I'm sure many have been watching the meltdown. The Volkswagen emissions scandal has widened even further (details here). Volkswagen's stock is tanking (details here). Thoughts on this one? Will VW survive? What will it do to the rest of the European economy?
It is hard to tell if Volkswagen can survive the recall of 400,000 cars due to emission problems. But what gets me is how did that happen to a German car? From what I know, German made products are one of the best, if not the best, so I did not take that news seriously at first. But it is already a fact and that Volkswagen meltdown is also melting the economy of Germany. And as predicted by analysts, it may also pull down the European economy.
Volkswagen will bounce back up but this is a long term view. They won't be bouncing up any time soon I believe. However for someone who wants to make some good cash off this scandal, buy Volkswagen stocks when they hit rock bottom prices. Hold and wait patiently. Eventually you'll reap the reward$.
I don't know what's more unbelievable, the fact that Volkswagen did this in the first place or that they thought they'd be able to get away with it. As far as the long term effect I doubt it will have to much of an impact and if there is an opportunity to buy now, I'm not sure if it would be any more value than it would have been before all this broke. Volkswagen are pretty strong and always have been and I can't see that changes anytime soon, even with this happening.
I think no one saw this coming, from a huge company like Volkswager, cheating in the US market is their death. What they thought be earning will now loose double or more.
I don't think it will be the "death" of them. Speaking as someone who is from outside of the U.S., there hasn't been a whole lot of noise being made about it. In my view this is definitely a brand that can bounce back. Many major companies have been able to bounce back from hectic scandals, and some have had to bounce back from several scandals. I personally view this as the opportune time to buy some shares in the group after the large drop. Who knows, maybe it's just my loyalty speaking as an Audi driver, but looking at their current investments into R&D and the developments in the pipeline, I can't see this as being the end of the company.
There may be more noise afoot on the diesel pollution trickery as the investigation continues. In the related thread http://www.bullmarketboard.com/threads/6083-German-stock-underperforms-because-of-Volkswagen I wrote this 12 hours ago: "From Bloomberg's live Trending Markets show on the air as I write this, VW contagion has now spread to China, 2 recalls reported today, and Japan. 11 mil VW vehicles are affected. The VW Board of Directors are expected to meet on Wednesday. Catch a falling star, err, knife." Corollary stories last night suggested (1) other vehicle manufacturers may have their diesel-powered autos under scrutiny and (2) there may be an impetus to further development of electric-powered vehicles. If either of these ideas play out, it will take time. I would think it will take VW a fair amount of time to figure out the extent of who did what when. Meanwhile I wouldn't be surprised to see some upper level management heads soon be offered up as a peace offering in an attempt to tamp down the bad publicity.
This story popped up within minutes of the previous post. There has been a resignation at the top of VW. http://www.bloomberg.com/news/artic...-winterkorn-steps-down-over-emissions-scandal "Volkswagen AG Chief Executive Officer Martin Winterkorn stepped down after nearly a decade at the helm as the automaker became increasingly isolated amid a scandal overcheating on U.S. emissions tests."
It is not too surprising Winterkorn bailed. He claims he wasn't aware of the emissions shenanigans. While I'm very skeptical of that claim, if true, he wasn't exactly running a tight ship. Beyond that, it is pretty clear the fallout has just begun. Lawsuits, criminal investigations, fines, etc., are all coming VW's way. It isn't going to be pretty.
I'm waiting for a bit of calm with all this. I wouldn't be jumping into VW right now. Goodness knows the scale of potential litigation (I know they are provisioning for it but that doesn't mean it will end with that). At least it's not to do with falsifying data relating to safety (as far as we know right now). More interesting though will be other names in the sector that were dragged down by this. That's where the value is, assuming that they can prove they didn't falsify anything.
