VW’s stock price is recovering as reports begin to show a surprising favor toward VW in Western Europe.
Given the research results, Bernstein’s Max Warburton and team have cut their price target to €160 from €200,but are maintaining their outperform rating. “On an underlying basis, we expect a surprisingly limited impact on brand, pricing, volume and profitability (outside of the U.S. market),” the analysts said. “We continue to see VW as a business with significant strengths and attractions and with the potential for structural change and improvement.”
Two-thirds of Germans still believe Volkswagen builds “outstanding” cars, despite a high-profile emissions-test cheating scandal that has damaged its image, a survey found.
Sixty-five percent said they either fully or largely agreed the scandal was overdone and that VW still made excellent cars, according to results of an independent online survey of 1,000 people published on Monday by market research firm Prophet.
Six out of 10 said they did not believe the “Made in Germany” label would be damaged by the scandal in the long term, and 63 percent believed the affair would soon be forgotten.
Those stats indicate both good and bad for VW. Could the worst be behind VW? It’s too early to tell. Dieselgate still has waves that are yet to crash. Certainly VW is hurt, and may give its #1 worldwide car sales position (back) to Toyota.
A wounded, embarrassed VW will fall back, take stock, focus inward, and move forward from the Dieselgate scandal. Right?
Wrong. VW plans to increase its ambitions in the face of disaster. Yes, you read that right.
Our competitors are waiting for us to fall behind technologically, because we are spending all our time focusing on ourselves. But we aren’t going to do them that favour. — new VW chief executive Matthias Mueller
When some companies would crouch to avoid the missiles and barbs of the press, public and governments, according to the BBC, VW is instead redoubling efforts to increase its lead on Toyota in worldwide car sales.
Speaking to 400 top VW managers in Leipzig about how to deal with the enormous costs of the scandal, Mr Mueller made a number of startling announcements:
no brands would be sold off
innovation would be boosted
and overall VW would become more ambitious globally rather than less
What this means in practice is a billion euros (£735m; $1.1bn) in spending cuts annually on the one hand, and more innovation, particularly in electric cars, on the other. Plus a completely new corporate culture which allows more creativity and questioning rather than autocratic top-down decision-making.
Volkswagen will focus on electrics and hybrids following this diesel emissions scandal, turning a gigantic portion of their focus away from a bedrock of Volkswagen’s direction in the last 40 years. There’s even talk that diesel is dead.
And, in the midst of this, I’m launching this site. It’s a sister site to my Volvo DIY forum.
It’ll be interesting to look back at this post in ten or fifteen years and see where VW goes from here.