Here is why the automotive sector has declined for the third consecutive month

26.05.2017 / 14:50

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Autos is the worst-performing European stock sector this month and three stories today remind me of the pressure the industry is facing.

- Bosch tied to diesel-cheating claims against fourth carmaker
- Trump blasts German carmakers' U.S. sales and threatens barriers
- Electric cars seen cheaper than gasoline models within a decade

Let's not forget the raid on Daimler earlier this week and the U.S.'s lawsuit against Fiat Chrysler as part of heightened scrutiny over diesel emissions. The sector also been pressured by a strong euro, as my colleague Aleksandra Gjorgievska notes.

Throw in weakening car sales in the U.S. and China and it doesn't look like auto valuations are going to re-rate from their immense discount to the Stoxx 600 anytime soon.

The fundamental of the company's diesel engines and the strong development of electric cars will drive stock prices in the sector in the future.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

Varchev Traders

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Here is why the automotive sector has declined for the third consecutive month

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