The automotive industry faces significant challenges, with Stellantis (STEEL) is the latest to adjust its full-year outlook due to growing inventory issues and other industry-related headwinds. Bernstein Senior Analyst Daniel Roeska joins Market Domination to discuss his perspective on the future of the automotive industry.
Roeska observes that the U.S. market is on a “mean reversion path,” explaining that car prices spiked during the pandemic but have gradually declined since then. Regarding Stellantis specifically, he notes that in the U.S. market there has been a “situation” where car prices have risen faster than competitors, “and product quality hasn’t really caught up.” This has led to inventory problems as a price correction becomes necessary. However, he adds that the European market, “while not great, is on a pretty decent path.”
Regarding the wider automotive industry, Roeska recommends Ford (F) to investors. He says, “We still think there’s an advantage to owning Ford at this point. We have a better performance on Ford because their Ford Pro business is really resilient. And they’re starting to regain traction in the European EV market, and that will push them beyond consensus earnings in ’25.”
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This post was written by Angel Smith