European car manufacturers, including BMW, Mercedes, and Volkswagen, face sharp stock declines due to weak demand in China, rising competition, and high electric vehicle costs, pushing investor pessimism to record levels.
The European car industry is contending with a range of headwinds, pushing market valuations of top manufacturers such as BMW AG, Mercedes-Benz AG, Porsche, Stellantis, Renault, and Volkswagen at or near record lows.
These companies face significant challenges, from weakening demand in key markets such as China to intensifying competition in the electric vehicle (EV) space, which has eroded investor confidence.
BMW’s profit warning: A tipping point
On Tuesday, BMW AG shares plunged by 11.2%, the company’s largest single-day drop since March 2020. The dramatic selloff followed BMW’s downward revision of its 2024 outlook, with the company cutting its automotive EBIT margin forecast to 6-7%, down from its previous estimate of 8-10%.
This downgrade was largely attributed to muted demand in China, one of BMW’s most crucial markets.
Source: EURONEWS
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