What Will Be The Jump In Volkswagen’s Valuation If Audi Sells More Cars Than Expected?
Audi, the luxury brand owned by Volkswagen AG (OTCMKTS:VLKAY), forms ~13% of the group’s valuation, as per our estimate, and this doesn’t include the value from Audi’s China sales — as the China business is accounted for using the equity method of accounting. China sales form about ~30% of worldwide Audi sales. Audi’s business and brand image have been hampered by the news of the emissions scandal, which broke out last September. The brand has seen sales, excluding China, rise 4.6% year-over-year in the first seven months of this year. However, Trefis estimates Audi sales (excluding China) to rise at a CAGR of 1.8% between 2016 and 2021 due to the expected slowdown in developed markets such as North America and Europe, where the refilling of fleet already took place in the last couple of years after a prolonged period of weak economic conditions, and increased volatility in emerging markets. However, if the situation becomes better going forward, and Audi is able to increase its sales by more than expected, the impact on Volkswagen’s valuation of this upside could be as much as 8%.
In the upside scenario, Audi’s market share could grow by 30 basis points each year between 2016-2021, compared to the currently expected growth of 3-5 basis points each year. On the other hand, revenue per vehicle could grow at a CAGR of 3% as compared to the current estimate of 1.4% CAGR in the five-year period. The incremental sales are also expected to boost the margin for the company.
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Have more questions on Volkswagen? See the links below.
- What Is Working For Volkswagen In The U.S.?
- Where Will Volkswagen’s Revenue And EBITDA Growth Come From Over The Next Three Years?
- By What Percentage Have Volkswagen’s Revenues And EBITDA Grown Over The Last Five Years?
- What Is Volkswagen’s Fundamental Value Based On Expected 2016 Results?
- How Much Have Big Auto Companies Been Investing In Growth Opportunities?
- Has The Emissions Scandal Impacted Volkswagen’s Volume Sales This Year?
- Rundown Of How Volkswagen’s 2015 Results Were Impacted By The Dieselgate Issue
- How Significant Will China Be For Volkswagen By 2020?
- Where Volkswagen Stands Relative To Its Competitors In Crucial Markets
- How Is Audi Holding Up Compared To Its Compatriots In Crucial Markets?
- How Has Volkswagen’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What Is Volkswagen’s Revenue And EBITDA Breakdown?
- Why Premium Brands Are 3x As Valuable As Non-Premium Brands For Volkswagen
- How Much Will Premium Brands Contribute To Volkswagen’s Top Line By 2018?
- How Does Volkswagen’s China Market Share Compare With Other Foreign Automakers’?
- How Much Does Volkswagen Make On The Sale Of One Porsche, Audi, Skoda And Volkswagen Vehicle?
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