Reuters reports that shares of European automakers fell by almost 4% on September 30 after Stellantis, Volkswagen, and Aston Martin warned about the sector’s weak profit prospects for the year.
The market value of the STOXX Auto & Parts index fell by almost $10 billion. Stellantis shares, listed in Paris and Milan, fell 14% after the company lowered its forecasts and said it would spend more cash than expected.
Stellantis, Europe’s No. 5 automaker by market value and owner of the Chrysler, Jeep, Fiat, Citroen, and Peugeot brands, cited deteriorating industry trends, rising costs of modernizing its US business, and Chinese competition in the electric vehicle industry.
Citigroup expects the sector’s weakness to continue in the coming weeks. According to the bank’s analysts, Stellantis’s recovery is unlikely until 2025, when the European-American automaker will refresh its inventory, leading to more favorable comparisons.
The industry’s profits are projected to fall by almost 14% in 2024, a reversal from the years after the pandemic when supply chain disruptions allowed automakers to raise prices.
German carmaker Volkswagen, which has been at odds with labor unions over unprecedented plans to close plants in its territory, cut its annual forecast for the second time in less than three months.
Aston Martin warned of a decline in annual core profit and cut its production forecast due to supply chain disruptions. The company’s shares fell by more than 22% in London trading.