Volkswagen AG (OTC:VWAGY) reported total unit sales of 35,412 in August, marking an increase of 9.8% year over year. On a year-to-date basis, unit sales were up 6.6% to 251,208 units. The company’s SUV sales surged 51% year over year to 19,192 units in August. This also helped offset a 17% drop in total car sales for the month. Year to date, Volkswagen’s SUV sales have grown 17% to 131,041 units, while total car sales dipped 2.6% to 123,349 units.
Volkswagen’s Atlas sales in August soared 103% year over year to 8,227 units, marking the second-best month for the model. Furthermore, sales of 53,641 units for the model during the January-August period highlighted a year-over-year rise of 39%.
This apart, Tiguan model’s sales reached 10,955 units in August, recording year-over-year growth of 50%. Also, it signifies the second best sales performance for the model. On a year-to-date basis, Tiguan sales were up 28% to 76,927 units. The Jetta model’s sales dropped 9.5% year over year to 9,592 units in August. Notwithstanding the dip, the model’s year-to-date sales grew 32% to 66,651 units from the prior-year period.
Volkswagen’s Certified Pre-Owned (CPO) sales recorded the second best performance for August to 10,400 units, up 15% year over. Also, year to date, CPO sales grew 16% to 74,400 units.
Despite a challenging industry condition, Volkswagen recorded growth for the sixth consecutive month. Continued growth of SUVs has contributed to the company’s balanced portfolio. Notably, in August, SUVs accounted for 54% of total unit sales.
Volkswagen’s operating profit in second-quarter 2019 climbed 30% year over year to $5.71 billion, driven by stellar sales from SUVs and premium-brand models, which helped mitigated a decline in overall vehicle deliveries.
For the current year, the company expects slightly higher vehicle deliveries from the 2018 levels. Moreover, Automotive revenues will likely be up to 5% higher than 2018 revenues.
The company recently announced that volume production for the ID.3 electric car will commence production this November, with the first set of deliveries expected in 2020. In fact, 30,000 reservations have already been received for the car’s special first edition.
For the first time, ID.3 features Volkswagen’s Modular Electric Toolkit, also known as MEB platform. The Volkswagen Group is also ready to produce 33 more vehicles with MEB platform in the next three years.
Volkswagen AG Price and Consensus
Zacks Rank & Key Picks
Volkswagen currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Auto-Tires-Trucks sector are Lithia Motors, Inc. LAD, General Motors Company GM, and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lithia Motors has an expected earnings growth rate of 12.8% for 2019. The company’s shares have surged 61.7% over the past year.
General Motors has a projected earnings growth rate of 3.06% for the current year. The company’s shares have rallied 19.3% in a year’s time.
SPX has an estimated earnings growth rate of 14.5% for the ongoing year. Its shares have moved up 19.1% over the past year.
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