Car stocks plummet due to US tariffs
A looming trade war between the USA and key trading partners is causing auto and truck stocks to plunge. The shares of BMW, Mercedes-Benz, and Volkswagen temporarily fell by five to 7 percent on Monday morning. The shares of truck manufacturers Daimler Truck and Traton also dropped significantly, and the stock prices of suppliers such as Continental and Knorr-Bremse fell as well.
US President Donald Trump imposed tariffs of 25 percent on imports from neighboring countries Mexico and Canada over the weekend, with only energy imports from Canada facing a 10 percent tariff. An additional 10 percent will be levied on all imports from China. And the EU could soon follow.
The problem: Major German automakers and many suppliers use Mexico as a production location - serving the US market from there. VW, Audi, and BMW have their own factories in the country, and Mercedes-Benz produces in a joint venture with Nissan.
Divided Opinions on the Impact for Car Manufacturers
Analyst Philippe Houchois from the investment firm Jefferies sees the impact less on German manufacturers and more on the large US car companies. The US import tariffs are likely to increase vehicle prices in the USA or production costs by an average of 6 percent, should there not be a quick de-escalation, he said.
Different Impacts Feared
The Jefferies expert sees comparatively lower risks—albeit based on an earlier analysis—due to the more global positioning, for instance, at Volkswagen. He points out that BMW and Mercedes-Benz are net exporters in terms of value from the USA.
Jose Asumendi, an analyst at JPMorgan, however, sees larger impacts for Daimler Truck, Volkswagen, Traton, and Stellantis.
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