According to the Auto News Network, the Volkswagen Group's share price finally returned to its position two years ago before the exhaust scandal of diesel engines. Since its record low in October 2015, the company’s market value has now exceeded 35 billion euros (about 40 billion U.S. dollars) again. Volkswagen has stood up to the scandal that caused the above scandals. The outside world is no longer worried that Volkswagen's diesel cars cannot be sold. Although the repair of about 11 million cars resulted in huge cash outflows, the remarkable ability that Volkswagen subsequently demonstrated is impressive. The common idea that Volkswagen’s management, the Porsche-Pieshi family, and the company’s labor representatives had once had is that Volkswagen is fixed and does not need to change. But this is actually a mistake and put the company at risk. Investors may still remember that Volkswagen’s share price has started to fall before the diesel engine exhaust scandal broke out. If there is no scandal The public should ask themselves, if not for the diesel engine exhaust scandal, what the company can do to further increase its stock market valuation. At current levels, Volkswagen’s profits in the seven years will be equivalent to current stock valuations. The public is very fortunate: consumers are still buying their cars. They seem to forgive the public's mistakes in diesel engine exhaust emissions scandals. So far this year, Volkswagen’s car sales have increased by 2.4%, of which the demand in the United States has tripled. This is due in part to the launch of the new SUV. In the European market, sales of diesel vehicles are slowly declining. According to Bloomberg data, the company is expected to make a profit of 11 billion euros this year and realize sales of 230 billion euros. Although the diesel engine exhaust scandal caused the company to consume about 17.5 billion euros in cash flow, the Volkswagen's automotive division still had a net cash flow of 25 billion euros at the end of September. As Bernstein analysts have pointed out, this scandal never seems to have happened. But if the public does not cheat, it may now have more than 40 billion euros of net cash and return most of the cash to shareholders. The hope of raising dividends Investors have renewed interest in Volkswagen stocks again, reflecting the hope that people will raise their dividends. Volkswagen is very embarrassing in this regard, and they are more inclined to spend money on factories and research - even if this does not expand their profit margins. There is evidence that this type of spending is decreasing. In the first nine months of this year, VW’s spending on capital and research and development costs all declined slightly. Upgrading dividends will further limit the scale of such spending. Volkswagen said that the company hopes to increase its payout ratio to 30%, compared with 20% last year, but it is still uncertain when this increase will be realized. Some of the warnings here are understandable because Volkswagen announced a €2.5 billion in September spending to repair diesel-engined vehicles. It is still not yet possible to rule out more accidental bills in the future. And the development of electric vehicles will also pay a high price. In any case, investors who are eager for revenue hope that the public will increase their dividends. Other car manufacturers are more generous to investors, such as Daimler’s payout rate has reached 40%. For mass investors, the rationalization of the very different brands of this automaker will be the most important measure. For example, there is a view that if Porsche can IPO, its market value will exceed the entire Volkswagen Group. Under the pressure of labor representatives, Volkswagen has begun to delay asset disposal and spin-off. The union opposed the splitting of the low-yielding Ducati motorcycle brand. This should be a warning signal. Even if the public created a miracle of recovery after the outbreak of the diesel engine exhaust fraud scandal, this car maker still needs to take more steps. Forged Sleeve,Forging Steel Sleeve,Sleeve Forging,Cold Forged Sleeve Suzhou SNK Machinery Equipment Co.,LTD , https://www.snkforging.com
October 01, 2024