Shares of Renault and Volkswagen are falling in Europe, after UBS downgraded both to sell, citing the seriousness of China's competition.
That was the message from UBS analysts who downgraded shares of Renault SA RNO, -4.85% and Volkswagen AG VOW3, -3.63% VOW, -3.26% to sell from neutral, citing threats from China competition. Shares of Renault tumbled 3.8% to €35, while Volkswagen dropped close to 3%, leaving shares at €109.70.
They added that legacy mass manufacturers are at the most risk from structural market losses due to rising competition from China OEMs [original equipment manufacturers] and Tesla TSLA, +0.46%. As for Volkswagen, UBS analysts said the German automaker is the OEM that’s “globally most negatively exposed to the rise of Chinese carmakers.” A former No. 1 OEM in China, the company is “potentially on the path to marginalization and as #1 in Europe, it is likely to be most impacted longer-term by highly competitive Chinese EVs.”
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