(Bloomberg) -- Carmakers’ woes are turning into one of the global corporate bond market’s biggest pain points, with investors bailing out of the sector’s debt as vehicle sales stall and competition rises.

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The total return of bonds issued by global car companies is on track for its biggest underperformance versus the broader high-grade market since 2019, according to Bloomberg indexes. In Europe, where multiple automakers including Stellantis NV and Volkswagen AG have issued profit warnings, carmaker bonds are set for their biggest underperformance in nearly a decade.

“Every time I see my end-of-day report, autos are weak again,” said Al Cattermole, a portfolio manager focused on credit at Mirabaud Asset Management. He’s been cutting exposure to car company bonds since June after being overweight on the group last year.

The sector has been hit on multiple fronts. In Europe, carmakers have been hurt by weakness in major economies like Germany, as well as slowing sales of their vehicles in China. In the US, car sales fell in the three months to the end of September as high prices and financing costs kept customers home. Stiff competition in electric vehicles and the threat of tariffs in major markets are added headaches.

The underperformance is a problem for the overall high-grade market. A Bloomberg index of global investment grade corporate debt has returned 0.49% since September, with automakers and components the only one of 26 sectors to have had a negative contribution.

And the drag from carmakers is exacerbated by the size of the sector: Autos are the largest non-financial group by face value, according to Bloomberg indexes. That means that when money managers want to reduce their exposure, they sell such a large portion of debt that it can be too high to absorb.

“It’s a big sector with several of the largest issuers. If people want to get underweight, a lot of paper comes out,” said Cattermole.

It’s tough to find buyers. Money managers have the biggest underweight positioning in European auto names in more than five years, according to Bank of America’s latest credit investor survey published this week, while the issues facing the sector have no quick fix.

“Going in to 2025, auto companies will have quite a lot of challenges and require quite a bit of action from companies to tackle,” said Nesche Yazgan, a credit analyst at RBC Bluebay. “On top of the funding cost challenges, you are looking at the ongoing investment in electric vehicles at very significant levels.”