European auto stocks erase USD 10 billion after Stellantis warning: Report 

European auto stocks fell nearly 4% on Monday, as a warning from Volkswagen, Aston Martin and Stellantis stoked concerns around the sector's earnings outlook. This comes against the backdrop of a year marked by Chinese competition, and a slowdown in demand, Reuters reported. 

The rout erased roughly USD 10 billion from the market value of the STOXX Auto & Parts index with Stellantis nosediving 14% after cutting forecasts and stating that it would burn more cash than previously expected, Reuters noted. 

Stellantis attributed this to worsening industry trends, higher costs to overhaul its US business, and Chinese competition on electric vehicles, the newswire reported. 

Citi expects the sector weakness to continue in weeks to come, adding that a recovery in Stellantis looked unlikely until 2025.

In a separate development, Volkswagen on Friday, reduced its annual outlook for the second time in less than three months. Aston Martin reduced its forecast for production volumes citing supply chain disruptions and weakness in China. It also noted that it would report a lower annual core profit, Reuters reported.

Earlier this month, Mercedes and BMW downgraded their forecasts on the back of weakning demand in China, the newswire noted. Concerns over falling earnings have increased pressure on valuations, with the sector now trading at a near-record discount of 60% to the market based on a price-to-earning metric, as per LSEG Datastream estimates.