German carmakers party under China cloud

Flush with cash and confidence after years of rising sales, German carmakers are used to reaping industry-leading returns. But with Chinese demand abruptly slowing, the profit engine has begun to sputter, overshadowing the glitz of the Frankfurt auto show which opens on Tuesday.

For the home team of BMW, Daimler and Volkswagen, as well as European rivals such as PSA Peugeot Citroen, China's downturn also threatens to weigh on already weak emerging markets and put a damper on recovering demand at home.

"Auto sector earnings have peaked," Bernstein analyst Max Warburton warned investors on Friday, noting the broad array of new German luxury models about to be unveiled in Frankfurt - and aimed squarely at the world's biggest auto market. "Go see these products while you can," he said. "Few would even exist if it weren't for China."