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General Motors’ headquarters office is located in Detroit’s Renaissance Center.
Paul Hennessy | LightRocket | Getty Images
DETROIT — Shares of General Motors and Ford Motor each fell on Monday after a pair of downgrades by UBS citing expectations for weakening demand amid inflationary pressures.
Ford stock fell more than 8% during intraday trading before closing at $11.37 a share, a decline of 6.9%. GM was off as much as 7.5% before closing at $32.29 a share, down 4%.
Both GM and Ford shares are off about 45% year to date. Both companies have a market capitalization of less than $50 billion.
UBS analyst Patrick Hummel wrote in notes to investors on Monday that he expects the US automotive industry to be challenged for the foreseeable future following record profits amid low supplies and high demand. during the coronavirus pandemic.
He predicted that “it will take three to six months for the auto industry to recover from oversupply, ending a 3-year period of unprecedented” pricing power and profit margins for automakers .
The investment firm downgraded Ford to “sell” from “neutral” and GM to “neutral” from “buy.”
UBS continues to favor GM over Ford because of its momentum in electric vehicles and fewer production problems in the third quarter. Hummel said UBS expects a “solid quarter” for GM, which is scheduled to report third-quarter results on Oct. 25.
Last month, Ford said parts shortages affected about 40,000 to 45,000 vehicles, mainly high-margin trucks and SUVs that had not yet reached dealers. Ford also said at the time that it expected to book an extra $1 billion in unexpected supplier costs in the third quarter.
Ford is scheduled to report third-quarter results on Oct. 26.
— by CNBC Michael Bloom contributed to this report.

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