European carmakers warn on profits as sector grapples with weak demand, rising costs
European carmakers struggle with weak US, China demand
Potential tariff war adds to sector's concerns
Stellantis shars drop nearly 11%
Aston Martin shares plunge 20% after profit warning
Volkswagen cut 2024 profit outlook for second time in 3 months
By Nick Carey
LONDON, Sept 30 (Reuters) -European carmaker Stellantis STLAM.MI joined on Monday bigger rival Volkswagen VOWG_p.DE and others in warning about the worsening outlook for auto demand and rising costs, wiping billions of euros off the sector's market value.
The automakers are struggling with weak demand in China and the United States and a potential trade war between Beijing and the EU as the bloc prepares to finalise import tariffs on Chinese electric vehicles over alleged subsidies.
British luxury carmaker Aston Martin AML.L also issued a full-year profit warning on Monday, partly blaming falling demand in China, as Mercedes-Benz MBGn.DE and BMW BMWG.DE also did earlier this month.
Aston Martin's shares plunged as much as 20% to their lowest in nearly two years.
Shares in Stellantis were down nearly 11%, hitting their lowest since December 2022 as investors digested the scale of the world No. 4 automaker's problems. Stellantis shares have lost 38% in value this year, making it Europe's worst performing automaker.
The latest warnings follow Volkswagen's announcement late on Friday that it was cutting its 2024 profit outlook for the second time in under three months. Its shares were down a little over 2.8% in mid-morning trading on Monday.
The German car giants have been reliant on China for around a third of their sales and have been hit by a weaker economy there and fiercer competition from domestic Chinese automakers and a vicious EV price war.
MISJUDGING US CASH COW
Falling European demand has not helped either. New car sales in the European Union fell 18.3% in August to their lowest in three years with double-digit losses in major markets Germany, France and Italy and sliding electric vehicle sales.
Much of Stellantis' problems, however, stem from North America.
The expensive Jeeps and pickup trucks that Stellantis sells in the lucrative U.S. market have generated virtually all of its profits since the automaker was formed out of the merger of FCA and PSA in 2021 and have made its profit margins the envy of its mainstream peers.
But high inventories and weak sales as Stellantis has somehow misjudged its cash cow market has forced it to both cut production while also offering deep discounts on the vehicles depreciating on dealer lots across America.
As a consequence Stellantis has slashed its adjusted profit margin for the year to between 5.5% to 7%, down from double digit and warn of negative cash flow of between 5 billion euros ($5.6 billion) and 10 billion euros.
Forward 12-month price-earnings ratios, a measure of a company's market value, for the three biggest European carmakers - VW, Stellantis and Renault RENA.PA, are around 3, much lower than U.S. rivals, GM GM.N and Ford F.N, and Toyota 7203.T - the world's largest carmaker.
Where traditional European automakers' problems intersect is rising competition from Chinese rivals who can develop better, cheaper EVs much faster than Volkswagen, Stellantis or Renault can.
They are also struggling to sell the EVs they are making, while investing large sums to develop new, more affordable models.
Changing over production lines to new models takes revenue-generating capacity offline, exacerbating cash flow issues for legacy automakers whose plants already have capacity utilization problems that they have failed to address.
Falling market share in China and lower car demand in Europe have led Volkswagen to warn of possible plant closures in Germany, putting the company on a collision course with the powerful IG Metall union.
Talks over pay between Volkswagen and the union started last week.
($1 = 0.8948 euros)
Reporting By Nick Carey; Editing by Emelia Sithole-Matarise
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
