17:21 - 1.10.2024
October 1, Fineko/abc.az. European auto stocks tumbled almost 4% on Monday after a warning from Stellantis, Volkswagen and Aston rekindled concerns over the sector's earnings outlook in a year marred by slowing demand and aggressive Chinese competition.
ABC.AZ reports, referring to Reuters, that the rout wiped off nearly $10 billion from the market value of the STOXX Auto & Parts index, opens new tab with Stellantis, listed in Paris and Milan, falling 14% after slashing forecasts and saying it would burn more cash than initially expected.
Analysts forecast a near 14% earnings drop in 2024, marking a reversal from the years following the pandemic, when supply chain disruptions allowed carmakers to raise prices.
This will be a significant change in the trend observed after the pandemic, when disruptions in supply chains allowed automakers to raise prices (and, consequently, the profitability of companies).
According to estimates by LSEG Datastream, cited by Reuters, shares of automotive companies are traded today at an almost record discount of 60% to the market based on the price/profit indicator.
