In a new report, Credit Suisse analyst Dan Galves discussed struggling auto stocks. Despite a record-setting 2015, Credit Suisse is projecting flat SAAR for the auto industry this year.

Galves explains that in the near-term, “Sentiment remains very poor, with Buyside seeing negative risk/reward with high conviction.” He added that he currently sees “limited upside if volumes come in better-than-expected… and little valuation support if US volumes turn downward and/or global macro worsens.”

Luxury brands endured particularly harsh gross margin pressures in Q4. Galves also notes that much of the luxury weakness is centered on German brands, including Audi, BMW and Mercedes.

Not surprisingly, China was…

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