Automotive investors were reluctant to bet on the whole sector. Instead they preferred to pick and choose from automaker, supplier and retailer stocks in the third quarter, basing their decisions on first-half financial results.
Says Philip Wylie, automotive team leader at PricewaterhouseCoopers Corporate Finance: "The market is being hit by worries over steel prices, even though some of the companies have contracts until 2006."
Among automakers, PSA/Peugeot-Citroen and Renault fared best in Q3. The two French companies surprised investors with better-than-expected first-half results.
The European car and light commercial vehicle market expanded 3.2 percent in the first half, but much of that increase was captured by fast-growing Korean and Japanese brands.
Only two publicly listed auto retailers in Europe made their shareholders a profit in Q3 – Bilia and Stern Groep. The latter was helped by speculation it would become privately held, resulting in a lucrative buyback of shares.
Kolbenschmidt-Pierburg's anticipated takeover helped the German-based piston maker return 12.3 percent to investors in the third quarter, second only to German seat maker Grammer's 34.6 percent return.