Most European vehicle manufacturer stocks did just as badly as stock market indices in the first quarter, according to Automotive News Europe. Concerns that the current economic slowdown is not just a fall-out from the war in Iraq are tarnishing “old economy” stocks, while “new economy” companies continue to buckle under debt.
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Rising unemployment, in Germany and France in particular, is expected to make consumers wary of purchasing expensive goods such as cars.
In the first quarter, passenger-car registrations in western Europe — the 15 European Union countries plus Iceland, Norway and Switzerland — fell 2.4% from a year earlier.
That is not for lack of trying by car makers, which have introduced deep discount strategies to hold on to their market share. But “this makes investors fret about their profit margins,” said Philip Wylie, head of the automotive team at PricewaterhouseCoopers Corporate Finance.
The average shareholder value index as calculated by Pricewater-houseCoopers is down 14.9% for car makers, and down 17.2% for suppliers.
But it is only 0.3% down for retailers, underpinned by a strong UK market, Automotive News Europe said.
