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13/06/24
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Auto Stocks in Europe Drop on Uncertainty Over Chinese Tariff Response
On Thursday, shares of some of Europe’s largest carmakers dropped further on uncertainty over how China may react to the EU’s new tariffs on electric vehicles imported from China to fight what Brussels believes to be excessive subsidies from Beijing.
China’s countermeasures may target autos directly, which increases the risk for Germany’s luxury carmakers, and may even take aim at other sectors such as France’s cognac industry.
Some investors expect Beijing’s response to be balanced as carmakers in China will still be able to export to Europe, albeit at reduced margins.
A founder at Niche Asset Management in London, Massimo Baggiani, said he believed the tariffs were not very severe for the Chinese and an absolute requirement for Europe. He added that if this didn’t happen, it would have been a substantial problem for European employment, the development of electric mobility, and the economy.
Europe’s auto index dropped by 2.3% to the lowest level in over 4 months, while the wider STOXX 600 region-wide index was 0.8% lower.
Declines were led by China-exposed Volvo Car which tumbled 6.2%, followed by German carmakers Volkswagen, Porsche AG, BMW, and Mercedes, down between 1.7% and 3.7%.
On Wednesday, Brussels said it would from July impose additional duties on electric vehicles imported from China.
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