACEA showed the signs of cooling demand reported by truck makers had not yet filtered through to sales.Truck sales in the European Union rose by 4.5 per cent in September, ACEA said.But against this background truck manufacturers are bracing themselves for lower demand ahead, in an industry closely linked to international trade and the health of the wider economy.World number two truck maker Volvo on Tuesday said it was preparing to cut output in anticipation of lower vehicle demand in Europe next year, and warned of slowing growth in emerging regions.Competitor Scania had earlier said it would make further production cuts if economic uncertainty led to lower orders as it posted a profit drop as expected.Daimlers sales of Mercedes-Benz Cars, which also includes the Smart brand, fell by two per cent in Western Europe in the third quarter, with stagnating sales in Germany, Europes biggest car market.Car sales growth has been shrinking in Europe, with Germany the only major market in the region to expand in September, while the boom in China that bolstered German carmakers in recent quarters has eased to a milder pace for now."At the beginning of the fourth quarter of 2011, the outlook for the world economy is distinctly less favourable than just a few months ago," Daimler said in its quarterly financial report.However, it reaffirmed its full-year outlook."Perhaps the stock will struggle today -- but we still see Daimler as an out of favor, cheap stock with durable earnings power," wrote Bernstein analyst Max Warburton in a research note. "2012 looks like its going to be a tough year, but Daimler may well fare better than many fear," he added.Daimler shares rose by 1.5 per cent to 38.44 euros by 0843 GMT (4:43 a.m. EDT), underperforming a 3.2 per cent rise in the STOXX 600 European autos index .SXAP. Volkswagen rose by more than six per cent.Frances PSA Peugeot Citroen, beset by gloom in European showrooms, on Wednesday warned its core car making business would barely make money this year and announced 6,000 job losses to cut costs.Its competitor Renault also reported on Thursday.Also on Thursday, South Koreas Hyundai Motor reported a 21 per cent rise in third-quarter net profit but warned of rising competition and economic uncertainty.And auto makers felt a worsening impact from floods in Thailand. Toyota Motor Corporation said it would cut production in North America for one day because of the interruption of parts supplies from the country.
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