European Auto Stocks Hit by Tariff Uncertainty

European stock markets were expected to open mixed on Wednesday as investors awaited a slew of earnings reports and euro zone economic growth data. The Stoxx 600 index had its sixth straight positive session on Tuesday. Companies such as Airbus, Mercedes, and Volkswagen reported earnings, with UBS beating expectations. The euro zone's preliminary first-quarter GDP reading was expected to show 0.2% growth. Global attention remained on U.S. trade talks, with President Donald Trump signing an executive order adjusting some automotive tariffs.

German automaker Volkswagen reported a 37% drop in first-quarter operating profit to 2.9 billion euros due to the impact of U.S. tariffs on the global car industry. Despite a 2.8% increase in sales revenue to 77.6 billion euros, the company cited uncertainty regarding U.S. President Donald Trump's ongoing auto tariffs as a significant factor. Volkswagen expects operating return on sales, net cash flow, and net liquidity to be at the lower end of annual forecasts due to political uncertainty and increasing trade restrictions.

Stellantis, the multinational automotive conglomerate that owns brands such as Jeep, Dodge, and Chrysler, has suspended its 2025 financial guidance due to uncertainties surrounding U.S. President Donald Trump's trade policies, particularly tariffs on imported vehicles and auto parts. The company reported a 14% drop in first-quarter net revenues to 35.8 billion euros, which was still slightly above analyst expectations. Despite the revenue decline, the company's CFO noted initial progress in commercial recovery efforts. The news comes as the Trump administration has recently made changes to auto tariffs, maintaining a 25% tariff on imported vehicles but introducing partial reimbursements for vehicles assembled in the U.S.