European carmakers issue profit warnings as demand weakens and costs rise
European carmakers, including Stellantis and Volkswagen, have issued profit warnings 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 sector is facing challenges from declining sales in China and the U.S., alongside a potential trade war over electric vehicle tariffs. New car sales in the EU also fell 18.3% in August, marking the lowest level in three years. Carmakers are struggling with high inventories and competition from Chinese manufacturers, which are producing cheaper electric vehicles. Volkswagen has warned of possible plant closures in Germany amid these difficulties, as it negotiates pay with the IG Metall union.