LIVE MARKETS-European light vehicle sales growth to underperform in 2025 - BofA
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EUROPEAN LIGHT VEHICLE SALES GROWTH TO UNDERPERFORM IN 2025 - BOFA
Europe's light vehicle (LV) sales growth is expected to underperform China and the U.S. in 2025 as U.S. trade tariffs and a lack of firepower for stimulus bite, according to Bank of America research analysts.
European autos stocks were a major area of focus as 2024 wrapped up, having vastly underperformed the broader market with a basket of names .SXAP down 12.2% in 2025 against a 6% rise in the STOXX 600.
In a note, BofA analysts point out that in October and November, Europe was once again the laggard globally, with Europe's weakness led by fading French sales.
The overall global LV SAAR (seasonally adjusted annualized rate) though accelerated in Q4 2024, led by the U.S. and China.
So what about 2025?
"From a regional perspective, while US trade tariffs will be net-negative for EU OEMs (original equipment manufacturer), the EU appears to lack firepower for stimulus measures, which we think only adds fuel to the fire," says BofA.
They see European LV sales staying flat next year, while the U.S.'s rate is seen growing 4.6% and China's by 1.8%.
Unsurprisingly a major topic will be "Trump, Trade & Tariffs".
"Even if some of the more extreme tariff proposals are not acted on, the environment will not be clear and stable. We see a heightened period of policy turmoil and uncertainty for as much as a year, possibly longer."
They add that a universal tariff would affect the economy of virtually every country in the world, and that the smaller the OEM the larger its dependency on free trade.
"This holds true particularly for luxury OEMs like Porsche, Ferrari & Aston Martin, which produce their vehicles exclusively in Europe and export them to customers in the rest of the world (particularly the US)," they write.
(Lucy Raitano)
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THURSDAY'S OTHER LIVE MARKETS POSTS:
EUROPEAN EQUITIES STRUGGLING FOR DIRECTION CLICK HERE
EUROPE BEFORE THE BELL: FUTURES SIGNAL POSITIVE START TO 2025 CLICK HERE
MARKETS USHER IN 2025 WITH TRUMP TREPIDATION CLICK HERE
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