Hedge funds are stepping up bearish wagers against Europe’s automotive sector, as carmakers and suppliers face mounting pressure from US trade tariffs and intensifying competition from Chinese rivals, according to a report by the Financial Times.
Short positions in the autos and components sector have risen 35% year-to-date, according to S&P Global, peaking in April after US President Donald Trump imposed steep import duties. The US levy on European cars, initially set at 27.5%, was recently reduced to 15% but remains a drag on earnings.
French parts maker Valeo has emerged as one of the most shorted stocks in Europe, attracting bets from hedge funds including Marshall Wace, Millennium, Citadel and DE Shaw, with disclosed short positions worth roughly €355m. New York-based Jericho has also disclosed a short against Stellantis worth €127m, while BlackRock has targeted Volvo Cars with a €75m position.
Sector headwinds are piling up. Stellantis reported a €300m tariff hit in Q2, while Volkswagen disclosed a €1.3bn impact and joined peers Porsche and Mercedes-Benz in cutting guidance. Analysts forecast Germany’s top carmakers will see more than €10bn wiped from cash flows this year.
