Today, 28 automotive concept stocks in the A-share market surged collectively, with nine companies including Seres, Great Wall, and Jianghuai hitting the daily limit. However, the euphoric sentiment in the A-share market did not boost European automotive stocks. European and American automakers collectively "went out of service," with European automotive stocks falling nearly 4% during Monday's trading. The market's concern was reignited, and the plunge wiped out nearly $10 billion in market value from the STOXX Auto & Parts Index.
On Monday, Stellantis' stock price fell by 14%, Aston Martin's stock price dropped by more than 23%, Renault fell by nearly 6%, and Volkswagen fell by 2.7%. Stellantis and Aston Martin released profit forecasts today. Previously, Volkswagen, Mercedes-Benz, BMW, and others have all indicated a downward revision in expectations.
Citi expects European and American automakers to remain weak in the coming weeks and stated that Stellantis' recovery is unlikely to last until 2025. At that time, this European and American carmaker will reset its inventory, leading to more favorable outcomes.
Profit warnings triggered a plunge in automotive stocks, and European and American automakers collectively "collapsed."
On Monday, Stellantis issued a profit warning. This corporate group, which integrates brands such as Peugeot, Citroën, Opel, Fiat, and Chrysler, significantly lowered its profit margin forecast for this year, citing "plans to reduce production in a slowing and more competitive automotive market and increase promotional spending."
In a statement today, the company said that its adjusted operating profit margin for this year will narrow to between 5.5% and 7%, a double-digit decrease from previous forecasts.
Stellantis now also expects industrial free cash flow to be between negative €5 billion ($5.6 billion) and negative €10 billion, lower than the previously forecasted positive cash flow. The company also expects to reduce production by 200,000 vehicles in the second half of this year to achieve sales targets, doubling the initial plan.
Market concerns were ignited, and Stellantis' stock price fell by more than 14%, setting a new intraday low since December 2022.Aston Martin of the United Kingdom has also revised its forecast for this year, with the adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the full year now expected to be in the "high teens percentage," lower than the previously estimated "low twenties percentage."
Aston Martin's Chief Executive Officer, Adrian Hallmark, stated in a declaration: "It is clear that we need to take decisive action to adjust the production for 2024."
Aston Martin's share price fell by 23% today, marking the largest drop since May 1st, with a total decline of 37% since the beginning of the year.
German carmakers issue profit warnings one after another, as the European and American automotive markets face difficulties.
Bad news from the European automotive industry continues to pour in. Recently, Germany's three major car manufacturers: Mercedes-Benz, Volkswagen, and BMW, have also successively issued profit warnings this month.
On the 20th, Mercedes-Benz revised its 2024 performance guidance, expecting this year's EBIT (Earnings Before Interest and Taxes) to be "significantly lower" than the previous year, causing a flash crash of 8% in its share price during trading; BMW Group also lowered its full-year profit expectation to 6% on the 10th, down from the previous expectation of 8%-10%.
Due to the decline in demand for cars, last Friday, Volkswagen lowered its company's future revenue, profit, and cash flow forecasts, planning to deliver fewer cars this year than in 2023, marking the fourth annual sales decline in five years. The company's share price plummeted by nearly 4%.
"With local customers beginning to favor domestic brands, Volkswagen's scale advantage in China may have already reached its peak," said Bloomberg automotive analyst Matthias Schmidt.
Citigroup expects European and American carmakers to remain weak in the coming weeks and states that Stellantis's recovery is unlikely to last until 2025, when this European and American car manufacturer will reset its inventory, leading to more favorable outcomes.Citi analyst Harald Hendrikse stated: "We believe that the current weakness will persist until October, which may be supported by the acceleration of global interest rate cuts."