VW Seeks State Quarantees For Finance Units

HAMBURG, Germany December 9, 2008: According to Automotive News Europe, Volkswagen has sought state guarantees from Berlin for its financial services and banking units, Europe's biggest carmaker said on Tuesday, becoming the first manufacturer to take such a step in Germany.

The guarantees would cover refinancing of car loans, a VW spokesman said without specifying what amount of guarantees it was seeking from the government's nearly 500 billion euro ($642.7 billion) package to stabilize the financial sector.

Premium carmaker BMW said it was still deciding whether to seek guarantees for its banking unit, while rival Daimler said it had no plans for such a step at this stage but may now reconsider its position.

General Motors' German business Opel last month sought 1 billion euros in guarantees from the German federal and state governments to help it weather tough times for the automotive industry.

That made it the first European carmaker to seek a government bailout amid a collapse in demand for new cars.

Volkswagen shares were little changed on the news, trading up 1.9 percent at 306.14 euros by 12:45 CET. Daimler shares were up 5.1 percent and BMW stock up 3 percent while the DJ Stoxx European car, sector index was also up 3 percent.