Auto stocks of companies like BMW, VW, Stellantis, among others, are currently bearing the brunt of Trump's tariffs, causing significant distress.
Title: The Spotlight Shifts to European Auto Stocks Amid US Tariffs
Day trade could be a loss for Europe's auto giants and suppliers on the stock exchange. The announced US import tariffs on Thursday cast a gloomy shadow over pre-market trading. Shares for Volkswagen dropped by over 3%, BMW by 2.5%, Mercedes by 2%, and Stellantis threatened to hit record lows with nearly a 5% dip.
A New Front in the Trade Wars
With proposed 25% tariffs looming on all imported cars, the trade dispute between the US and the European Union intensifies. According to the new rules, all imported cars, from compact cars to luxury limousines, SUVs, and light commercial vehicles, would be subject to import duties. Central car components are also included in these tariffs, which is set to take effect on April 3.
The German Automotive Industry Association (VDA) has warned of severe economic repercussions from anticipated US car tariffs. According to VDA President Hildegard Müller, the tariffs pose a significant financial burden for companies and the global supply chains of the automotive industry. These measures would impact consumers even in North America, as the US is the largest sales market for the German automotive sector.
Varied Analyst Predictions
Since the announcement of the import tariffs, not only have the stocks of automakers reacted, but analysts have also revised their stock evaluations. For instance, JPMorgan maintained its "Overweight" rating for BMW amid the initial response. BMW has already anticipated potential burdens from global import tariffs at around one billion euros. Analysts predict that the German manufacturers and Stellantis will disclose specific plans for localizing additional production in the US and hiking prices in the coming days.
However, Barclays presents a contrasting view, raising its price target for BMW from €68.50 to €73.50 but downgrading the shares from "Equal Weight" to "Underweight." Analyst Henning Cosman's forecasts for BMW's operations are up to 15% below the consensus in his updated analysis. His price target is the lowest on the market, and he is among the few skeptics, favoring Mercedes-Benz instead. Cosman explains that while tariffs impact everyone negatively, some companies face less hardship than BMW.
Refers to dpa-AFX
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Disclosure Statement: The publisher of Börsenmedien AG, Mr. Bernd Förtsch, holds positions in the financial instruments mentioned in the publication or related derivatives, which can benefit from the price movement resulting from the publication.
- The 25% tariffs on imported cars, including SUVs, threaten to bring significant financial consequences for the automotive industry, according to the German Automotive Industry Association.
- Reportedly, Volkswagen, BMW, Mercedes, and Stellantis could suffer enormous losses due to the proposed tariffs, with shares for these companies dropping significantly.
- Financial analysts have revised their stock evaluations in light of the announced tariffs, with JPMorgan maintaining its "Overweight" rating for BMW despite the initial response.
- However, Barclays has a contrasting view, raising its price target for BMW but downgrading the shares, indicating potential challenges for the company amidst the tariffs.
- The intensified trade dispute between the US and the European Union, which targets all imported cars and their central components, has cast ashadow over pre-market trading for European auto giants and suppliers.
