Slow EV momentum, trade tension bring volatility to European car makers - Berenberg
** Berenberg expects the European automotive sector to remainvolatile amidslowing electric vehicle (EV) momentum, trade tensions with China and regulatory uncertainties
** The broker lowers its 2024-26 OEM automotive operating profit outlook by about 10% on average
** It notes the EU tariffs on Chinese imports offer "temporary relief" but considers them too low to have a meaningful impact on the longer-term European BEV market share evolution
** "More localised (and EU-subsidised) battery production facilities in Europe, together with the gradual rollout of BEV-dedicated platforms, will help retain a certain level of
competitiveness," it says
** ButBerenberg sees European OEMs to benefit from a product mix boost and improved production efficiency, and expects the earnings downgrade cycle to soften in the next 12 months
** It also expectsa gradual improvement in volumes in Europe as options priced below 25,000 euros are set to hit the market in late 2024 and 2025
** Among automotive stocks, Berenberg prefers Mercedes MBGn.DE, Renault RENA.PA and Volkswagen VOWG_p.DE
Reporting by Eva Orsolya Papp
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