Shares in German carmakers tumbled on Wednesday as investors reacted to Donald Trump's victory in the US presidential election, fearing steep tariffs on foreign-made cars. BMW fell by 6.6%, Mercedes-Benz by 6.4%, Porsche by 4.9% and Volkswagen by 4.3%, making them among the biggest fallers on Germany's DAX index.
Trump has pledged to impose a 10% tariff on all non-US goods and specifically targeted German carmakers, urging them to build plants in America. The US is the largest export market for German automakers, which are already under financial pressure from declining sales and profits.
In contrast, US carmakers benefited from expectations of corporate tax cuts and protectionist policies. General Motors and Ford rose 4% in pre-market trading, while Stellantis gained 1.3% in Europe. Tesla shares surged 13% as investors bet on CEO Elon Musk's support for Trump.
The tariff threat adds to challenges for European carmakers grappling with a global slump in demand. BMW reported a 79% drop in quarterly profit to €838m and a 13% sales decline, partly due to weak Chinese demand. Toyota also reported falling profits and sales on Wednesday.
Chinese carmakers are unlikely to be directly affected, as the Biden administration had already raised tariffs on Chinese EV imports to 100%.
