President-elect Donald Trump shakes hands with Vice President-elect Mike Pence as he gives his acceptance speech during his election night rally, Wednesday, Nov. 9, 2016, in New York. (AP Photo/John Locher)

European investors are likely to seek out automotive stocks which don’t do business in the U.S. market until it becomes clearer exactly what a new Trump administration would do about the economy in general and free trade in particular, according to a report from investment researcher Evercore ISI.

That would favor French manufacturers like Renault and PSA (Peugeot-Citroen) and penalize German ones like BMW, Daimler’s Mercedes and Volkswagen, the report said.

Ford, which clashed with the president-elect earlier this year, is unlikely to be penalized though.

In trading on European stock markets Wednesday VW, which also owns Audi, was off 2.4%, and BMW dived 3.5% while Daimler rose 0.3%. Renault fell 2% and PSA jumped 2.5%.

Reuters reported that the STOXX Europe 600 was down 1.1% on Wednesday morning, but well off earlier lows. Growth-sensitive sectors such as autos, financials and oil firms were among the biggest laggards.

Investors might also be worried about the impact on Ford Motor, which had a run-in with the Trump campaign earlier this year.

“Mr Trump tore into Ford Motor Co for its plans to move small-car production to Mexico,” according to a Wall Street Journal article published Tuesday, headlined “Investors Cast Their Votes For Companies Trashed by Trump”, and which added that Trump’s chances of winning the presidential election appeared to be waning Monday.

During the campaign, Trump pledged to renegotiate the NAFTA free trade deal between Mexico, the U.S. and Canada.

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The Evercore ISI report said it wasn’t 100% clear what policies will be enacted by Trump. There had been talk of a 35% import tax on cars, trucks and parts made in Mexico.

“However, we believe we are still some way from seeing such a tariff imposed, if it does indeed ever come to pass,” Evercore ISI said in the report.

“We would favor the French like Renault over the Germans BMW, Daimler, VW, purely on the lack of U.S. exposure given the fall in the dollar and uncertainty. We would continue to prefer secular stories over cyclical, hence high quality suppliers like Delphi, Harman, Mobileye, Valeo,” the report said.

“However if global production forecasts turn negative on the back of increased economic uncertainty following the result then suppliers and (manufacturers) alike will likely sell-off.”

“With regards to the U.S. (manufacturers), in the near term, we see the result as negative. Rhetoric around Mexican production, trade tariffs and a potential step-back in consumer confidence will likely weigh on stocks and auto demand,” the report said.

The report wondered if Trump could deliver on infrastructure promises and said it would be some time before any “buy the dip” opportunity emerges.

The report said GM was the biggest manufacturer in Mexico with 838,000 vehicles a year, followed by FCA’s 632,000 and Ford with 443,000. Would Ford come under pressure from a Trump administration, after its clash with Ford?

“We don’t believe the election result will end up being financially more punishing for Ford than for its peers. However, future capacity shifts and product realignment may come under more scrutiny in the near term,” the report said.

Evercore ISI said for Germany, the U.S. is its second biggest export market after Britain, and it sold just over 600,000 cars there last year.

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