German automakers fall on concerns over Trump return and rising U.S. tariffs

Earlier on Wednesday, BMW reported disappointing quarterly earnings, sending the company’s shares down 6.8% in Frankfurt. Shares in 911 sports car maker Porsche fell to their lowest intraday value since they began trading more than two years ago.

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Additional tariffs would hurt German automakers, which export more cars to the United States than to any other country. The market is increasingly lucrative for them due to strong demand for large sport utility vehicles and a slower shift to electric vehicles than in Europe, allowing them to sell more higher-margin combustion engine models.

Trump said during the campaign that he planned to impose tariffs on foreign-made cars shipped to the United States to protect local jobs.

Mercedes-Benz Group AG shares fell 4.9%. Volkswagen AG fell as much as 4.4%.

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German automakers operate several factories in the United States that produce vehicles for local buyers and for export, meaning any countermeasures from Europe could increase the impact of the trade dispute.

A conflict with the United States would create another problem for Germany, which already faces fierce price competition from China and weak demand in Europe.

“Trump is pursuing a clearly protectionist agenda that relies on higher import tariffs and greater restrictions on international trade,” Clemens Forster, director of Germany’s Ifo Institute of Economics, said on Wednesday.

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First published date: November 8, 2024 09:39 AM IST