Equity, European auto sector increasingly weak
The abrupt slowdown in 2024 is only part of the slow decline of the European auto sector, which has seen it gradually lose strength on the stock list over the past 10 years.
After an all-too-positive 2023 in terms of registrations, the European auto sector experienced a roller coaster 2024. From a 12 percent increase in registrations in April, we arrived in August 2024 with a 16.5 percent drop in registrations compared to the previous year, mainly due to a decline in sales of electric cars, which lost 43.9 percent market share.
But on the stock markets, the european auto sector has been showing signs of weakness for a longer time. The chart we show below gives us some insight into this. It is the relative strength ratio between the Automotive and Parts sector and the overall Stoxx 600 index.
We can see the sharp fall since early 2024, with the index slipping below the 10- and 52-week averages and approaching the 2020 low. But even more sharply noted is the gradual weakening of the sector relative to the overall index over the long term, evidenced by the position below the 10-year average (blue line).
