Yahoo Finance Volkswagen (VLKAY) Aims to Expand in Brazil with First SUV
Per Reuters, Volkswagen AG VLKAY announced the plan to manufacture its first compact sport utility vehicle (SUV), T-Cross, in Brazil. With this recent development, the company hopes to recover the market shares in the Latin American region.
Anticipated to hit the market by the first-half of 2019, Volkswagen announced the plans to invest $595 million (R$ 2 billion) for the production of T-Cross at its Sao Jose dos Pinhais facility, situated in southern Brazil. Further, it added that this investment is a part of the R$7 billion planned investment through 2020. The investment is intended to facilitate Volkswagen in reviving its product lineup in Brazil.
Over the last 10 years, Volkswagen’s shares in the Brazilian auto market contracted amid recession and opening of local factories by new entrants. However, recent low interest rates and last year’s export-driven rebound in the sector revived hopes for a few auto manufacturers.
Volkswagen AG Price and Consensus
Volkswagen AG Price and Consensus | Volkswagen AG Quote
On the contrary, another major automaker Honda Motor Co., Ltd. HMC recently reported that it will shift vehicle production from the Sumare facility to the existing Itirapina plant, where the Sumare hub will be used for engine production.
Earlier in this decade, Honda planned to double its production capacity in Brazil through the new Itirapina plant to cater the growing demand. However, the economic crisis led to change of plans for the company. Per management, while the Brazilian market revived after the recession, the growth outlook was below the previously forecasted volumes.
Price Performance
In the last three months, shares of Volkswagen modestly underperformed the industry it belongs to. During the period, its stock fell 6% in comparison with the industry’s decline of 5.2%.
Zacks Rank & Key Picks
Volkswagen carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are Tenneco Inc. TEN and Spartan Motors, Inc. SPAR, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tenneco has expected long-term growth rate of 13.5%. Over a month, shares of the company rose 3%.
Spartan Motors has expected long-term growth rate of 15%. In the last six months, shares of the company gained 36.8%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
Volkswagen AG (VLKAY) : Free Stock Analysis Report
Tenneco Inc. (TEN) : Free Stock Analysis Report
Spartan Motors, Inc. (SPAR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
