Mercedes shares fell more than 8% Friday after becoming the latest carmaker to cut its guidance this year as sluggish demand in China and trade disputes weigh on the sector.

The company said late Thursday that it now expects group earnings before interest and taxes (EBIT) to come in “significantly below” the previous year and that its adjusted return on sales would be between 7.5% and 8.5%, down from its earlier forecast of 10% to 11%.

Shares pared losses slightly to trade 7% lower as of 11:20 a.m. London time.

The auto sector was dragged lower, down 3.2%, as Volvo and Stellantis fell 4% and 2.7%, respectively.

Mercedes’ revision was triggered by a “further deterioration of the macroeconomic environment,” primarily driven by weaker Chinese consumption and a prolonged downturn in the country’s real estate sector, the firm said in its Thursday statement.

“This affected the overall sales volume in China including sales in the Top-End segment. Overall, the sales mix in the second half of 2024 is expected to remain unchanged versus the first half, and therefore weaker than originally expected,” the company said.

Fellow German automaker BMW also recorded steep losses last week after lowering its 2024 profit margin outlook due to slumping sales in China and an issue with a braking system supplied by Continental.

Volvo Cars earlier this month also scaled back its margin and revenue targets, after announcing it was no longer targeting 100% all-electric vehicle sales by 2030.

Analysts from UBS said Mercedes’ outlook revision was “not surprising” given the current pressures from China, but they noted that the scale of the warning compared to the firm’s peers would likely spark trepidation from investors and lead to further downgrades.

“The fact that MBG’s [Mercedes-Benz Group’s] profit warning is bigger than BMW’s and that it’s not related to a big recall will leave the market puzzled about underlying profitability and capital allocation going into 2025,” they wrote in a Thursday note.

The European auto sector has come under increasing pressure as it attempts to navigate rising trade tensions between the European Union, the U.S. and China.

Germany, whose economy is heavily dependent on the auto industry, has been vocal in its opposition to EU tariffs on Chinese EVs, saying the plans could stifle business in one of its biggest markets.

“The Chancellery, led by Olaf Scholz, a Social Democrat, is indeed very skeptical of those tariffs and is letting everyone in Brussels know about that,” Carsten Nickel, managing director at Teneo, told CNBC’s “Squawk Box Europe” on Friday.

The EU and China on Thursday agreed to further talks about the measures and could re-examine a minimum-price deal previously rejected by Brussels, the European Commission said.

Nickels said the move was an indication that China’s “carrot and stick” approach to negotiations appeared to be working to a certain degree, and that the EU may now be more willing to consider measures such as quotas, minimum prices and maximum quotas.

DETROIT – A year after unprecedented strikes by the United Auto Workers against the Detroit automakers, the union is once again threatening work stoppages that could disrupt the U.S. automotive industry.

The UAW on Wednesday announced a strike deadline at a Ford Motor tool and die plant that supports the automaker’s Rouge Complex near Detroit – one of two U.S. plants that produce the company’s highly profitable F-150 pickup truck.

The 11:59 p.m. Sept. 25 strike deadline came a day after UAW President Shawn Fain announced plans to hold strike authorization votes at one or more local unions covering Stellantis plants in the U.S.

Both announcements amount to warning shots against Ford and Stellantis and center on union contracts and local issues at the facilities. The union has not announced similar actions against General Motors.

UAW members are covered by national agreements, which include issues such as wages, bonuses and other benefits, as well as local contracts that are tailored to each facility.

Local contracts have historically taken months, if not years, to settle after a national agreement is reached. Sometimes they are not settled at all during the terms of the national deal.

Last year’s auto worker strikes came during historic negotiations over national contracts with all three Detroit automakers at once. The union won record wage increases — 25% over the term of the deal — and reinstatement of cost-of-living adjustments, but labor experts said it could be at the expense of jobs.

The most recent strike deadline for Ford was called over local plant negotiations involving “job security, wage parity for Skilled Trades, as well as work rules,” according to the union.

A strike at a supporting facility for an assembly plant could impact vehicle assembly if the automaker cannot make contingency plans for the parts. The plant employs fewer than 500 workers.

Ford, in a statement Thursday, said negotiations with the union are ongoing: “Ford invested $15 million in the plant last year and we have been at the table problem-solving. Negotiations continue and we look forward to reaching an agreement with UAW Local 600 at Dearborn Tool & Die.”

