Unable to predict the constant impact of the changing trade war for President Trump, Stelantis and Mercedes-Benz have become the latest car manufacturer on Wednesday to cancel profit instructions that indicate uncertainty in the market caused by the definitions.
Volkswagen issued instructions at the bottom end of its expectations, but the UBS analyst Patrick Hamel wrote in a customer note that the German group's view “did not include any effect on the American definitions”, describing it as “withdrawing the guidance.”
Stelantis Financial Director Doug Ostroman described the mood, and told analysts: “Most of us are waiting for more clarity.”
In meetings with the company, its competitors and suppliers, “Fabio Caldato, from the director of the fund, said,” Corporate management teams, frankly, explained the lack of vision, so we did not really shocked Stellantis's decision to withdraw its guidelines, “said Fabio Caldato of the Fund manager, ACOMEA SGR, who owns Stellantis shares.
“As investors, we play with the ear … relying on the common sense prevailing in the current tariff negotiations,” he added.
Trump's trade war has led to the outbreak of markets in recent weeks, and even before the recent moves, Reuters analysis showed that about 40 companies around the world have withdrawn or reduced their guidelines in the first two weeks of the profit season in the first quarter, including General Motors and Volvo cars.
This confirms the chaos launched by the constantly changing definitions and uncertainty in the administration rooms and on the main street, which suffocate the Americans' appetite for spending.
The 25 % tariffs are expected to raise thousands of dollars earlier this month, which reduces the demand and pressure on the accumulation of the industry that is already struggling with the slowdown in the transition to electric cars.
In the face of the lack of clarity, Mercedes executive managers succeeded in an aura of academic calm during the collective call in the first quarter of the company with analysts, in reference to the Trump tariff policy as a “dynamic market environment”.
Financial Director, Harald Wilhelm, told analysts that the entire year’s guidelines “cannot be provided today with a reliable degree of certainty.”
But he warned if the American customs tariff remains valid throughout the year, this will lead to 3 percentage points of profit margins for car sales and one percentage of trucks.
The CEO first said that the German auto industry company is still holding “constructive” talks with the Trump administration in the future American production fingerprint, but confirmed that the company was determined to “see this with a fixed hand.”
The investor's reaction was silent, as the markets digested on the latest requests that Trump issued on Tuesday, which submitted some relief from American auto manufacturers.
Under these requests, automobile companies will also be subjected to a 25 % tariff on steel and aluminum, or on Canadian and Mexican goods related to the American Fintanel crisis. They will also get credit for vehicles that bring us together.
Volkswagen and Mercedes shares decreased by 2.7 %, while Stelantis – more dependent on American production and benefit more than changes – decreased by 1.9 % in European trading.
British luxury Aston Martin said on Wednesday that it limits exports to the United States after it built inventory lists before the attendees that should continue until early June, after which the border duties will be divided with its customers.
Ready
Although analysts appeal to a quarterly profit call, Volkswagen Cfo Antlitz rejected the impact of definitions, saying it is very early to do this.
“We are ready to work with policy makers to find solutions to support the industry while maintaining opportunities for workers,” said Antigense, adding that the group will change its expectations as soon as there is more clarity.
The auto industry plans in the coming, as billions of dollars are weighing in investments in the collection factories and new models based on car sales expectations. The basis of all these investments is the certainty of the market.
“Trump has a busy record of changing the path, so there is every opportunity we will see more amendment,” said Philippe Ciller von Amindey, chief trading employee in the British car market on the Internet.
“From investment decisions to the availability of stocks and consumer confidence, this is a global industry that needs clarity – not a surprise – to flourish.”
Stelantis said in a statement that its decision to withdraw the guidance was “due to the sophisticated tariff policies, as well as the difficulty (in) that predicts the potential effects of market sizes.”
Pal Skirta, an analyst at the German research company Metzler, said that Trump's move on Tuesday to grant car manufacturers are two years to enhance the percentage of local components in the United States -made vehicles, it is unlikely to retract his management of definitions, and may commit to pressure to increase local production.
He said: “This may lead to burdens of manufacturers,” as it consists of “the costs of continuous tariff”, while also forced to invest in restructuring global supply chains and increasing American production.
