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Automakers are worried about the European economy


Carmakers BMW and Stellantis on Thursday expressed concern about Europe’s economic outlook, joining a group of retailers and others warning about consumer confidence on the continent. this and affect their stocks.

“It is clear that the macroeconomic situation in Europe is more challenging, which gives me pause,” said Stellantis CFO Richard Palmer. “If there’s any place I’m more concerned about, it would be Europe than anywhere else really based on the macro.”

This follows a serious assessment of consumer sentiment in Europe from consumer goods company Unilever and news of lower European spending from Amazon.

Like other major auto companies, Stellantis and BMW have been affected by supply chain disruptions stemming from the global coronavirus pandemic that has reduced auto production.

They also benefited from strong consumer demand amid a low vehicle supply, allowing them to raise prices and stay high even as semiconductor shortages show signs of abating.

BMW posted a 35.3% increase in third-quarter revenue despite a slight drop in vehicle sales. Stellantis said its revenue grew 29% thanks to a 13% increase in vehicle sales as more semiconductors were available.

Analysts fear that demand could drop, as well as automakers getting the supplies they need, weakening prices and hurting profits.

But this week, Ferrari said it was confident about its prospects for this year and 2023 because of demand for luxury caras well as its pricing power, remains strong.

Both BMW and Stellantis said on Thursday that they have vehicle order books in place through the second quarter of 2023.

But BMW Chief Financial Officer Nicolas Peter said high inflation and rising interest rates could hurt buyers’ wallets.

“This is causing conditions for consumers to deteriorate, and will affect their behavior in the coming months,” he said. “As a result, we continue to expect above-average book orders to normalize, particularly in Europe.”

He added that customers were unhappy about the wait new carso “a slight decrease (orders) would not be negative.”

Palmer said Stellantis was “ready for any soft demand” but in the short term has been hit by a shortage of drivers to supply car to dealer.

“Right now, we can’t build enough cars,” he said. “And the ones that we can build in Europe at a time when we’re struggling to hit a selling point.”



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