Plummeting auto stocks prompt a potential respite for BMW, Volkswagen, Mercedes-Benz, and other automobile firms?
In an unexpected turn of events, the stocks of BMW, Volkswagen, Mercedes-Benz, and Porsche experienced a heavy sell-off on Wednesday, losing more than five percent. The sell-off was due to two factors: the results of the U.S. election night and negative numbers from BMW.
The U.S. election results have created uncertainty for these European automakers as the new administration has announced plans for increased tariffs on European car imports. This move has increased costs and lowered profit forecasts for these companies.
BMW's financial report shows a significant decline in revenue due to weak business in China and problems with braking systems. The company's profit fell by 84 percent as a result of these issues. Despite hopes for some tariff relief through policy changes, BMW remains under pressure.
Volkswagen disclosed a $1.5 billion tariff-related cost in the first half of 2025 and has proposed negotiating tariff relief by investing more production in the U.S. Mercedes-Benz has lowered its profit forecasts and is moving some production to U.S. plants to reduce tariffs. Porsche, which imports all U.S. vehicles from Europe without domestic production, is the most exposed to U.S. tariffs and has cut its profit outlooks. The company is considering U.S.-based final assembly to reduce the tariff impact.
The 15% tariff on EU imports continues to pressure these companies’ margins. Despite some production shifts and tariff relief attempts, overall headwinds from trade conflict, competitive EV landscape especially in China, and tariff-related cost pressures constrain the outlook.
Investment analysts are therefore largely cautious, recommending careful monitoring of how these companies manage tariff pressures, potential production relocations, and competitive dynamics in electric vehicles. Short-term stock performance may remain volatile until tariff uncertainties and profit forecasts stabilize.
However, despite the sell-off, analysts and BÖRSE ONLINE are recommending the purchase of these stocks due to their attractive valuations and turnaround opportunities. The CEO and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has positions in Volkswagen Vz., Mercedes-Benz, and Porsche AG. The editorial director, Mr. Frank Pöpsel, has positions in Volkswagen Vz. among the stocks being discussed.
It is not specified whether it is advisable to stay away from the stocks of BMW, Volkswagen, Mercedes-Benz, and Porsche after the sell-off. U.S. automaker Tesla's stocks rose by double digits on Wednesday, potentially benefiting from protectionist measures.
In summary, the German automakers are facing significant challenges due to the U.S. tariffs on European car imports. The sell-off was due to the results of the U.S. election night and negative numbers from BMW. Despite some production shifts and tariff relief attempts, overall headwinds from trade conflict, competitive EV landscape especially in China, and tariff-related cost pressures constrain the outlook. Investors are advised to monitor these companies closely and consider the risks before making investment decisions.
- The U.S. election results have heightened concerns in the industry, as tariffs on European car imports may increase costs and lower profit forecasts for automotive companies, such as BMW, Volkswagen, Mercedes-Benz, and Porsche.
- The financial sector, including stock-market investors, are keeping a watchful eye on these European automakers, as they navigate through the challenges presented by tariffs and production shifts in the face of trade conflicts and competitive EV landscapes.
- The sell-off of stocks for companies like BMW is not only related to negative numbers, but it also reflects the overall uncertainty caused by the new U.S. administration's policies and the resulting increase in transportation costs.
- Despite the unstable market and heavy sell-off, analysts and certain investment groups, such as BÖRSE ONLINE, are advocating the purchase of stocks from these automotive companies due to their attractive valuations and potential turnaround opportunities.
