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European Auto Stocks Decline Amid Concerns Over China’s Tariff Response

On Thursday, some of Europe’s largest car manufacturers witnessed a further decline in their stocks amidst growing apprehension regarding China’s potential reaction to the new tariffs imposed by the European Commission on imported Chinese electric cars. The move by the Commission aims to counter what it perceives as excessive subsidies provided by Beijing.

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As of 0847 GMT, Europe’s auto index plummeted by 2.2%, marking its lowest point in over four months, while the broader region-wide STOXX 600 experienced a 0.6% dip. Notably, China-exposed Volvo Car saw the most significant decrease, dropping by 5%, followed by German automakers Porsche AG, Volkswagen, Mercedes, and BMW, which all experienced declines ranging between 2-4%.

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Analyst Daniel Schwarz from Stifel expressed concern, stating, “The risk is that China is now also taking actions that would especially hit the German OEMs who are exporting to China.”

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According to reports from state news agency Xinhua, Beijing expressed the hope that the European Union would reconsider its tariffs on Chinese electric vehicles and cease moving further in what they deemed as the “wrong direction” to protect its auto industry from competition.

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