Car towers of the Volkswagen Autostadt in Wolfsburg
The analysts at UBS see Volkswagen particularly at risk from competition from China.
(Photo: dpa)
Volkswagen shares recovered on Monday from the significant price losses on Friday. VW’s preferred share, which is listed in the Dax, is up around 0.5 percent after trading on Friday with a minus of 4.2 percent.
Around the German stock market, the already subdued mood in the auto sector had deteriorated further at the end of the week. The triggers were concerns from analysts at Swiss bank UBS and price cuts from Tesla.
The US electric car manufacturer reduced the prices for models in the growth market in China, putting further pressure on the competition from Europe. The experts at UBS also fear increased competition from Chinese electric vehicle manufacturers: “We assume that two-thirds of the global automotive market can be addressed by a concentrated group of Chinese electric car manufacturers.”
In her opinion, this would hit the mass manufacturer Volkswagen particularly hard. They downgraded the shares – as well as those of the French manufacturer Renault – to “sell” and lowered their price target to 100 euros. On Friday it closed at EUR 108.32.
UBS analyst Patrick Hummel writes in his study: “As the former number one in China, the company is potentially on the way to marginalization and as number one in Europe, it will probably be hit hardest in the longer term by the highly competitive Chinese electric cars.”
He therefore revised his initially positive assessment. VW no longer has a “first mover advantage” with e-vehicles and is also falling short of expectations when it comes to implementation in key areas.
With the recent management changes and strategic measures, VW is tackling the obvious challenges. “But we think it’s unlikely that VW can weather the upcoming Chinese push without negatively impacting earnings,” Hummel writes.
At the IAA auto show in Munich, VW announced on Monday that it would be launching cheaper electric cars at entry-level prices of less than 25,000 euros in two years. From 2025, the further developed MEB+ platform will offer ten percent more range and efficiency. Models from Volkswagen, Skoda and Cupra should be able to charge their batteries in less than 20 minutes.
More: How BYD & Co. stir up German automakers
First publication: 09/01/2023, 17:56 (last updated: 09/04/2023, 12:05.)