CO2 Cloud Hangs Over European Carmakers

European automakers will take a hit on capital markets if the European Union imposes strict limits on cars’ carbon dioxide (CO2) emissions as a way to help curb global warming.

The earnings drag from stepped-up spending to curtail greenhouse gases and the sales impact from higher prices for almost all new cars would provide a double whammy that analysts agree has not been priced into the market.
“It will kill the European automotive industry,” ACEA President Sergio Marchionne, who is chief executive of Fiat, told reporters on Wednesday. The group says that money could be better spent on more effective ways to cut emissions.

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