VOW.DE - Volkswagen AG

XETRA - XETRA Delayed Price. Currency in EUR
146.30
+2.90 (+2.02%)
As of 3:42PM CEST. Market open.
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Performance Outlook
  • Short Term
    2W - 6W
  • Mid Term
    6W - 9M
  • Long Term
    9M+
Previous Close143.40
Open142.40
Bid146.40 x 22300
Ask146.70 x 61000
Day's Range142.00 - 147.10
52 Week Range99.16 - 185.00
Volume29,614
Avg. Volume69,579
Market Cap71.638B
Beta (5Y Monthly)1.71
PE Ratio (TTM)6.77
EPS (TTM)21.62
Earnings DateJul 30, 2020
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateMay 15, 2019
1y Target Est195.40
Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.
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    • Reuters

      VW's labour chief sees no need for more cost cuts

      Volkswagen's labour chief Bernd Osterloh has been on a roadshow to tell analysts and investors the carmaker has no need for deeper cost cuts in Germany. Existing cost reduction measures, agreed in 2016, will be enough to help the company to overcome the coronavirus crisis, Osterloh said, according to an analyst note from MainFirst. Osterloh also said unions fully support Chief Executive Herbert Diess and that the Volkswagen ID.3 electric car is a strong product which is fully on track.

    • Volkswagen's Skoda boss Maier to step down at end of July
      Reuters

      Volkswagen's Skoda boss Maier to step down at end of July

      Bernhard Maier, chairman of Czech carmaker Skoda Auto, part of the Volkswagen Group <VOWG_p.DE>, will leave his post at the end of July after nearly five years, the company said on Thursday. Skoda, which did not give a reason for Maier's departure, said a successor would be elected by the board in August. The announcement of Maier's departure confirmed an earlier report in Handelsblatt.

    • VW's Skoda boss Maier to step down at end of July
      Reuters

      VW's Skoda boss Maier to step down at end of July

      Bernhard Maier, chairman of Czech carmaker Skoda Auto, part of the Volkswagen Group <VOWG_p.DE>, will leave his post at the end of July after nearly five years, the company said on Thursday. Skoda, which did not give a reason for Maier's departure, said a successor would be elected by the board in August. The announcement of Maier's departure confirmed an earlier report in Handelsblatt.

    • Reuters

      Prominent plaintiffs' firms sought government bailout to stay afloat

      Several prominent plaintiffs' law firms, known for striking large settlements with companies like German carmaker Volkswagen AG and Equifax Inc, were approved for loans that totaled tens of millions of dollars in government aid meant to help small businesses stay afloat during the coronavirus pandemic. San Francisco-based Lieff Cabraser Heimann & Bernstein, which has 100 lawyers and bills itself on its website as "among the largest law firms in the United States that only represent plaintiffs" was approved to receive between $2 million and $5 million under the Paycheck Protection Program, according to data released Monday by the U.S. Treasury Department and Small Business Administration. Steven Fineman, the firm's managing partner, said Lieff Cabraser used the loan to compensate lawyers and staff members and prevent layoffs.

    • Reuters

      Aston Martin's first SUV rolls off production line

      Aston Martin's first sport utility vehicle rolled off the production line on Thursday, key to hopes of a turnaround at the luxury carmaker which has seen changes in management and ownership over the last few months amid a torrid performance. Popular for being James Bond's carmaker of choice, the firm has had a difficult time since it floated in 2018 as sales disappointed and it burnt through cash, prompting it to seek fresh investment from billionaire Lawrence Stroll. The DBX vehicle is the company’s first foray into the lucrative sport utility vehicle market, a late entrant compared to many rivals such as Volkswagen-owned Bentley and BMW’s Rolls-Royce.

