Crisis brake on Daimler, BMW

The global financial crisis has finally hit German luxury carmakers Daimler and BMW, which have announced temporary closures of factories.

Daimler is to idle factories for five weeks because world sales of its Mercedes cars have slumped while rival BMW announced a four-day standstill at one of its car plants in Leipzig.

"The financial crisis is turning into an economic crisis," said Daimler chairman Dieter Zetsche. "It has provoked, in recent weeks, a dramatic slump in our major markets. The situation is very challenging. We are living in extraordinary times."

Daimler recently said it was severely paring back its 2008 sales targets and saving where it could. Its third-quarter earnings of €648 million (£524 million) were sharply down from the €1.9 billion of one year earlier.

BMW said that a four-day halt at its Leipzig factory would reduce its output by 2800 cars.