European Auto Stocks Face Pressure as Chinese Carmakers Expand

Bank of America cut ratings and targets on major European automakers, citing accelerating competition from Chinese carmakers that have doubled their European market share to about 8% and saw roughly 100% YoY Q1 sales growth. The bank downgraded Stellantis to Underperform (PT cut to €5.5 from €7.5) and trimmed Renault to Neutral, while keeping Volkswagen at Buy but lowering its price targets. Analysts warn Chinese entrants expanding into compact, SUV and family segments, plus plans for local production (reducing tariffs and political friction), will pressure margins. BofA forecasts lower operating margins at Stellantis through fiscal 2027-28, signaling downside risk for European auto equities.