US automakers’ stocks fall sharply

Shares of US automakers led by Ford Motor, General Motors and Rivian fell by an average of 5% during today’s trading after Morgan Stanley analysts downgraded the US automakers, citing a difficult market environment characterized by low prices and increasing competitive threats, especially in China.

Morgan Stanley analysts led by Adam Jonas said in a note to investors that legacy US automakers face the risk of lower prices and signs of weak consumer demand, at a time when they have high inventories of vehicles, while automakers from Japan and South Korea, in addition to electric vehicle manufacturers, are gaining increasing market share.

The analysts added that competitive pressures from China, which produces 9 million more cars than it buys, are also weighing on US automakers, according to CNN.

Morgan Stanley cut Ford’s rating and price target to $12 from a previously expected $16, sending the company’s shares down more than 4 percent to $10.44 a share, heading for their biggest daily drop since early August. The bank also cut General Motors’ rating and price target to $42 from $47, sending its shares down 5.2 percent to $45.58, their biggest daily drop since early September. Electric vehicle maker Rivian Automotive and Canadian auto parts maker Magna International were also down, with Rivian shares down 6 percent and Magna shares down 3.6 percent on the news.