BERLIN - German carmaker Daimler AG expects to use short working hours in response to weak demand for passenger cars in the first quarter of next year, Chief Executive Dieter Zetsche told Reuters on Thursday.

We will position ourselves on the car side according to demand. That can mean that we use short hours next year as well, he said on the sidelines of an industry event.

It was thoroughly probable that the maker of Mercedes-Benz cars will have short hours in the first quarter, he added. But it is also probable that the car business will have quarters without short hours.

Many German companies curtail working hours for staff when demand retreats. The government helps subsidise the accompanying drop in wages as a way to limit outright layoffs.

Around 27,000 Daimler staff have worked short hours of late and the company has forecast another tough year for car markets in 2010.

Luxury sports car maker Porsche has said it will extend short hours at its main plant until March 2010, while Daimler's arch rival BMW has said it did not plan to extend short hours beyond January.

Daimler shares were down 1.5 pct, lagging the European auto sector as a whole .SXAP, down 0.6 percent. (Reporting by Kerstin Schraff; Writing by Michael Shields; Editing by David Holmes)

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