Asia Tech Wire (Oct 15) -- European car companies, including Volkswagen, Stellantis, BMW and Mercedes-Benz, have lowered their profit expectations as they face multiple challenges in the transition to electrification.

In a statement released on September 30, Stellantis announced that it expects the adjusted operating income margin in 2024 to fall to 5.5% to 7%, significantly lower than prior "double digit".

On September 27, Volkswagen lowered its full-year 2024 financial forecast for the second time in less than three months due to the poor performance of its core passenger car division.

Volkswagen cut its 2024 global deliveries target to about 9 million vehicles and profit margin to 5.6%, compared with the previous target of 6.5% to 7%, while revenue expectations were revised from a 5% year-on-year increase to a 0.7% year-on-year decline to €320 billion.

Taking into account the global recall of 1.5 million vehicles, as well as the continued low demand in important markets such as China, BMW previously adjusted its 2024 performance expectations, with downward revisions to deliveries, EBIT margins and other indicators.

Among other things, deliveries will decline year-on-year, compared to the previously expected growth, while EBIT margin is expected to be between 6% and 7%, down from the previously expected 8% to 10%.

Mercedes-Benz also lowered its 2024 financial expectations due to weak performance in China. The company lowered its full-year return on sales for its automotive business to 7.5% to 8.5%, down from its previous forecast of 10% to 11%, and expects EBIT to be "significantly below" the prior year level.

Starting next year, the European Union will implement new emissions regulations, and if the average emissions of new cars launched by car companies exceed the regulations, they need to pay excessive emissions fines.