10:49 AM EDT, 09/25/2024 (MT Newswires) -- General Motors ( GM ) and Ford Motor ( F ) shares tumbled on Wednesday morning following downgrades by Morgan Stanley.

Morgan Stanley, which also downgraded Rivian (RIVN), Magna International ( MGA ) and Phinia ( PHIN ) in the same note, said the downgrades were "driven by a combination of international, domestic and strategic factors that we believe may not be fully appreciated by investors."

US inventories are on an upward trend as vehicles remain unaffordable for many households, while less-than-prime consumers continue to record increasing delinquencies and credit losses, Morgan Stanley said. Furthermore, China's two-decade-long "growth engine has not stalled...it has reversed in terms of China profits flipping to losses," the note said.

The downgrades to Ford and General Motors ( GM ) were underpinned by Morgan Stanley's expectation for "greater share loss through end of decade (lower normalized units), price/mix headwinds, China, regulatory compliance" and other risk factors driving lower normalized earnings and valuation.

Shares of General Motors ( GM ) were down 5.5% in recent trading, while Ford was off 4.1%.

Price: 45.46, Change: -2.61, Percent Change: -5.43