The relationships that the Volkswagen group created with other car manufacturers are of course very important. This will monitor potential partnerships or commercial contracts that can improve the group's growth.
Innovation is of course also a key factor for Volkswagen and its growth and the development of new vehicles and engines will be closely monitored, particularly in the green and autonomous vehicle segment.
It goes without saying that the Volkswagen Group's competition must also be monitored, paying particular attention to the innovations of these companies and the evolution of their respective market shares.
Like all carmakers, Volkswagen's sales depend to a large extent on the price of fuel, and therefore indirectly on the price of oil. You should therefore keep an eye on the price of oil before buying or selling Volkswagen shares.
Finally, we will keep an eye on the laws used to protect the interests of local manufacturers in emerging countries in particular.
Volkswagen is a well known German brand which is the leading company in the European automobile construction sector. Its turnover is generated by numerous activities, principally the sale of vehicles producing 90% of profits, but also the construction, and the supply of financial services such as credits and rentals. More precisely, its turnover is generated as follows:
With no less than 94 production sites, the Volkswagen Company generates its turnover in Europe as well as Pacific Asia, South America and North America.
The price of Volkswagen shares is quoted on the Euronext Amsterdam stock market. It is also integrated into the calculation of the German DAX 40 stock market index and is therefore one of the top 30 assets representing the largest stock market company capitalisations of this country.
Photo credits: Keita Kuroki - Flickr
While it is important to know the Volkswagen group and its activities, you should also know the economic and sectoral environment. Indeed, the news or major announcements of these manufacturers can have a strong influence on all the stocks in the sector and therefore on the Volkswagen share. It is therefore important to take this into account before buying or selling Volkswagen shares. We will now take a closer look at the group's main competitors in the car manufacturing market.
The Toyota Motor Corporation group is of course a major competitor of Volkswagen. It is a Japanese car manufacturer that is one of the leaders in this market in terms of financial performance as well as in terms of the number of vehicles sold and in terms of stock market valuations. The group is also one of the largest companies in the world in terms of market capitalisation.
The Hyundai Group is actually a South Korean conglomerate based on Hyundai Motor. It is also one of the largest car manufacturers in the world in terms of the number of sales each year. It includes several consumer car brands such as Hyndai Motor, Kia Motors and Hyundai Rotem as well as some others.
Also known as General Motors Corporation or GM, this group is an American car manufacturer based in Michigan, Detroit. It currently controls several major car brands. It was founded in 1908 and quickly became the largest car manufacturer in the world, leading the market from 1931 to 2005 and again in 2011. In 2009, after its shares fell by 95%, GM was temporarily nationalised for a year and a half, replacing its debts with equity.
Another major competitor of the Volkswagen Group is the American Ford Group or Ford Motor Company, also known as FMC, which is based in Dearborn, a suburb of Detroit, Michigan. The Ford group was for a long time the second largest manufacturer in the world after General Motors, but in 2004 it became the third largest in the world behind Toyota. It was then overtaken by the Volkswagen Group and fell to fourth place in 2011. It was recently upgraded to fifth place after the PSA/FCA merger created Stellantis. The group employs over 350,000 people worldwide.
The former Renault-Nissan Alliance is an alliance that was created through equal cross-shareholdings between Renault and Nissan. The alliance includes all the vehicle brands of these three major manufacturers and is thus one of the most important names in the industry.
Finally, we must of course also take into account the competition from the Stellantis group. This is a multinational automotive group that was created on 16 January 2021 as a result of the merger between the PSA Group and the Fiat Chrysler Automobiles Group. The new group, called Stellantis, is responsible for the operation and marketing of fourteen different car brands. Five of these brands come from the PSA group
Volkswagen regularly implements strategic partnerships with various automobile sector players and those relating to this sector’s derivatives. Here are details on recent major partnerships of the group:
Volkswagen recently implemented a partnership with Tata in India for the communal development of components for vehicles sold on the continent.
Volkswagen is also partnered with the NVidia semi-conductor manufacturer to develop automatic learning software to ease traffic circulation in the towns and cities.
Finally, Volkswagen has signed a partnership with the LG Group in order to create innovations in the connected driving sector for future vehicles of the group synergising their different skills and specialities.
