The share of VW (Vz.) Could not quite keep up with the pace of BMW and Daimler in the past few months. One reason was certainly the above-average drop in sales at Wolfsburg. Sales of VW’s core brand lost around 15 percent in 2020 compared to the previous year. However, there are also glimmers of hope for the car manufacturer.
The Wolfsburg-based group includes nine car and three truck brands. The company covers the mass car market with its own brand VW, Seat and Skoda, and VW serves the luxury segment with Audi, Porsche, Bugatti, Bentley, Lamborghini and Ducati. In the past few years the group has been badly shaken by the diesel scandal and fines. Now a paradigm shift from the combustion engine to the electric motor is imminent. This is where the focus of VW’s Together 2025+ strategy now lies. As part of this corporate strategy, the overall model range is to be significantly reduced and no more pure combustion engines will come off the production line from 2026.
The first fully electric ID.3 rolled off the production line in September and in October and November the ID.3 was one of the best-selling vehicles in Europe. The fully electric Tiguan, ID.4, should hit the streets in Q1 2021. VW plans to invest up to 60 billion euros in electromobility, digitization and autonomous driving by 2024, and by 2029, 75 all-electric models and 60 hybrid vehicles will be on the road across the group.
The investments in the transformation devour billions of euros. In order to keep costs under control, Group leader Diess puts the brakes on costs. With the modular transverse matrix strategy, the group already produces over 40 models with combustion engines. Joint production platforms ensure efficient utilization of production capacities and potential savings in the procurement of components. By 2029, 20 million electric vehicles are to be produced using the Group’s modular electric drive kit (MEB). To secure the electric drive, VW has secured battery deliveries worth 25 billion dollars. In 2019, VW also forged a joint venture with the Norwegian battery manufacturer Northvolt. The production of battery cells in Salzgitter is scheduled to begin in 2024.
The federal government has a large amount of funding available for e-cars. However, it is primarily foreign manufacturers that are currently benefiting from this. With the ID.3, VW could now also benefit from the funding. That is also urgently needed. The corona crisis left deep marks on car manufacturers like VW. With a PER of 17.9 and a dividend yield of 1.7 percent (source: Thomson Reuters), the paper is valued moderately. According to Thomson Reuters, the majority of analysts still see potential in the medium term. Nevertheless, investors should expect setbacks. A general market weakness and a sluggish recovery in auto sales could depress the share price. .
Chart technical outlook: VW (Vz.)
Resistance marks: 157 / 173.80 EUR
Support stamps: 124.70 / 140 EUR
The share of VW (Vz.) Has been hovering between EUR 124.70 and EUR 157 since mid-May. The share is currently heading for the support level of EUR 140 and thus the middle of the corridor. As long as the share does not fall below the EUR 140 mark, there is a chance of a countermovement up to the upper limit of the corridor.
VW (Vz.) in EUR; Daily chart (1 candle = 1 day)
Observation period: May 8th, 2020 – January 12th, 2021. Historical considerations are not reliable indicators for future developments. Source: tradingdesk.onemarkets.de
VW (Vz.) in EUR; Weekly chart (1 candle = 1 week)
Observation period: January 13, 2015 – January 12, 2021. Historical considerations are not reliable indicators for future developments. Source: onemarkets.tradingdesk.de
Bonus cap certificates on VW shares (Vz.) for speculation that the stock will move sideways or moderately upwards
|Underlying||WKN||Selling price in EUR||Barrier in EUR||Cap (upper price limit) in EUR||Final valuation day|
Source: HypoVereinsbank onemarkets; As of: 01/12/2021; 4:08 pm
Reverse convertible bond Protect on the share of VW (Vz.) for speculation that the stock will move sideways
|Underlying||WKN||Issue price in EUR||Barrier in EUR||interest rate||Repayment date|
|VW (Vz.)||HVB514 *||100% of face value||75% **||7.6%||02/09/2022|
* In subscription until 04.02.2021 (subject to early closure); ** of the Reference Price on the Initial Observation Day; Source: HypoVereinsbank onemarkets; As of: 01/12/2021; 4:09 pm
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The contribution VW – drivers get on with the ID.3! first appeared on onemarkets blog (HypoVereinsbank – UniCredit Bank AG).
Author: Richard Pfadenhauer