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Volkswagen (VLKAY) to Introduce 2 New Models Every Year

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In its bid to recover from the emissions cheating scandal, Volkswagen AG has planned to offer two new models every year, catering to the U.S. market in the foreseeable future, per an Associated Press report. In order to entice new customers, the German automaker also intends to double the length of warranties.

Volkswagen is encountering emissions-related problems. The automaker agreed to pay over $20 billion in fines and civil settlements related to the scandal. However, per Autodata Corp, so far this year, Volkswagen brand’s sales in the United States increased 6.4%, while the U.S. market was down 2.7%. This rise in sales in the United States can be attributed to the launch of two new SUVs. Also, the automaker has plans of introducing a new Jetta compact car and a new midsize luxury car for the 2019 model year.

Recently, the German auto major announced that it will also be investing more than 20 billion euros ($24 billion) in zero-emission vehicles by 2030 to create mass market. The company plans to offer 80 new electric cars across its different groups by 2025, up from its earlier goal of 30 (read more: Volkswagen Joins Electric Car Race in a Big Way).
 
In the last three months, shares of Volkswagen have underperformed the industry it belongs to. The company’s shares have increased 8.4%, whereas the industry grew 12.6%.


Volkswagen currently carries a Zacks Rank #2 (Buy).

A few other top-ranked companies in the auto space are Toyota Motor Corporation (TM - Free Report) , Allison Holdings, Inc. (ALSN - Free Report) and Daimler AG . While both Toyota and Allison Holdings sport a Zacks Rank #1 (Strong Buy), Daimler holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Toyota has an expected long-term earnings growth rate of 7%.

Allison Holdings has an expected long-term earnings growth rate of 10%.

Daimler has an expected long-term earnings growth rate of 2.8%.

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