Mercedes shares fall 8% on lower profit outlook
- Profit outlook cut: Mercedes $MBG.DE+3.1% expects significantly lower pre-tax profit compared to the previous year.
- Weak demand in China: The Chinese market, a key market for Mercedes, saw a decline, which negatively impacted the outlook.
- Trade tensions: Rising tensions between the EU, the US and China are increasing pressure on European carmakers.
- Stock Decline:$MBG.DE+3.1% shares fell 8% following news of weaker demand and poorer financial results.
- Entire automotive sector affected: Weaker Chinese demand and trade disputes are negatively impacting the entire automotive industry in Europe.
What do you think about investing in this sector at the moment?
An 8% drop in the stock is quite a lot. Well, the car companies aren't doing so well right now, so I won't be buying.
It's not a bad car company, but I don't want their stock in my portfolio.
Mercedes is not a bad car company, but I prefer other and better car companies.
It could be an interesting opportunity to establish a position now.
This sector is very unstable right now, especially in Europe. I stay away from it.
I would not invest in this sector now. I have a few shares of $BMW.DE+3.3% and I'm going to hold them. Anyway, I find it hilarious that a few years back Mercedes wanted to make only electric cars by 2030 and now they have started investing billions of euros in the development of internal combustion engines. Overall the switch to majority electric car production has caught up with the car companies pretty hard. On the other hand, I like the strategy of $TYT.L+4.9% and $HMC-4.1% for example, which are more focused on hybrid production.
I personally don't like this sector very much. Lately the car market has become quite crowded and not many people are buying our cars. The problems of the individual large factories and companies don't tell a different story.