General presentation of the Volkswagen Company:
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:
- Nearly 90% of Volkswagen’s turnover is from the sale of vehicles to individuals and businesses under the brand names Volkswagen, Skoda, Bentley, Audi, Seat, Porsche, Scania and MAN.
- The rest of its turnover is derived from financial services such as vehicle financing with rentals, leasing and insurance products.
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 major competitors of Volkswagen:
The Volkswagen group is active in the mainstream automobile sector. It therefore faces strong competition from other automobile manufacturers in Europe and worldwide. Here we provide information on the major competitors of this German automobile manufacturer to assist you in analysing this company’s share price on the stock markets and trading in it effectively online.
On the international level, the prominent competitor of Volkswagen is still the Japanese manufacturing company Toyota who passed into second place after Volkswagen in 2016. Volkswagen is therefore the world leader of this sector with annual growth currently standing at 3.8% with over 10.3 million vehicles against 10.18 million vehicles and an annual growth rate of only 0.2% for Toyota.
Among the major competitors of this brand we can note the following companies:
- Tata Motors
In Europe, its major competitors are PSA and Renault.
The major partners of Volkswagen:
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.
Different activities and brands owned by Volkswagen:
As briefly mentioned above, Volkswagen doesn’t solely produce vehicles of its own brand. It also possesses various different brands, either wholly or through shareholding. In order to have a better grasp of the German company’s scope of activities, here is a list of brands which are directly attached to it.
- The Volkswagen brand: Obviously, this is the company’s main brand. To this day, the automobile manufacturer is still based in Germany.
- The Audi brand: This company used to belong to the Auto-Union which included the Audi, NSU, Horch and DKW brands. Nowadays, only Audi remains represented by this brand which Volkswagen acquired in 1964. This brand is also based in Germany.
- The Seat brand: It has belonged to Volkswagen since 1986 and is based in Spain.
- The Skoda brand: The brand was taken over by Volkswagen in 1991 and is based in the Czech Republic.
- The Buggati brand: This brand was taken over by Volkswagen in 1998 and is based in France. It offers a range of sports cars as well as luxury vehicles.
- The Lamborghini brand: Also owned by Volkswagen since 1998, Lamborghini is based in Italy and offers sports cars primarily.
- The Bentley brand: This brand of great luxury cars was bought by Volkswagen in 1999 and is based in the United Kingdom.
- The Volkswagen Nutzfahrzeuge branch specialises in utility vehicles. It is based in Germany.
- The MAN brand: Since 2012, the Volkswagen brand holds 71.1% of the brand’s shares which is based in Germany and specialises in the production of heavy goods vehicles.
- The Ducati brand: this motorcycle brand based in Italy was taken over by Volkswagen in 2012.
- The Porsche brand: Owned by Volkswagen since 2012 as a result of an increase in principal amount in 2008, the Porsche brand is to this day still based in Germany and offers primarily high-end sports cars.
- The Scania brand: This heavy goods vehicle brand based in Sweden was taken over by Volkswagen in 2014.
In view of the different brands that make up the Volkswagen automobile company, it is easier to understand the diversity of vehicles which it has to offer, from small passenger vehicles to heavy goods vehicles, two-wheelers and even luxury and sports cars. It is worth noting that Volkswagen isn’t only a diversified automobile manufacturer, but that it also offers other services such as financing and insurance and also engages in the manufacturing of engines destined for the industry or navigation.
Introduction and quote of Volkswagen shares:
The price of Volkswagen shares is quoted on the Euronext Amsterdam stock market. It is also integrated into the calculation of the German DAX 30 stock market index and is therefore one of the top 30 assets representing the largest stock market company capitalisations of this country.
To achieve a correct analysis of the Volkswagen share price you should of course favour innovations and information on new releases in terms of vehicles. However, the historical analysis of this price shows that this asset has been following a rising curve over the last few years. We can actually observe a strong rising trend with a peak in November 2008 that was followed by a technical correction.
Important stock market data about the Volkswagen shares:
Now that you know more details relating to the Volkswagen share price movements over the latter years it is also important to know other, more general data that is just as significant such as the following:
- In 2017 the Volkswagen Group posted a total stock market capital of around €69,774 million.
- The number of shares issued by this company and in circulation on the stock markets is around 295,089,818.
- The Volkswagen share price is actually quoted on the ‘Traded but not Listed’ market of Euronext Amsterdam.
- The Volkswagen Group share price is included in the composition of the national German stock market index, the DAX 30.
- Shareholdings in the Volkswagen Company are as follows: 30.80% by Porsche Automobile Holdings, 21.10% by foreign institutional investors, 19.40% by other types of shareholders, 14.60% by Qatar Holdings and 11% by Land Niedersachsen.
Financial and economic history of the Volkswagen Company:
In order to better understand what has influenced the Volkswagen share price movements over the latter years here we provide a recent financial and economic history of the group.
- In 2011 Volkswagen gained control of PGA Motors. It also announced its arrival in WRC.
- In 2013, the group became the most innovative company worldwide with 11.4 billion dollars dedicated to research and development.
- In 2015 China permitted an increase in Volkswagen’s shareholding in its collaboration with FAW from 40% to 50%. This was also the beginning of the ‘Volkswagen affair’ that caused many problems for the brand due to the use of fraudulent software for reducing pollutant emissions from the vehicles.
- In 2016 Volkswagen signed an agreement with the American authorities to cease the pursuit of 15 billion dollars. The group then announced the purchase of a 16.6% shareholding in Navistar for 256 million dollars with a supply contract. In the same year, the group announced the closing of 30,000 jobs before 2020, the majority in Germany, through early retirement. It also however created nearly 9,000 jobs in the production of electric vehicles.
- Still in 2016, Volkswagen became the primary automobile constructor in the world, ahead of Toyota, due to their holdings in the brands Audi, Porsche, Seat, Skoda, and Bentley. Despite preceding lawsuits that affected the group, it managed to achieve sales of over 10 million vehicles.
- 2017 signalled the end of the family shareholding in Volkswagen with the exit of Ferdinand Pïech who sold his shares.
With this information you can better understand the events that have influenced the trends in the Volkswagen share price and thereby better anticipate future movements through fundamental analysis.
What are the advantages of Volkswagen stock as an asset?
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.
The disadvantages of Volkswagen stock as an asset:
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.