Volkswagen AG (VWAGY - Free Report) recently announced plans to invest more than €4 billion ($4.43 billion) in China in 2020, with around 40% of it to be spent on the development of e-mobility. The company intends to invest the amount in production, infrastructure, development and research of EVs, in sync with its e-mobility growth strategy.
Volkswagen aims to significantly increase EV production in China in 2020 to meet sustainability targets to become net-carbon neutral by 2050.
It aims to sharpen its electrification strategy with the production of all EV, based on the Modular Electric Drive Matrix (MEB) platform in Foshan and Shanghai. The MEB production is likely to begin in October 2020, with a capacity of 600,000 EVs per year.
Apart from e-mobility, the company looks forward to developing new mobility solutions and making improvements in smart cities and autonomous driving in 2020. By 2025, it plans to achieve 1.5 million EV sales with 30 different EV models.
Further, Volkswagen unveiled its first luxury minivan (MPV), Viloran MPV, in China, which is expected to roll out in the first half of 2020. The latest model is built on the Modular Transverse Matrix (MQB) platform, with a 2.0-liter EA888 turbocharged four-cylinder engine.
By October, Volkswagen achieved total cumulative sales of more than 42 million vehicles in China. It declared to have sold around 3.34 million vehicles in the year and increased its market share to 19.5% from 18.5% in 2018.
Zacks Rank & Stocks to Consider
Currently, Volkswagen carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. (SPAR - Free Report) , SPX Corporation (SPXC - Free Report) and BRP Inc. (DOOO - Free Report) . While BRP carries a Zacks Rank #1 (Strong Buy), Spartan Motors and SPX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 114.1% in a year.
SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have appreciated 61.2% in the past year.
BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 42.5% over the past year.
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