Volkwagen has a firm foothold in the Chinese market, which is one of the world's most rapidly growing markets, and is continuing to grow there. As of 2008, Volkswagen operates two joint ventures in China, which are respectively the 2nd and 3rd largest car manufacturers in China. This early dominance of the Chinese car market will serve Volkswagen well as incomes in China continue to rise and consumers demand ever more cars.
BMW is currently the world's largest luxury car maker, but Audi, a division of VW, plans to take away this status by 2015. While BMW is targeting a "single-digit percentage" of sales gain, Audi plans to introduce a dozen of new models as a plan to bring the total product lineup to 42 vehicles by 2015. Should this become true, VW's Audi division will bring significant increase to share price.
BMW makes no four cylinder engine vehicles for the US market. Bad decision!
Created when OTC:VLKAY was $34.13 | Edit | History
Audi makes a 2.0 turbo that puts out 211hp., which has an eight speed automatic tiptronic transmission. I own the 2011 A4 Avant, ani have gotten 36.1 mpg on the highway and about 30 overall with city/highway 50/50 mix. The BMW is a fine automobile with a long tradition of driving pleasure, but you can say the same of Audi. I would love the option of a small or medium sized BMW with a high performance four cylinder engine like they offer outside of the US.
Volkswagen announced on 1/20 that it will begin to build a fifth plant in China in Guangzhou, the souther industrial heart of China. The new facility will be able to have an annual production of 200,000 units with possibly an even higher upside. The plant will be able to continue to establish Volkswagen's stronghold in the Chinese market.
Volkswagen is investing heavily in its Audi Group and hopes to rival DAIMLERCHRYSLER AG (DCX) and BMW in the luxury car market. This growing focus on the upscale market is potentially advantageous for two reasons. First, margins on luxury vehicles are much higher than on normal cars, meaning Volkswagen earns more money on every luxury car sold. Second, luxury vehicle sales vary less with economic cycles, as wealthier buyers have a more reliable source of income.
Volkswagen is one of the top providers of diesel vehicles to North America. While diesel engines were traditionally spurned in North America due to their dirty exhaust, newer diesel technology makes these engines burn much cleaner, while still delivering diesel's considerably improved fuel economy. If fuel prices remain high in the long term, Volkswagen's head start with this technology will be advantageous as shoppers try to cut their fuel costs.
Volkswagen is now the largest shareholder of Suzuki; the combination of Volkswagen and Suzuki's auto sales make it the largest in the world, greater than even Toyota. This is set to benefit Volkswagen, as Suzuki's expertise in producing smaller hybrid vehicles will help Volkswagen enter the lucrative Indian automotive market.
