(updated: more details, Citigroup comment, and latest share prices)
FRANKFURT (dpa-AFX) - The risk of further US import tariffs on goods from European NATO countries weighed heavily on German automakers' share prices on Monday. The sector suffered in response to tariffs announced by US President Donald Trump against Germany, Denmark, Norway, Sweden, France, Great Britain, the Netherlands, and Finland.
The tariffs are to remain in place until an agreement is reached on the "full and comprehensive purchase of Greenland" by the US, Trump stated. Starting February 1, additional tariffs of 10 percent will be imposed on all goods, on top of existing tariffs, rising to 25 percent from June 1.
Henning Cosman, analyst at British bank Barclays, described Trump's threats in connection with the Greenland conflict as "disturbing rhetoric," even though it remains unclear at this stage whether the newly threatened tariffs will actually be implemented.
Cosman wrote that he was not surprised by geopolitical risks affecting the auto sector. However, the threat has now become more tangible and is emerging sooner than expected, even if there are agreements, delays, and/or exemptions. "The discussed scale would significantly impact the margins of European original equipment manufacturers," he added, considering German carmakers to be the most affected by the current tariff risk.
BMW shares dropped 3.3 percent to €85.82, ranking among the weakest DAX stocks. Mercedes-Benz fell 2.4 percent to €57.44, VW lost 2.8 percent to €98.60, and shares in VW's holding company Porsche SE declined 3.7 percent to €36.13. In the MDAX, Porsche AG shed 3.1 percent to €40.89. Shares of suppliers such as Continental, Infineon, Aumovio, and Schaeffler also came under pressure.
The European sector index Stoxx Europe 600 Automobiles & Parts simultaneously fell to its lowest level since mid-October. In Paris, Renault and Michelin each dropped 1.6 percent. Stellantis slipped 2.2 percent. Ferrari lost 2.4 percent.
While Cosman described the impact on Ferrari as "less clear," he believes Renault and Stellantis should remain largely unaffected by Trump's tariff threats. According to his colleague Christophe Boulanger, Renault does not import vehicles from Europe to the US, and Stellantis does not ship significant volumes either. Barclays' auto expert also sees lower risks for suppliers.
Citigroup analyst Harald Hendrikse painted a bleak picture for the auto industry: "It is hard to imagine a worse start to 2026." He also pointed out that the EU's agreement on CO2 reduction by 2035 had failed to achieve "sufficient changes" and that the EU had also struck a deal with China to set minimum prices for electric vehicle import tariffs.
While Hendrikse noted that many risks regarding results and sentiment for the sector are already reflected in share prices, he said the news flow would need to "improve significantly before investors return to EU automotive stocks." According to him, the profits of Porsche AG and VW are most affected by the potential new tariffs, followed by Mercedes-Benz and BMW.
Analyst Frank Sohlleder from broker Activtrades summed up the mood: "US President Donald Trump is once again wielding the tariff club, hitting Europe at a sensitive spot." Investors are likely to painfully recall early April 2025, when Trump first unveiled his tariff plans and the German DAX index "plunged by an astonishing more than 18 percent in no time." Since diplomatic fronts remain hardened in the Greenland political thriller, it is expected that volatility on European stock markets will now increase massively./ck/ajx/he
