In key news on German stocks, Volkswagen AG (DE:VOW) released its Q1 deliveries data, with growth boosted by China while Europe lagged in performance. The total deliveries for the quarter jumped by 3% year-over-year to 2.10 million vehicles, with China and South America registering growth rates of 8% and 14%, respectively. In China, all-electric models experienced notable growth, with a remarkable 91% increase to 41,000 units. Conversely, European markets showed weakness, with total deliveries decreasing by 0.3% and electric vehicle (EV) sales declining by 24% in the region.
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Volkswagen shares were down by 0.41% on Wednesday. Year-to-date, VOW stock has gained 24%.
Volkswagen (VW) is a luxury car manufacturer, owning brands like Volkswagen, Skoda, Audi, Bentley, Ducati, Lamborghini, and others in its portfolio.
VW’s China EV Sales Shine, Europe Disappoints
Volkswagen’s remarkable growth in China was primarily fueled by price reductions. In a country characterized by intense competition and price wars, Volkswagen managed to maintain its market share and achieve growth through its sustainable pricing model.
Volkswagen faces stiff competition in China from local rivals, such as BYD Co. Limited (HK:1211) and U.S. giants like Tesla (NASDAQ:TSLA). According to the China Passenger Car Association (CPCA), BYD secured the top position as the best-selling EV brand in China in March, displacing Tesla.
For Volkswagen, the backdrop in Europe was less positive, as it experienced a notable decline in EV sales due to reduced demand in the region. In Germany, the company’s home market, EV demand was impacted as the government scaled back subsidies and is reconsidering its ambitious electrification targets.
Moving forward, VW is optimistic about the high order intake for its electric models in Europe. In Q1, the company’s orders for battery electric vehicles (BEV) more than doubled compared to the same period last year, increasing by 154%. As a result, the BEV order backlog currently stands at around 160,000 vehicles.
Is Volkswagen a Good Stock to Buy?
According to TipRanks’ consensus, VOW stock has received a Moderate Buy rating based on recommendations from 10 analysts. This includes five Buy, three Hold, and two Sell recommendations. The Volkswagen share price forecast is €131.56, which is 10.6% below the current price level.
