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2025-08-01 18:16:12
[Big players under attack from all sides, are European automakers' 2025 profits in jeopardy?] ⑴ Fitch Ratings predicts that European automakers' profit margins will face pressure in 2025 due to Trump's tariff rhetoric and intensified market competition. ⑵ Furthermore, the accelerated shift to electric vehicles will dilute profits, and Fitch expects European auto production to remain 15%-20% below pre-pandemic levels. ⑶ Trump's tariff rhetoric will negatively impact European automakers' US sales, particularly high-end models exported from Germany, Japan, and South Korea. ⑷ For example, Volkswagen's Porsche and Audi brands, as well as Mercedes-Benz's SUV production, could be impacted. ⑸ European automakers are facing challenges from local Asian competitors, suffering continued market share erosion and pricing pressure even in the premium segment, where they have traditionally had a strong advantage. ⑹ Fitch expects that while most investment-grade automakers are well-positioned to weather these challenges, their earnings and free cash flow generation will decline further in 2025, leading to a negative rating outlook and action for the sector.