    • Volkswagen Management Tumult Spills Over to Truck Subsidiary
      Bloomberg

      Volkswagen Management Tumult Spills Over to Truck Subsidiary

      (Bloomberg) -- Volkswagen AG’s series of executive shakeups is reaching its commercial-vehicle operations, with the surprise departure of Traton SE’s chief and other managers highlighting friction over restructuring plans that were jolted by the Covid-19 pandemic.Andreas Renschler will leave VW’s management board effective July 15 and be replaced by Matthias Gruendler, the former chief financial officer of the Munich-based truck unit, according to a statement Tuesday.Traton management board member Joachim Drees, who leads the MAN trucks business, also will leave his post, as will personnel chief Carsten Intra. Intra will replace Thomas Sedran as head of VW’s light commercial vehicles division. Sedran, a key figure behind VW’s alliance with Ford Motor Co., will assume responsibility for asset management at the commercial vehicles and machinery operations.VW group has made several management changes over the past weeks amid internal tension that’s risen from costly efforts to electrify its lineup, while also coping with the biggest industry slump in decades. Tesla Inc. zoomed past the industrial giant in terms of market capitalization early this year and now has more than tripled VW’s valuation, despite selling a fraction as many vehicles.Executive OverhaulFormer VW brand Chief Operating Officer Ralf Brandstaetter was promoted to the brand chief position last month after group Chief Executive Officer Herbert Diess lost direct control following a clash with key supervisory board members. VW brand development chief Matthias Rabe moved to the British luxury-car marque Bentley and VW group purchasing chief Stefan Sommer abruptly left the manufacturer.The new CEO of VW’s Audi brand Markus Duesmann, who took over at the group’s premium-car unit in April, plans to accelerate a restructuring push to restore profit margins.VW pushed through an initial public offering of Traton last year after some back-and-forth that dragged on for months, but proceeds fell short of expectations and efforts to lift weak margins at MAN deflated. Traton’s top labor representative Saki Stimoniaris in April balked at calls by MAN’s management for significant job cuts. Traton relies heavily on profits from Scania, the Swedish heavy-truck specialist that has reacted faster to the industry slump than struggling MAN.Navistar ImplicationsTraton also made a takeover offer for U.S. peer Navistar International Corp. earlier this year. VW officials have signaled the strategic logic for the deal remains intact but have sent mixed signals about when and under what conditions the deal might go ahead.Navistar shares slumped following Traton’s announcement, falling 5.9% to close at $27.17 in New York trading. Navistar’s stock is still up 13% since Traton made its $2.9 billion offer in January.“From a personal point of view, there is no better point in time to leave and to hand over the business to a very experienced successor,” Renschler said in an internal letter to employees seen by Bloomberg. “With Matthias Gruendler, who some of you should know as our former CFO, as my successor I am sure that you will support him as much as you supported me.”Gruendler “will now continue” Traton’s course, VW chairman Hans Dieter Poetsch said in a statement. But Gruendler, a key architect behind the initial stake acquisition in Navistar, won’t join VW group’s management. Responsibility for the trucks operations at the parent company will be take over by personnel chief Gunnar Kilian.(Updates with details on MAN restructuring in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Motor Show Schedules Turn Topsy-Turvy, Launches Go Digital
      Zacks

      Motor Show Schedules Turn Topsy-Turvy, Launches Go Digital

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    • Fed Is Getting Awfully Close to Backing Apple Stock
      Bloomberg

