By Gilles Castonguay
FRANKFURT (Reuters) - Many European car and car parts makers have shrugged off the dollar's fall against the euro because they have hedged against the risk or avoided it altogether by operating plants in the United States.
Some of them like Ferrari and Lamborghini sell their vehicles at such high prices that the impact on their results is minimal. They also benefit from the hedging done by their parent companies: Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) and Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz), respectively.
Others like France's Renault (RENA.PA: Quote, Profile, Research, Stock Buzz) and PSA Peugeot (PEUP.PA: Quote, Profile, Research, Stock Buzz) do not sell their cars and vans in the United States so the dollar's behavior is of no consequence to them.
Their vulnerability would lie in eastern Europe and Latin America where they do business in many different currencies.
The few that export to that market are seen as the most exposed to the dollar's weakness, such as BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), the biggest premium car maker in the world.
"It is a big issue for BMW," Maria Bissinger, a Standard & Poor's corporate ratings director, told the Reuters Autos Summit in Frankfurt. "They face headwinds."
Fears about the state of the U.S. economy has sent the dollar to record lows against the euro at about $1.4850 per euro.
The Federal Reserve has forecast growth in the world's biggest economy slowing next year to between 1.8 and 2.5 percent, a sharply lower estimate than those made earlier this year. Continued...
© Thomson Reuters 2008. All rights reserved.
| Global Environment | Oct 06 - 8, 2008 | Energy |
| Autos II | Sep 30 - Oct 01, 2008 | Hotels/Casinos |
| Restructuring | Sep 22 - 26, 2008 | Financial Services/Exchanges |
| Autos | Sep 15 - 17, 2008 | Autos |
| Russia Investment | Sep 08 - 9, 2008 | Country Summits |
