Volkswagen (AO) | Buy | A glimpse of what could be to come with the next streamlining round...

研报英文原文证据摘录

Volkswagen (AO) | Buy | A glimpse of what could be to come with the next streamlining round...

Volkswagen Buy | Target Price: EUR98.00

However, it is not surprising, in our view, that the supervisory board meeting has not yet produced more material results.

Furthermore, the superficial descriptions used in the press release to depict the measures planned by management suggest to us

that the concrete shape of most of the programme's elements is still in limbo. There was no mention of factory closures, but we

think the intention to reduce capacities by another million vehicles will very likely entail shutting sites and reducing headcount.

In our view, this will be the most contentious topic in the negotiations ahead and very likely spark protests by unions, including

temporary strikes in the months ahead.

The lessons from all past first efficiency programme launched by VW, especially the one approved in late 2024, teach the lesson

that there is a time-consuming negotiation process between the stakeholders involved. This holds even more, in our view, since

with the new programme, management intends to trim the group's output capacities by another million (the VW group indicated

that pre-COVID, it had installed capacities for approximately twelve million vehicles while since then capacities have already been

trimmed by two million vehicles), in our interpretation, which will clearly spark opposition from unions and the German state of

Lower Saxony, in our opinion. Hence, we do not expect a quick solution. Ideally, negotiations would be concluded by autumn so

the results can still be included in the next financial planning round of the VW group.

We believe the contents of last night's press release will fail to act as a catalyst for the stock today.

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