The strike deadline takes tensions there a step further than at Stellantis, where the union has announced authorization voting. Strike authorization votes are procedural. They are votes by workers to authorize UAW leaders to call a strike, if warranted. Such votes for the national contract negotiations typically pass with more than 90% of worker approval.

The announced voting at Stellantis comes after months of mudslinging by Fain against Stellantis and its CEO, Carlos Tavares, following product cuts, layoffs and other actions that the union has deemed detrimental to union workers, including the potential to move production of vehicles such as the Dodge Durango out of the U.S.

The union on Monday filed unfair labor practice claims with the National Labor Relations Board against Stellantis, saying the automaker refused to “provide the Union with relevant information” regarding investments and products.

“The company wants you to be scared, but we are 100% within our rights and within our power to take strike action if necessary,” Fain said Tuesday night during an online broadcast.

Stellantis has contended such a strike would be illegal.

Fain has been adamant that the union won the right to strike over the automakers’ product and investment commitments during national bargaining. However, there remains language in the contracts regarding market conditions, economics and other factors that could grant the company leniency.  

Stellantis Tuesday night after Fain’s strike authorization vote announcement criticized the union leader for his actions and comments.

“Shawn Fain continues to allege that the company has violated the contract, but to date has provided no data or information to back up his claims. Instead, he continues to willfully damage the reputation of the company with his public attacks which is helpful to no one including his members,” Stellantis said in an emailed statement.

Stellantis said a strike “does not benefit anyone – our customers, our dealers, the community and, most importantly, our employees.”

In addition to Monday’s NLRB complaint against the company, Fain said 28 Stellantis locals have filed grievances against the automaker. Those complaints cover about 98% of Stellantis’ UAW-represented workforce, according to the union.

“Once we’ve authorized a strike at a local, we meet with the company seven times and either resolve the issue or take strike action as our union sees fit,” Fain said.

As of the beginning of this year, Stellantis employed roughly 43,000 workers represented by the union.

The union this week also began contract negotiations with Volkswagen. VW workers in Chattanooga, Tennessee, overwhelmingly voted in favor of UAW representation earlier this year.

DETROIT — Stellantis‘ Jeep brand is well known for scaling tough terrains, but its latest challenge of achieving 1 million vehicle sales domestically by 2027 will be a steep hill to climb.

Jeep, a coveted brand in the automotive industry, has been in a U.S. sales rut that has included five years of annual sales declines, with 2024 on pace to potentially become the sixth.

Nonetheless, Jeep CEO Antonio Filosa believes the brand’s worst days are behind it and it’s still possible to achieve the 1 million sales target. The company is executing a turnaround plan for the quintessential American SUV brand that he says is already beginning to pay dividends following a 9% sales decline in the U.S. during the first six months of the year.

The plan has included lowering pricing across its lineup, including on high-volume models such as the Jeep Compass and Grand Cherokee SUVs; rolling out special offers such as incentives or 0% financing; and increasing spending on marketing and advertising, Filosa said. It also will include an upcoming roadshow with dealers to address additional problems and concerns.

Such actions can eat into profits, but the brand’s average transaction prices have skyrocketed from less than $40,000 in 2020 to north of $50,000 this year, according to Cox Automotive. Jeep’s average transaction price has been above the industry average since 2021, Cox reports.

“The good thing is that the actions we implemented in the previous months, they are also resulting in important growth as well in the U.S.” Filosa told CNBC during a virtual interview Monday.

Filosa’s comments were made a day before the chairman of the Stellantis National Dealer Council penned a scathing open letter targeting Stellantis CEO Carlos Tavares over the company’s sales losses and other business decisions.

Stellantis sold more than 1.5 million vehicles last year in the U.S., a roughly 1% decline from 2022. That compared with an industry increase of 13% in 2023.

Filosa said Jeep, which reports sales quarterly, saw U.S. sales rise last month: They were up 28% from August 2023 and 55% from July. Jeep also lowered its vehicle inventory by about 25,000 units during that time. But the brand has a ways to go to accomplish any notable turnaround in sales.

Jeep’s U.S. sales have plummeted 34% from an all-time high of more than 973,000 SUVs sold in 2018 to less than 643,000 units last year. While most auto brands increased sales last year, Jeep was off by about 6%.

The most recent declines follow the company ending production last year of the entry-level Renegade and the Cherokee compact SUV — two mainstream models with peak U.S. sales of around 300,000 units annually from 2016 to 2019.

“For Jeep to lose Jeep Cherokee … and Jeep Renegade has been an important hit to us,” Filosa said. “Our market coverage declined from an average of 80% to 45%.”

