Shares of major manufacturers, led by Volkswagen, BMW, and Mercedes-Benz, recorded declines ranging between 2% and 4%. This decline came after reports indicating that major economic powers intend to impose additional customs duties on imported cars, which threatens the competitiveness of the German industry in vital markets such as China and the United States.
The German automobile sector is suffering from double pressures: In addition to trade tensions and tariffs, companies face high energy costs and a faltering transition to electric vehicles. Analysts believe that any new customs restrictions will increase the pain of the sector, which represents the backbone of German industry, which may force companies to review their profit expectations for the current year.
The German Federal Automotive Industry Association expressed concern that these protectionist measures would lead to retaliation, disrupting global supply chains and raising prices for consumers.
Economists also warned that the continued decline in auto stocks may drag the German DAX index to lower levels, especially with the increasing geopolitical uncertainty and its impact on global trade.
