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Investing.com -- Goldman Sachs said Europe’s premium automakers Mercedes-Benz and BMW remain its preferred picks as the sector contends with tighter CO₂ rules, falling share in China’s electric-vehicle market and rising tariff exposure.
The brokerage said both manufacturers benefit from stronger balance sheets, product-cycle support and more flexibility to shift production across regions.
Goldman Sachs said emissions compliance remains less challenging for premium brands than for mass-market peers.
BMW is expected to meet its 2025-27 targets under the EU’s three-year averaging mechanism, supported by higher battery-electric vehicle penetration.
The brokerage said concerns about German automakers’ falling Chinese market share overlook that most of the loss is concentrated in the BEV segment, where domestic manufacturers have moved faster.
Mercedes, BMW and Volkswagen have improved their pure-ICE market shares over the past five years.
Premium brands have lost about 0.5 percentage points of total market share since 2019, compared with a 5-point drop for Volkswagen and an 8-point fall for Japanese OEMs.
Goldman Sachs said upcoming platform launches at both Mercedes and BMW could lift competitiveness.
Mercedes’ MMA and MB.EA architectures are expected to cut battery costs by about 30% per kWh, while BMW’s Neue Klasse, featuring Gen6 eDrive and cylindrical cells, targets a 30% increase in range, 30% faster charging and a 20% reduction in manufacturing costs.
The analysts noted that Mercedes, BMW and Renault continue to hold strong net cash and financing-unit equity positions even as core auto valuations have weakened sharply over the past decade.
Goldman Sachs said implied enterprise values for BMW, Mercedes and Renault’s core auto operations are now negative.
The brokerage said it views Mercedes, BMW and Renault as better positioned than other European automakers across key sector risks, with the premium brands benefiting from strong product pipelines and solid cash generation.