European carmakers face profit declines amid weak demand and rising costs

European carmakers, including Stellantis and Volkswagen, are warning of declining profits due to weak demand and rising costs. This has led to significant drops in their market values, with Stellantis shares falling nearly 11% and Aston Martin's shares plunging 20%. The warnings come as demand in key markets like China and the U.S. weakens. European new car sales fell 18.3% in August, marking the lowest level in three years. Stellantis has particularly struggled in North America, where it relies heavily on sales of expensive vehicles. Volkswagen recently cut its 2024 profit outlook for the second time in three months. The company, along with others, faces challenges from increased competition and a potential trade war over electric vehicle tariffs between the EU and China.