Volkswagen Drags Other Auto Shares Lower
04 Novembre 2015 - 12:20PM
Dow Jones News
FRANKFURT—Shares in Volkswagen AG and the group's financial
holding Porsche Automobil SE tumbled by more than 8% in early trade
Wednesday, dragging shares of other car makers lower on fears that
more companies could be affected by the emissions scandal after
Volkswagen admitted late Tuesday it understated the level of
carbon-dioxide in additional cars, including gasoline-powered
cars.
"One doesn't believe any more that this is a mere Volkswagen
problem, but the perception is that this will become a burden for
all car manufacturers," said a trader in Frankfurt. That is why the
entire sector is now collectively punished, the trader said.
Shares slightly recovered from earlier lows and at 0906 GMT VW
was down 7.9% while Porsche SE was 7.7% lower. Both had repeatedly
dipped to 9% down. Daimler shares, down more than 5% shortly after
trading started, were now down 2.2%. BMW was 1.9% lower. Europe's
Stoxx 600 Automobiles & Parts was down 1.9% after a 3.1%
decline earlier. This was the only European sector index in the
red.
The reaction follows Volkswagen's admission late Tuesday that
its emissions-testing scandal had widened beyond what was
previously disclosed, now encompassing a broader set of infractions
that could affect about 800,000 more cars and cost it at least an
extra $2 billion. The violations go beyond the company's diesel
range for the first time.
The latest news is a fresh blow after VW's admission in
September that up to 11 million diesel-powered vehicles world-wide
could have so-called defeat devices that lowered tailpipe emissions
of nitrogen oxides during laboratory testing.
Analysts pointed to the clear risk that there is more to
come.
"As this is a first indication, we clearly see the risk that
additional cars or other misbehavior may emerge, which would raise
potential costs even further," says Commerzbank analyst Sascha
Gommel, who has ratings and price targets for Volkswagen and
Porsche SE under review. "In addition, we also believe that a
negative sector reaction is likely as a discussion will start if
other original equipment manufacturers have also had irregularities
in their CO2 classifications," the analyst said.
Other analysts also said it has now become even more difficult
to assess the impact of the scandal, but the latest disclosure will
likely further damp demand for Volkswagen cars and depress the
company's earnings.
"As irregularities are mounting we now see a higher risk than
before that unit volumes and pricing of the offered cars will come
under pressure with a detrimental effect on future margin
development," said Equinet Bank in a note to clients and lowered
its rating for the shares to 'Neutral' from 'Accumulate'. But
analyst Holger Schmidt still thinks that Volkswagen has enough
money to withstand the storm.
LBBW downgraded Volkswagen's bonds to hold from buy and put
Volkswagen credit default swaps on buy protection from sell
protection. The material damage is bearable but "worse is the new
setback amid the planned clearing up and damage remedy, and the
related uncertainty," said the analysts.
The new announcement will step up pressure on Volkswagen's
management and supervisory board "as the wrongdoings inside VW seem
to get bigger every day," said Commerzbank's Mr. Gommel.
Michael Denzin contributed to this article
Write to Ulrike Dauer at ulrike.dauer@wsj.com
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(END) Dow Jones Newswires
November 04, 2015 06:05 ET (11:05 GMT)
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