Volkswagen has been removed from the Euro Stoxx 50 for the first time in 15 years, marking a major blow to the crisis-hit German carmaker. The Wolfsburg-based company's shares have fallen more than three-quarters from their 2021 peak to about a 16-year low, prompting the index reshuffle by provider Stoxx. The departure highlights challenges facing Europe's auto sector, including competition from lower-cost Chinese rivals and skepticism over VW's restructuring plan involving 100,000 job cuts.

"The whole sector is depressed given the seemingly existential risks it is facing," said Michael Tyndall, senior global autos analyst at HSBC. Analysts warn that VW's removal could further depress its share price as exchange traded funds tracking the index sell their stakes. Stoxx reports 30 ETFs with a combined value of €59bn replicate the Euro Stoxx 50, along with over 110,000 structured products.

VW stated that index inclusion does not alter fundamental strength and that the group remains an attractive investment despite the automotive industry's most significant transformation. The company recently announced a surprise deal with unions to slim down operations, though shares fell 8.3% after a profit warning citing a €6bn writedown on its Porsche stake and continued downturn in China.

Replacements include Nokia and French utility Engie, while Ferrari, BMW, and Mercedes-Benz remain the only car stocks in the index.