Pondering Whether to Offload Car Shares in Companies Such as BMW and Volkswagen Following the Market Slump?
In the ever-evolving world of automotive manufacturing, German automakers are currently navigating a turbulent period. This week, both Volkswagen and BMW have reported significant losses, with investors remaining cautious in the current market environment.
Initially, reports suggest that faulty braking systems from supplier Continental are to blame, leading to recalls and delivery stops for 1.5 million vehicles. This issue has not only affected Volkswagen but has also triggered a downward spiral among German automakers. BMW's stock lost more than 11% by the end of Tuesday, hitting its lowest point in years and landing at the bottom of the DAX rankings. Other German automakers, such as Mercedes-Benz, Porsche, and Volkswagen, followed with daily losses ranging from just under three to just under five percent.
Volkswagen, with its strong brand and substantial cash reserves, is unlikely to stop selling cars overnight. However, the company recently announced extensive cost-cutting measures and formally terminated the employment security that had been in place since 1994. The managing editor-in-chief, Mr. Frank Poepsel, has directly and indirectly acquired positions in Volkswagen Vz (Conflict of Interest Disclosure).
In the first half of the year, VW reported a 14% decrease in surplus, BMW nearly 15%, and Mercedes-Benz almost 16%. Stocks like VW are currently trading at around 3 times earnings. Until then, investors will need to be patient.
The German auto industry is grappling with a difficult transformation process due to the mobility shift and other geopolitical factors. Volkswagen will need to show a turnaround with new models like the recently delayed Trinity car.
Despite the challenges, experts like DZ Bank still see strategic competitive advantages for BMW in the area of electric mobility at a favourable valuation. Analysts' price targets for German auto stocks are now quite conservative. Current analyst price targets for BMW and Volkswagen shares are not specified in the provided search results. However, BMW shares were noted as weaker in recent trading after cautious management comments on Q3, without specific price targets. No direct analyst price targets for BMW, VW, or similar auto stocks are currently available.
As the industry continues to evolve, it remains to be seen how these giants of the automotive world will navigate the challenges ahead and emerge stronger on the other side.
