Quarta-feira Jul 10 2024 13:57
4 mín
Volkswagen shares declined in early trade on Wednesday after the company issued a profit warning overnight and announced it was considering closing an Audi plant in Brussels.
The automaker has revised its forecast for operating return on sales to a range of 6.5% to 7%, down from the previous 7% to 7.5%.
Volkswagen is contemplating restructuring or potentially shutting down its Audi plant in Brussels, which employs 3,000 people, due to weak demand for the Audi Q8 e-tron, a fully electric model launched in 2019.
Automakers are grappling with declining EV demand, with European brands particularly challenged by a surge of discounted, state-subsidized EVs from China. In response, the EU recently began implementing provisional tariffs on Chinese EV imports.
If Volkswagen presses ahead with the closure, this would be its first factory shutdown in nearly four decades, since closing its Westmoreland plant in Alabama in 1988.
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The potential closure or repurposing of the Brussels site could cost up to 2.6 billion euros ($2.81 billion), impacting Volkswagen’s operating profit for the 2024 fiscal year.
Deutsche Bank analysts described the potential Brussels factory shutdown as a “major step in the right direction,” suggesting that related costs will not immediately affect cash flow.
Analysts at Stifel labeled Audi as “Volkswagen’s biggest problem” and “the biggest concern for investors,” citing delays in new model releases that have left Audi trailing behind Mercedes and BMW.
In a comment cited by CNBC, they said:
“The bigger issue is the severe delay in new models in recent years; Audi has been falling behind Mercedes and BMW. We calculate that the average age of Audi’s portfolio is now six years (BMW: three years, Mercedes 3.6 years)”.
Volkswagen has also suffered a slump in overall deliveries, with the group delivering 2,243,700 vehicles worldwide from April to June, down 3.8% from the same period last year. Audi’s performance contributed to this decline, with deliveries down 11.3% year-on-year for the quarter.
Deliveries to China fell sharply by 19.3% in the second quarter, while deliveries rose by 5.1% in Western Europe and 10.8% in North America.
Volkswagen’s stock was down 1.45% in early trading on Wednesday, with VOW shares on the Xetra exchange appearing to mount a recovery in later hours, gaining 0.7% on the day at €113.20.
Germany’s DAX index — where Volkswagen is a constituent — was also up on the day, rising 0.78% to 18.378.43 after an early-hours decline.
The German automaker will present its second-quarter results on August 1.
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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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