Auto rivals, suppliers hit by rejection

LONDON/PARIS: Renault, Daimler and Faurecia plunged in European trading after the Senate���s rejection of a $14-billion bailout for the US carmakers raised fears they may go bust, dragging down suppliers and rival auto manufacturers alike.

Renault, the French carmaker whose Japanese affiliate, Nissan Motor, is heavily dependent on the US sales, dropped as much as 9.5% in Paris. Stuttgart, Germany-based Daimler, the world���s second-biggest maker of luxury vehicles, dropped 8.7% and Faurecia of France, with has built 10 new North American plants in three years, lost 12%.

General Motors and Chrysler face possible of bankruptcy within weeks after senators last night rejected a government rescue. GM plummeted 51% in German trading and auto stocks slumped worldwide amid concern that a collapse of the Detroit company may shock the US economy, sending auto sales there lower and threatening parts-makers with collapse.

���People are worried about contagion from the potential failure of the US carmakers,��� said Michael Tyndall, an auto industry specialist at Nomura Securities in London.

���It might seem like a US problem, but the suppliers are global.��� In Japan, Toyota Motor Corp, vying with GM to be the world���s biggest automaker, fell 10%, the most in a month, to 2,760 yen. Honda Motor dropped 12% to 1,921 yen and Nissan Motor Co. lost 11% to 308 yen.

���A collapse in Detroit would seriously damage the economy, which is bad for Japan���s automakers,��� said Shigeru Matsumura, a market analyst at SMBC Friend Securities in Tokyo.