The shareholders of the second largest automaker in the world and the biggest in Europe, VW AG, have renewed hopes that after long-running chairman Ferdinand Piech’s resignation there will be changes at the top strategy level.
The investors mostly expect the automaker to finally bring back to positive results both the sales and increase the overall profitability at the company’s namesake brand Volkswagen, while also addressing the numerous concerns surrounding overseas performance. And also put an axe to the ego-driven purchase plans that were cooked by the iron-handed former chairman. Piech has been the architect and a crucial figure for the German automaker when it comes to global expansion, but after two decades ruling the group almost undisputed he made his final wrong move in the attempt to ouster chief executive officer Martin Winterkorn – leading to the former’s resignation this past weekend. More than 80 percent of VW investors believe the market value of the automaker will soar after Piech’s ouster, forecasting the company would be able to better tap its potential for increased earnings, according to research conducted by advisory firm Evercore ISI.
Already the preference shares have grown by at least 5 percent, almost recuperating the entire loss that was brought by the two-weeks long leadership crisis. Also, normal shares started to trade on a rising path – hinting the Piech exit was an expected and wanted move by the investors. “Piech’s departure is good news for VW,” comments Evercore ISI analyst Arndt Ellinghorst, also lifting his stock recommendation from “hold” to “buy”.