      Fed Is Getting Awfully Close to Backing Apple Stock

      (Bloomberg Opinion) -- It doesn’t take much imagination to see the Federal Reserve supporting the stock price of Apple Inc.The central bank’s Secondary Market Corporate Credit Facility recently released details about its “Broad Market Index,” which is a roadmap for which individual bonds it will buy for its portfolio after changing the rules to avoid forcing issuers to certify they’re in compliance with the Coronavirus Aid, Relief, and Economic Security Act. Just looking at the 13 companies with weightings of at least 1%,(2)which collectively make up almost one-fifth of the index, a few things stand out. First, there are six automobile companies, with subsidiaries of Japan’s Toyota Motor Corp. and Germany’s Volkswagen AG and Daimler AG as the three largest issuers overall. In fourth is AT&T Inc., the largest nonfinancial borrower due in no small part to its $85.4 billion takeover of Time Warner Inc. Then there’s Apple. As a reminder, it’s the largest U.S. company by market capitalization at $1.57 trillion, edging out Microsoft Corp. and Amazon.com Inc. Its shares have easily rebounded from the selloff caused by the coronavirus pandemic, rallying 24% so far in 2020. Yes, Apple has about $100 billion of debt outstanding, but it’s also known for having one of the largest cash piles in the world. It’s so big, in fact, that the company could repay all its obligations and still have roughly $83 billion left over.With so much cash, that naturally raises the question: Why does Apple take on debt in the first place?In each of Apple’s past three dollar-bond sales, in November 2017, September 2019 and May, the company said it would use proceeds at least in part to repurchase common stock and pay dividends under its program to return capital to shareholders. In total, the company has doled out more than $200 billion since the start of 2018. It’s easy to see why company leadership would see it as too cheap not to borrow. Apple has the second-highest investment-grade credit ratings from Moody’s Investors Service and S&P Global Ratings, allowing it to issue $2.5 billion of 30-year bonds in May that yielded just 2.72%. Its $2 billion of three-year debt, within the Fed’s maturity range, priced to yield less than 0.85%.Luca Maestri, Apple’s chief financial officer, said during the last quarter’s earnings call that the company has more than $90 billion in stock buyback authorization left, adding that it plans to continue the same capital allocation policy going forward.Obviously, cash is mostly fungible for large enterprises, and any number of American companies in recent years surely issued bonds for reasons other than buybacks and also repurchased shares. Goldman Sachs Group Inc. estimated some $700 billion of shares were acquired by U.S. companies in 2019, which would make them the biggest net buyer of equities.Still, Apple openly using debt sales to help finance share repurchases puts the Fed in a somewhat awkward position. Chair Jerome Powell has consistently framed questions about its secondary-market facility in the context of supporting the central bank’s full employment mandate. Workers are “the intended beneficiaries of all of our programs,” he said in a hearing last month. It’s possible Americans “are able to keep their jobs because companies can finance themselves.”And yet, the Fed’s secondary-market facility comes with no strings attached. In fact, as I noted last month, its maneuver to create Broad Market Index Bonds circumvented the CARES Act requirement that any company must have “significant operations in and a majority of its employees based in the United States.” Rather than focus on the American worker, the stated goal is to “support market liquidity for corporate debt,” and, by extension, keep borrowing costs down for creditworthy firms. So there’s every reason to expect that Apple can and will issue bonds again in the near future, at an even cheaper rate, to fund stock buybacks and dividends. That, in turn, would most likely support share prices.That shouldn’t sit well with many people. Even President Donald Trump, who has used the stock market as a barometer of his economic policies, has signaled a preference for capital projects over buybacks. On March 20, just before the S&P 500 Index fell to its lowest level of the Covid-19 selloff, he lamented that companies used the money saved from his 2017 tax cut to repurchase shares rather than build factories. He said at the time that he would support a prohibition on buybacks for companies that receive government aid.“When we did a big tax cut and when they took the money and did buybacks, that’s not building a hangar, that’s not buying aircraft, that’s not doing the kind of things that I want them to do,” Trump said. “We didn’t think we would have had to restrict it because we thought they would have known better. But they didn’t know better, in some cases.” The Fed’s strategy for buying corporate bonds is passive enough that few would equate it to receiving direct assistance from the federal government. The same can’t be said about the central bank’s Primary Market Corporate Credit Facility, which as of last week is open for business. Companies that want to place bonds directly with the Fed must certify that they have “not received specific support pursuant to the CARES Act or any subsequent federal legislation” and “satisfy the conflicts-of-interest requirements of section 4019 of the CARES Act.” As my Bloomberg Opinion colleague Matt Levine described in detail last week, there’s a huge amount of paperwork for issuers, and the Fed has the right to demand its money back if the forms are wrong and companies use funds for unapproved reasons.In all likelihood, these constraints will turn almost every company away from the Fed’s primary-market facility. Instead, finance officers will reap the benefits of the central bank’s broad secondary-market interventions to issue new debt to private investors at rock-bottom rates and with no such rules, as they have for the past three months. And Wall Streeters will be happy with business-as-usual in the credit markets.To put it plainly one more time: The Fed didn’t have to loosely interpret the law to create this index of corporate debt. It was already following through on its pledge to buy exchange-traded funds and had a system in place for companies to become eligible for individual purchases. It chose this third route, encouraging headlines like  “Buying Corporate Bonds Is Almost Easy Money, Strategists Say.” What could go wrong?Now that it’s scooping up individual bonds issued for share buybacks without any stipulations, policy makers should be asked again why this program is the right way to go about supporting the recovery. The truth is likely that corporate America needs low-cost debt to survive. Apple and its shareholders are more than happy to tag along for the ride.(1) The Fed's facility has not yet purchased debt from all the companies in the index, at least according to its disclosure, which only covers the$429 million in bonds it bought on June 16 and 17. Its largest purchases were Comcast Corp., AbbVie Inc. and AT&T Inc.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Moody's

      Rebecca Bidco GmbH -- Moody's assigns B1 CFR to Rebecca Bidco (RENK); stable outlook

      Moody's Investors Service ("Moody's") has today assigned a B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR) to Rebecca BidCo GmbH, a holding company formed to effect the acquisition of RENK AG (RENK or the company) by the "Triton V" fund advised funds managed by Triton. RENK is a manufacturer of drive technologies and is active in various end markets, including defense, marine, cement, oil & gas, and power generation. Concurrently Moody's has assigned B1 instrument rating to the proposed EUR300 million 5-year senior secured notes, issued by Rebecca BidCo GmbH.

