Volkswagen facing recession fears 🚗

Today Volkswagen (VOW.1DE) shares fall is effect of special dividend ex-date in amount of 19,06 EUR for Porsche IPO shares. But the company still expects 2023 to be an even tougher year for it than 2022:

• According to Volkswagen CFO Arno Antilitz, inflation and worsening economic conditions will hit demand for new cars. The Volkswagen Group on December 15 unveiled plans for a major strategic restructuring under the leadership of new CEO Oliver Blume. In order to ensure "closer cooperation" between the three major brands, Volkswagen. Audi and Porsche are to take on new areas of responsibility within a revised business structure, which the group says will ensure "clearer prioritization and faster implementation of change." Starting in 2023, the VW brand will be responsible for production and procurement, Audi will position itself as a sales and quality leader, while Porsche will lead development and design.
• The decision to position the VW, Audi and Porsche brands as key drivers of the Volkswagen Group's business operations follows the announcement of a 10-point plan to strengthen the brands over the long term. As part of the plan, the Volkswagen Group reported that "clear improvements in product substance, quality and design are to be achieved in future years."

Volkswagen Australia has confirmed the introduction of the ID.3, ID.4 and ID.5 electric car models for Australia, but the premium version of the ID Aero is still in question. The manufacturer indicated that the model is still missing from the list for introduction. This is despite the fact that Volkswagen has previously commented that it plans to offer a premium-mid-range electric vehicle worldwide. The Aero model is ultimately expected to be larger than the Passat and the Arteon. Investors are still unable to estimate revenue from the new model. Volkswagen recently reported that it expects demand for electric cars to slow down in an environment of more expensive electricity. This outlook, in turn, calls into question revenue from the ID Buzz and ID Buzz Cargo models, i.e. electric delivery vehicles, which were expected to contribute significantly to the group's revenue. The corporation also announced the postponement of the construction of a car battery gigafactory in Eastern Europe. The locations under consideration were Poland, the Czech Republic, Slovakia and Hungary. Despite the postponement, Volkswagen said that implementation of the plan remains a matter of time.

Volkswagen shares (VOW1.DE), W1 interval. The shares of Germany's largest automaker are performing sharply weaker than the DAX index (yellow chart) amid an expected recession in Europe and the ECB's increasingly restrictive monetary policy. Investors estimate that higher interest rates affecting borrowing and interest costs will effectively curb demand for new cars, while rising energy prices will impinge on the consumption of electric cars, as also reported by the automaker itself. The stock has erased the euphoric gains begun in 2021 and is again trading at 2020 levels. If the crisis in Europe worsens and the ECB turns out to be at least as hawkish as Christine Lagarde suggested at the previous conference, and De Guindos today, the bears may want to push Volkswagen shares back to levels from the'pandemic hole', around €95 per share. The stock has dived sharply below the 200-session moving average (red line). The stock's fundamental indicators may attract the attention of investors relying on funamental analysis. The P/B ratio is 0.53, the P/E ratio is around 5. On the other hand, however, the PEG ratio, which is supposed to indicate the trade-off between share price, expected growth and generated earnings per share, is above 4 points, signaling that the market may still overestimate Volkswagen's growth momentum in an environment of weaker economic conditions. Source: xStation5