European Carmakers Reel as Demand Wanes and Costs Rise

European carmaker Stellantis and others warn of a dire outlook due to rising costs and weak auto demand, especially in China and the United States. Stellantis shares plunged, with the company's U.S. market missteps further exacerbating the issue. A potential EU-China trade war and rising competition from Chinese EV makers add to their woes.

European carmaker Stellantis on Monday joined Volkswagen and other auto giants in sounding alarms about the deteriorating market for vehicles and escalating costs. These concerns led to significant market devaluations within the sector as companies grapple with weak demand in key regions like China and the United States alongside potential trade conflicts over Chinese EV imports.

Aston Martin issued a full-year profit warning, pointing to decreased demand in China, a sentiment echoed by Mercedes-Benz and BMW through recent announcements. Aston Martin's shares plummeted to a near two-year low.

Stellantis, criticized for slow responses to U.S. market challenges, saw its shares drop nearly 15%, marking its lowest value since December 2022. The company has lost 38% of its market value this year, positioning it as Europe's poorest performing automaker. This follows Volkswagen's recent downward revision of its 2024 profit outlook for the second time in under three months amidst a significant reliance on the struggling Chinese market.