Daimler denies interest in acquiring Volvo

wDaimler has no interest in acquiring Ford Motor unit Volvo, a Daimler spokesman said on Saturday following a magazine report that the German carmaker had examined its Swedish rival.

"We were never interested in Volvo," the spokesman said.

German weekly magazine Der Spiegel reported on Saturday that Daimler had carefully looked at a possible deal in recent weeks but had rejected the idea.
Der Spiegel cited no sources for its report, which was released ahead of publication on Monday.

Ford is considering strategic options for the Volvo brand and expects a lot of interest, Ford CEO Alan Mulally said last month.

Volvo has been put up for sale by Ford, which along with its rivals General Motors Corp and Chrysler is trying to survive a deep downturn in U.S. vehicle demand.

A Chinese newspaper last month named Ford's China partner Changan Automobile Group as a potential buyer for Volvo. Ford declined to comment on the report.

Ford and Mazda Motor Corp operate a car venture with Changan's listed arm, Chongqing Changan Automobile, which makes mid-sized Focus sedans and Volvo S40s, among other brands.

Sweden has said it will provide up to 25 billion crowns ($3.20 billion) in credit guarantees and emergency loans to its ailing auto industry but has no plans to buy stakes in Volvo or GM unit Saab.

Automotive shares down as raw-material prices surge

Shares were lower in mid-afternoon trade as surging raw materials prices put pressure on automotive and other transport-related stocks.

Automotive stocks were particularly hit by news that oil prices reached a record high last Friday and a prerelease of auto motor und sport magazine which quoted ArcelorMittal's vice president for Automotives Jean-Luc Maurange as saying the company plans to charge higher prices to carmakers due to surging raw materials costs.

Daimler was off 0.99, or 2.48 percent, at 38.89 while BMW was down 0.15, or 0.50 percent, at 30.04.

Another factor contributing to weaker car stocks was Lehman Brothers' removal of Peugeot and Daimler from its Recommended Portfolio List, according to traders.

The only car stock on positive terrain so far was Volkswagen, up 0.86, or 0.48 percent, at 179.92. VW's management board is set to decide July 8 on the site of its new 500 million euro production site in the United States, auto motor und sport reported, citing management sources.

VW feels pinch from raw materials

Volkswagen is stepping up efforts to cut costs in the face of rising raw materials prices but still expects to feel the pinch, Europe's biggest carmaker said today.

"From today's perspective the impact resulting from (cost-cutting) will not compensate for current market prices," a spokesman said.

VW's comments came amid a sell-off in European car sector stocks given renewed concerns over raw material prices, ongoing worries over the outlook for the U.S. economy, and the euro's strength against the dollar.

Volkswagen and other carmakers typically lock in steel prices via long-term contracts but face price increases as these contracts have to be renewed.

BMW, the world's biggest premium carmaker, reiterated that it expected the burden from higher materials costs to rise 12 percent this year versus 288 million euros ($448 million) in 2007 and 178 million the year before.

Shares in Daimler retreated on market talk -- which the company denied -- that it was lowering its 2008 guidance for higher operating profit from ongoing operations.

Daimler stock was down 4.9 percent at 12:47 CET, while Volkswagen shed 2.1 percent and BMW fell 3.7 percent.