Shares of car companies such as Mercedes Benz, BMW, or Volkswagen have underperformed compared to the DAX index in recent weeks. Good news arrives at an opportune time – at least in the European Union, car sales have increased significantly in October.

With 855,484 new registrations, sales rose by 14.6 percent compared to the same period last year (according to the manufacturers‘ association ACEA). For the first time since January, more electric cars have been sold than diesel. Despite the good development, the situation for car manufacturers remains tense and it is expected to become more complicated in 2024.

Volkswagen with almost 25 percent market share October’s European car market saw a growth of almost 15 percent, driven mainly by France, Italy, and Spain, where significantly more cars were registered than in October 2022. Germany, however, lagged behind with a 5 percent increase in sales.

25 percent of all vehicles sold in October belonged to the VW group, followed by Stellantis (incl. Peugeot, Chrysler, Citroën, Opel) with a market share of nearly 18 percent and Renault (including Renault, Nissan, Mitsubishi) with more than 11 percent. The market share of German premium manufacturers BMW and Mercedes-Benz was just under 7 and 6 percent, respectively.

With almost 14 percent, the share of all-electric vehicles among new registrations has recently increased again, and hybrids are still in demand – with the exception of Germany, where the abolition of subsidies has had an impact.

Auto stocks: The outlook could be better The European car market is still on the road to recovery. However, in recent weeks and months, the stocks of car manufacturers have not performed well. For example, the VW share price has fallen by nearly 10 percent in the last six months, BMW’s by almost 9 percent and Mercedes Benz by almost 18 percent.

The pre-crisis level of sales has still not been reached and the outlook for 2024 is not entirely positive. Persistent economic worries and high credit costs make a sales boom in the coming months unlikely. Car manufacturers could counter this with high discounts – however, both companies and investors should keep an eye on the margin.