    • First Drive: Ferrari F8 Spider
      Yahoo Finance

      First Drive: Ferrari F8 Spider

      Late last year in Art Basel Miami, Ferrari debuted the car we are testing here, the F8 Spider. The Spider nomenclature for Ferrari means it’s a convertible, and here that includes a slick, retractable hard top.

    • Bloomberg

      Tesla's Overexcited Fans Should Cool Down a Little

      (Bloomberg Opinion) -- Back when Tesla Inc. delivered 95,000 cars to customers during the spring quarter of 2019, the stock price was languishing at about $235 and Elon Musk’s electric car company was valued at “only” $40 billion. Fast forward a year and the shares are now priced at more than $1,200. With a market capitalization of $224 billion, Tesla has surpassed Toyota Motor Corp. as the world’s most valuable automaker.Yet in the second quarter of 2020, Tesla delivered 91,000 vehicles — about 5% fewer than the same period last year. That’s pretty underwhelming for a company whose fans view it as a fast-growing technology company in the mold of Amazon.com Inc., rather than a sluggish metal-bashing carmaker. So how is the massive recent jump in its market value justified?In fairness, it shows resilience to sell this many cars when the company’s main California plant was shut by the pandemic for much of the spring period. Doubtless, Tesla’s new Shanghai plant picked up the production slack, which suggests the expense and effort of getting that China factory up and running was worth it. The launch of Tesla’s new Model Y crossover vehicle will have helped. Ford Motor Co. and General Motors Co. both saw their U.S. deliveries decline by a third in the same quarter. Nevertheless, Tesla’s stock market acolytes pushed the shares up another 8% on Thursday, adding $16.5 billion to the market value. Such exuberance is hard to understand. Musk’s company sold 7,650 more vehicles than analysts expected during the second quarter, and the stock price jump equates to about $2 million of added shareholder value for each of those additional sales. This seems a little excessive given that a Tesla Model 3 sells for less than $40,000, and the profit margin on those cars is pretty slim.  The shareholder reaction makes even less sense when you consider that Tesla investors aren’t really meant to buying the stock because of the company’s current sales, which are less than 4% of Volkswagen AG’s. Rather, the investment case is a long-term one: that it will come to occupy a dominant position in clean transport and energy in the years ahead. That explains why the shares trade at 320 times its analyst-estimated earnings this year. Viewed through this lens, Tesla’s ability to shift a few thousand extra cars in recent weeks shouldn’t matter so much for the valuation.  Investors’ tendency to overreact to Tesla news made more sense when its survival was open to doubt. A year ago it was laying off workers, U.S. sales were slowing and its retail strategy was confused. Senior staff kept heading for the exit. The company was burning through cash and ran pretty low on financial fuel. It had just $2.2 billion of cash in March 2019, compared with more than $8 billion now.But subsequent evidence that Tesla can sell cars for more than it costs to produce them has transformed the mood — and with it Tesla’s stock price.Instead of “killing” off Tesla, the tepid electric offerings of established carmakers such as Audi and Mercedes have only underscored the quality of their rival’s battery and powertrain technology (the same can’t be said of Tesla’s build quality). Volkswagen’s software problems with its forthcoming ID.3 electric vehicle suggest catching Tesla won’t be straightforward, even with the Germans’ vast resources.Tesla’s stratospheric valuation appears to have become self-reinforcing. Should it require more money to fund its roughly $9 billion of capital expenditure over the next three years, it can raise it from shareholders without worrying about diluting them too much.Similarly, holders of more than $4 billion of convertible bonds that Tesla issued to fund its expansion should be happy to convert them into stock, rather than demand cash repayment, taking some of the pressure off the company and its balance sheet.  Still, Tesla’s valuation remains impossible to justify by any standard metrics. Analysts’ average price target is more than 40% below the current level. Even Musk has suggested that the share price, which has almost trebled since the start of 2020, is too high — although, as with his taunting of the U.S. Securities and Exchange Commission and his comments about “fascist” lockdowns, it’s usually better to tune out what Musk says and focus on his actions instead.  The skeptics might have more faith in Tesla’s new position as the leader of the automaker pack when Musk stops his provocations and his shareholders stop getting giddy over modest good news.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • German authorities search Continental, Volkswagen as part of diesel probe
      Reuters

