Although Volkswagen ended 2013 by narrowly snatching the No. 2 global sales position from GM, the rather cautious 2014 profit forecast and the Scania bid took shareholders for a rather scary ride.
After Europe’s biggest automaker unveiled its proposed bid to fully take over the Swedish truck maker in a 6.7 billion euro (5.5 billion pounds) offer, its shares took a 7.5% dive on Friday. The situation was not swayed by the 2014 profit outlook, in which the carmaker cautiously expects an operating margin between 5.5-6.5 % (5.9% in 2013) – a lot less than the average analyst poll of 7.4%.
“For a long while, VW’s endless European market share gains, constant success with (premium car brand) Audi, magical claims for the potential of MQB (modular platforms) and stated ambitions for global dominance combined to convince many that this was The World’s Best Auto Stock,” analysts at Bernstein Research said. “But such optimism has faded – VW has now disappointed the market quite a few times. 2014 will represent the fourth year of flat earnings in a row,” they added.
On Monday, Volkswagen’s shares after just half an hour of trading was bigger than the average daily trading for the last three months, while the shares additionally tumbled a 6.7 % to 187.45 euros. On the other hand, Scania’s shares went up 32 % to 195 Swedish crowns, though still a little under VW’s 200 crowns per share offer.