Volkswagen's Core Auto Sale Reaches Record High In 2017

Per Reuters, Volkswagen (DE:VOWG_p) AG’s (OTC:VLKAY) core auto division has achieved record-high sales in 2017, primarily on higher demand for the company’s major brand models in the American and Chinese market, which collectively offset the sales decline in the Western Europe market.

Worldwide sales volume of Volkswagen brand cars rose 4.2% to 6.23 million units, aided by its extended array of sport-utility vehicle (SUVs) models, including the company’s new Atlas and Teramont models.

Talking about the regional sales volume in 2017, China’s vehicle sales witnessed a rise of 5.9% to 3.18 million cars. While in the United States, Volkswagen sales expanded 5.2% to 339,700 units. However, the company experienced a drop of 2.5% to 1.43 million cars in its western European market as an after-effect of its diesel emission scandal.

Volkswagen AG Price and Consensus

All these figures suggest that Volkswagen’s emission test-cheating scandal of September 2015 has hardly been able to damage the company’s brand value.

Good news is that the company projects an optimistic 2018 on the back of positive economic forecasts and its plans to develop new models. On a similar note, IHS Markit expects Volkswagen to restore its profits riding on its turnaround plan for the company’s brand.

Per IHS Markit, deliveries of the Volkswagen brand’s passenger cars and light commercial vehicles are estimated to gain 14.6% to 7.75 million units by 2025 in comparison to 6.76 million cars sold in 2017.

Price Performance

Shares of Volkswagen have rallied 25.6% in the last three months, outperforming the 14.4% rise of the industry it belongs to.

Zacks Rank & Other Key Picks

Volkswagen has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the auto space are Ford Motor Company (NYSE:F) , Lear Corporation (NYSE:LEA) and Fiat Chrysler Automobiles N.V. (NYSE:F) , all carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected long-term growth rate of 10.7%. In the last three months, shares of the company have climbed 10.5%.

Lear has an expected long-term growth rate of 7.1%. In the last three months, shares of the company have gained 9%.

Fiat Chrysler has an expected long-term growth rate of 19.1%. Shares of the company have surged 32.3% in the last three months.

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