Car Stocks Fall After Guidance Cuts Signal Weaker Industry Outlook

By Adria Calatayud

Global car stocks dropped after Jeep maker Stellantis and British luxury carmaker Aston Martin joined Volkswagen and other peers in lowering their annual earnings expectations, signaling a deterioration in the outlook for the industry.

Stellantis--which houses brands such as Chrysler, Citroen, Dodge, Fiat, and Peugeot--and Aston Martin both cut their profitability guidance for the year, after Volkswagen slashed its outlook on Friday. Mercedes-Benz and BMW downgraded their targets earlier this month.

The flurry of profit warnings sent car stocks tumbling globally. Shares in Stellantis plunged 14% in European morning trade, while Aston Martin's stock shed around a quarter of its value. Volkswagen's most widely traded shares dropped 2.9%.

Other European car stocks fell as well, with Renault trading down 6.1% and Volvo Car down 5.5%. The Stoxx Europe 600 Automobiles & Parts sector index fell 3.8%.

In Asia, shares of automakers took a hit as well. Toyota Motor closed down 7.6%, while Honda Motor fell 7% and Nissan Motor 6%. South Korean peers Kia and Hyundai Motor fell more than 4%.

Volkswagen called out weakness in its mass-market segments and financial services when it revised its guidance downward, as opposed to BMW and Mercedes's warnings that blamed the high-end segment and China, analysts at Barclays wrote in a note to clients.

Stellantis said it is accelerating plans to trim inventory levels in the U.S. as the global industry continues to deteriorate and competition intensifies. Meanwhile, Aston Martin blamed its revision on supply delays and weakness in China.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

September 30, 2024 04:24 ET (08:24 GMT)

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