Filosa said Jeep expects to recover market share “very quickly” and return to an 80% market share coverage, which includes the segments Jeep competes in, by the end of next year, when it introduces an unnamed replacement for the Cherokee as well as new electrified models.

In addition to the termination of the new models, Stellantis’ brands such as Jeep have focused on profits over market share under Tavares’ time as CEO.

Tavares has been on a cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021. It’s part of his “Dare Forward 2030” plan to increase profits and double revenue to 300 billion euros ($325 billion) by 2030.

As part of that plan, Jeep is targeting selling roughly 1.5 million SUVs globally by 2027, including 1 million in the U.S.

To achieve such goals, Tavares earlier this year said he has allowed leniency in some pricing, incentives and other financial targets after speaking with the company’s dealers.

Filosa said he is continuing those efforts by meeting with dealers regarding the turnaround initiatives. He’ll participate in a dealer roadshow beginning next month with the brand’s new North American head, Bob Broderdorf.

Also assisting Jeep, which is the top seller of plug-in hybrid electric vehicles in the U.S., will be several new vehicles. The brand is launching the all-electric Wagoneer S later this year, followed next year by a Jeep Wrangler-inspired “Recon” SUV and extended-range, plug-in versions of its large Wagoneer and Grand Wagoneer SUVs.

Ahead of such vehicles, Jeep has increased its media spending by 20% compared with the first half of the year, according to the automaker.

“Now it’s time to push, and to accelerate, sales to recover as much as [they] need to do. Next year, obviously, we will talk all growth, since we have new products. … I believe [next year] will be a completely different story,” Filosa said.

Jeep also is attempting to increase the quality and reliability of its vehicles, which have historically ranked below average in third-party rankings. He said this includes delaying launches of its upcoming Wagoneer S and Recon by four to six weeks.

However, building problem-free vehicles is easier said than done in the automotive industry. Jeep on Monday confirmed it is cooperating with U.S. auto safety regulators on an investigation into more than 781,000 newer Jeep Wrangler and Gladiator SUVs after reports of underhood fires.

Filosa confirmed knowledge of the probe, but he declined to provide additional details. Tavares earlier this year highlighted quality problems within the automaker, specifically at a plant in suburban Detroit that makes the company’s Ram 1500.

“We are very carefully monitoring the evolution of quality of Jeep Wagoneer S in the plant, and Jeep Recon as well,” Filosa said. “The only mandate that the plants have from me is to just deliver the car when it’s in perfect quality.”

The new all-electric SUVs will be produced at Stellantis’ Toluca Assembly Plant in Mexico. The company has not confirmed a production location for the replacement to the Cherokee SUV, which was produced at a now-dormant plant in Illinois.

DETROIT — The United Auto Workers union on Monday said it had filed federal unfair labor practice charges against Stellantis for allegedly violating contract terms and attempting to move production of the Dodge Durango out of the U.S.

The charges are the latest action the union has taken against Stellantis, which has drawn the ire of UAW leaders for production cuts, layoffs and other actions since the two sides reached a new contract last year.

“In our 2023 contract, we won major gains, including a commitment to reopen an idled assembly plant in Belvidere, Illinois, and to build the Dodge Durango in Detroit. We also won the right to strike over those commitments, if we have to,” UAW President Shawn Fain said in a statement. “Now, Stellantis wants to go back on the deal. As a united UAW, we intend to enforce our contract, and to make Stellantis keep the promise.”

Stellantis, which has delayed plans for the Illinois plant, did not immediately respond to a request for comment.

The company argued lin August that it “has not violated the commitments made in the Investment Letter included in the 2023 UAW Collective Bargaining Agreement and strongly objects to the union’s accusations.”

The union said several UAW local chapters covering thousands of members have also filed contract grievances over what they allege is the company’s attempt to move Dodge Durango production out of the U.S., allegedly in violation of the UAW’s national agreement. 

The union did not disclose when the attempted move occurred or where the company allegedly wanted to move Durango production.

A UAW spokeswoman cited media reports about the vehicle potentially being moved to a plant in Ontario, Canada.

A copy of the latest National Labor Relations Board filing provided by the UAW did not mention the Durango. It accused the automaker of “refusing to provide the Union with relevant information.”

The NLRB confirmed the UAW’s filing. The union has multiple open charges against several automakers in the U.S.

The UAW said Monday it has more than 24 open grievances against Stellantis regarding the company’s product and investment plans disclosed as part of the union’s contract with the automaker.