The European car industry is falling like dominoes. European giants report falling sales and shares – Echo24.cz

The European car industry is in decline. Major European carmakers are in trouble and cutting expected earnings. Lower profits and margins for 2024 have been announced in recent days by German giants Mercedes-Benz, Volkswagen and BMW. However, the problems are not only in Germany. Lower profits are also reported by Stellantis, which includes, for example, Citroen, Peugeot, Fiat and Chrysler. However, not only utility vehicle brands have problems, but also the luxury Aston Martin. All car manufacturers have similar problems. Lack of interest in electric cars, sales problems in China and fear of new tariffs.

A bad month for car makers started at the beginning of the Bavarian month BMW. They announced a drop in margins for this year to 6-7%. Initially, the German giant expected margins of 8-10%. BMW also recently announced that up to 1.5 million vehicles have problems with the braking system and that some of them will need to visit an authorized service center. For some cars, the manufacturer makes the change remotely. However, these problems lead to delays in deliveries, and the automaker has already announced that it will deliver fewer cars this year than last year, compared to initial assumptions. She expected the opposite. Meanwhile, this is the second time in two months that he has revised his forecasts.

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BMW shares reacted to the news by falling from around 85 euros per share to this year’s low of 68 euros per share. Later, the share price went up a bit.

Another German giant is in similar trouble Volkswagen. Late last week, it also announced a drop in expected margins to 5.6% from the 6.5-7% initially announced. It announced a drop in expected returns in 2024 for the second time in three months. In addition, the company is fighting unions over the possibility of closing a plant in Germany for the first time in its history.

He answered the same Mercedes-Benzwhich announced a decrease in margin from an expected 11% to 7.5%.

The British Aston Martin is also struggling with problems. The company announced on Friday that instead of growth in units per cent, it expects sales to fall in units per cent. In response to the announcement, the company’s shares fell more than 20% on the British stock market on Monday, and settled around 18% in the afternoon.

Problems are also reported with one of the largest car companies, Stellantis, which was created in 2021 by combining several French and American brands. It initially expected margins in the double digits, but has now reported margins between 5.5-7%. The company also announced a reduction in production and they want to produce up to 200,000 cars less than before. Initially, he wanted to limit production to 100,000 cars. Bloomberg also that the board of directors is already looking for a replacement for the head of the group, Carlos Tavarez. It also faces criticism from the United States, where the company could lay off thousands of workers.

According to Stellantis, sales in the second half of the year will be lower than expected in most sectors. “Competitive dynamics have increased both due to increased supply in the industry and increased Chinese competition,” the company said of the results.

All of the aforementioned car companies cite the strong competition in the world’s largest car market in China as a problem. There, it faces strong competition from domestic car companies. Discussions about possible EU tariffs on Chinese cars are also a problem for European car makers. according to Reuters if the EU decides to permanently introduce tariffs on Chinese car manufacturers on October 4. Taxes could be as high as 45%. If such tariffs are adopted, a response from China is expected and another threat to the sales of European manufacturers.

Some car companies are also talking about losses and problems in selling electric cars. Interest in them fell mainly in Germany after the government reduced generous subsidies for electric cars as part of financial cuts. Some car companies also talk about problems and delays in the supply chain.