(Corrects Toyota’s company name in final paragraph.)
Volkswagen AG (VOW), Europe’s biggest carmaker, rose to a two-decade high for a second consecutive day as investment plans by its Audi luxury brand underpinned the company’s push to take the top spot in the auto industry.
Volkswagen preference shares gained as much as 1.1 percent to 174.45 euros, the highest intraday price since at least Nov. 5, 1992, and were trading up 0.2 percent at 1:34 p.m. in Frankfurt. The stock has gained 49 percent this year.
Audi, the world’s second-ranked luxury-car maker, outlined a program yesterday to spend 13 billion euros ($17 billion) through 2016 developing models and adding production with the aim of overtaking premium-market leader Bayerische Motoren Werke AG. (BMW) VW is targeting 2018 as the year it becomes the world’s biggest carmaker. IHS Automotive consulting company predicts it might reach that goal in terms of sales as early as 2014.
“VW is global behemoth combined with a growing premium luxury offering, and is a buy because of its cheap valuation,” David Arnold, a London-based automotive specialist at Credit Suisse, said by phone.
BMW also touched the highest price since 1992 today, the second time in consecutive trading sessions, before retreating. Die Welt newspaper cited Chief Financial Officer Friedrich Eichiner in an interview yesterday as saying the Munich-based company’s sales this year will probably rise 7.8 percent to about 1.8 million cars and sport-utility vehicles. BMW’s 11- month sales in China rose more than 25 percent, and it’s shifting vehicles to the U.S. market as demand in Europe drops.
“BMW is a bet on the stability of Chinese and U.S. earnings and a re-rating of the stock,” Credit Suisse’s Arnold said.
Volume of share trading in Wolfsburg, Germany-based VW was 26 percent of the three-month daily average, and the carmaker had a market value of 77.6 billion euros. The shares also gained along with those of Porsche SE, the holding company that controls the majority of VW’s common stock, after a New York state appeals court dismissed an investor lawsuit yesterday related to the Stuttgart, Germany-based sports-car manufacturer’s effort to take over the larger company.
Volkswagen’s 11-month group sales increased 10 percent to 8.29 million vehicles, propelled by 12 percent growth in November. The carmaker is likely to top General Motors Co. (GM) and Toyota Motor Corp. (7203) in 2014 with sales exceeding 9.4 million vehicles to become the world’s No. 1 automaker, IHS estimates.
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