Daimler Guidance Could Face Guillotine as Auto Pricing Softens in China (F) (GM)
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Down)Dividend Yield: 3%
Revenue Growth %: 0.0%
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Premium auto prices are softening in China, according to analysts at Morgan Stanly. In a note today, analysts at the bank pointed out a few key points that reflect the change. For example, the BMW X5 once had a markup but now it is selling at an 8 percent discount. It is the same story for the Mercedes E-Class, which has been discounted by up to 11.5 percent vs. 8 percent six months ago.
According to China dealers, carmakers are funding most of the discounts as they chase aggressive volume goals. Inventory in China is now in-line and supply is rising fast, say analysts.
Considering the weakening conditions in China and the EU, analysts at Morgan Stanley think Daimler may cut Mercedes 2012 earnings guidance. Earlier today, Citi cut BMW to Neutral due to what they see as a more challenging auto market. Traders are also eying shares of Ford (NYSE: F) and GM (NYSE: GM) as China's economy slows.
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According to China dealers, carmakers are funding most of the discounts as they chase aggressive volume goals. Inventory in China is now in-line and supply is rising fast, say analysts.
Considering the weakening conditions in China and the EU, analysts at Morgan Stanley think Daimler may cut Mercedes 2012 earnings guidance. Earlier today, Citi cut BMW to Neutral due to what they see as a more challenging auto market. Traders are also eying shares of Ford (NYSE: F) and GM (NYSE: GM) as China's economy slows.
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