There’s a reason why so many investors have recently taken interest in Volkswagen stock. As a matter of fact, the German company is blessed with undeniable attributes which are both
future strengths and which allow for a good sense of its upcoming results. In order to convince you, here’s a detailed summary of the asset’s advantages as well as the company’s strengths.
First of all, as we’ve demonstrated, the Volkswagen company has been capable of diversifying its activity as well as its products in order to compensate for periods of decreased demand, unlike most of its competition. Consequently, it is now able to offer a very diverse range of vehicles, thus allowing it to be involved in different markets simultaneously.
Volkswagen is also a company with a strong international presence. Besides owning different brands all over Europe and the world, it sells its vehicles in a great deal of countries. It must be noted that the company benefits from a solid reputation which it has been able to acquire over time, seeing as it is one of the oldest automobile manufacturers in the world.
Thanks to its few high-end and very high-end vehicle brands, Volkswagen also benefits from the luxury market which is subject to very little of the disruption caused by the economic crisis. Its popular sections are therefore more resistant to market fluctuations, even at times of poor economic growth. Volkswagen is also a very well represented brand in the area of motor sports. This allows it to further better its public image, thus increasing sales.
Another one of Volkswagen’s assets involves the distribution of its production throughout the world. The fact that the company owns factories in a number of different countries allows for a better management of its production costs as well as a strong and competitive market positioning. Throughout all of its different factories, Volkswagen currently employs over 350 000 workers.
Concerning Volkswagen’s future opportunities, there’s a myriad of possibilities. There are strong indications that the German company will bring itself closer to foreign manufacturers with whom it could set up profitable future partnerships.
The company also relies on innovation with a continuous research in technological fields of the future such as autonomous vehicles, in-vehicle systems or even green cars. Benefiting from true development capabilities, it could stand out from its competition thanks to practical innovations.
Even if Volkswagen does offer so many advantages to investors, it is essential to also be familiar with its shortcomings before rushing into online trading. Here are a few of its weaknesses as well as threats the company will have to face in the future.
To this day, one of Volkswagen’s biggest weaknesses remains the fact of not being well represented on emerging markets, despite the fact that these are very strong. Even though the brand is one of the leading European companies and is well exported in regions such as North America, it still struggles to establish itself in a ruthless Asian market where competition is very high. This difficulty is accentuated by the restrictive legislation found in some emerging countries like India whose objective is to protect the interests of local manufacturers such as TATA.
The pressure put forth by European governments in regard to ecology of new vehicles is an additional constraint faced by Volkswagen who’s just starting to produce its range of clean automobiles.
Finally, even if Volkswagen’s capacity for innovation is one of its main strengths, its competition will not easily let itself be outdone, forcing the company into a technological race in order to maintain its status as a modern automobile manufacturer.
The latest results published by the Volkswagen Company are for the 2019 financial year. Among the figures that you should bear in mind from this period are the following; the financial result of the group stands at 14,029 million Euros for this year, the PER stands at 3.72 Euros, the dividend was set at 6.53 Euros per share and the return on the year is €26.60 per share. The group’s equity also achieved the amount of €123,651 million.
It is of course on the German market that the Volkswagen share price is quoted. In fact, this company is quoted on the Munich stock market, on the Xetra financial marketplace. We also note that this company’s share price is included in the National German stock market index, the DAX30, and therefore Volkswagen is one of the top 30 German companies relating to stock market capital. You can follow the movements in this share price from this financial market.
It is of course on the German markets and the European markets (excluding Germany) that the Volkswagen Group achieves the most profit with 18.5% and 42.8% of its turnover resulting from these two geographical areas. The other markets successfully penetrated by this company where it markets its vehicles include Pacific Asia from which originates 18.3% of its turnover, North America with 16% of its turnover and South America with 4.4%.
If you want to buy or sell Volkswagen shares, you may want to consider using Contracts for Difference (CFD) brokers. CFD brokers offer online trading platforms that allow you to invest in shares such as Volkswagen through derivative contracts. To get started, choose a regulated and reliable CFD broker. Open an account, deposit funds and access the trading platform. Search for the Volkswagen share in the list of available financial instruments, then place a buy or sell order according to your investment objectives.
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