      German authorities search Continental, Volkswagen as part of diesel probe

      German prosecutors have extended their diesel emissions probe to include auto supplier Continental for its role in supplying engine components, searching the company's offices and those of automaker Volkswagen, the companies said on Wednesday. Prosecutors in Hanover, Germany conducted the searches as part of an investigation into how a 1.6 litre diesel engine came to violate emissions rules by masking excessive pollution levels. Premises in Hanover, Regensburg, Wolfsburg, Gifhorn, Berlin, Frankfurt und Nuernberg were searched by 76 Police and 4 prosecutors, a spokesman for the Hanover prosecutor's office said on Wednesday.

    • Financial Times

      Continental’s premises searched in diesel scandal probe

      German prosecutors have searched the premises of car supplier Continental in connection with an investigation into the 2015 diesel emissions scandal, the company confirmed on Wednesday. Several locations, including the company’s headquarters in Hanover and operations in Frankfurt and Regensburg, were searched “in an ongoing investigation in connection with a shutdown device used by VW in one of their diesel engines”, Continental said. Prosecutors from Hanover also visited Volkswagen premises in order to procure evidence relating to the investigation, VW confirmed, although the company is not a part of the probe.

    • Barrons.com

      China’s Electric Car Market Is Struggling. Investors Are Still Bullish.

      While China’s overall auto industry has rebounded, new energy cars remain on the lot. Toyota, BMW, and Volkswagen are among the firms involved in the early recovery.

    • Barrons.com

      Pandemic or Not, Elon Musk Is Revolutionizing Two Industries

      BEST CEOS Elon Musk is the ultimate multitasker. He not only heads Tesla, the second-most-valuable car company in the world, but also privately held SpaceX, which made history in May when it sent NASA astronauts to the International Space Station.

    • Reuters

      Ford, other automakers will stay neutral on challenges to Trump vehicle emissions rule -document

      Four major automakers will not take a position on legal challenges to the Trump administration's decision in March to dramatically weaken Obama-era fuel economy standards but want to weigh in on any court fix, according to a document seen by Reuters. The Trump administration in March finalized rollback of U.S. vehicle emissions standards to require 1.5% annual increases in efficiency through 2026. Ford Motor Co, Volkswagen AG, Honda Motor Co and BMW AG struck a voluntary agreement with California in July 2019 on vehicle emissions rules.

    • Reuters

      U.S. auto sales expected to continue their recovery in June - J.D. Power, LMC Automotive

      U.S. auto sales are expected to continue their recovery in June following a collapse in April, as coronavirus-led lockdown restrictions ease and buyers slowly return to the market, industry consultants J.D. Power and LMC Automotive said. The consultancies estimate total U.S. vehicle sales to fall about 25% to about 1.09 million units in June, slowing from an over 40% plunge in April and a 29% decline in May. "The industry continues to show signs of recovery in June," the consultancies said in a statement on Friday.

    • Ford COO: New F-150 pickup truck essential to carmaker's future
      Yahoo Finance

      Ford COO: New F-150 pickup truck essential to carmaker's future

      Ford looks for a U-turn in its financials with the introduction of the newly redesigned F-150.

    • Reuters

      Navistar names Persio Lisboa as CEO

      Navistar International Corp named insider Persio Lisboa as its chief executive officer, effective July 1, the U.S. truck maker said on Friday. Lisboa, a 32-year veteran with the company, is currently chief operating officer and executive vice president. Clarke will continue to manage talks with Volkswagen's truck division Traton SE, including its buyout offer in January to acquire Navistar for $35 per share, the company said.

    • Bloomberg

      U.S. Gains Ground in Effort to Freeze Huawei Out of 5G

      (Bloomberg) -- The U.S. campaign to hamstring China’s Huawei Technologies Co. is gaining fresh impetus as the Trump administration chokes off supplies of vital microchips and Beijing causes dismay on both sides of the Atlantic with its stance on Hong Kong and the coronavirus.The U.K. is reconsidering its embrace of Huawei while carriers in Denmark and Singapore have chosen other providers for their telecommunications networks. Meanwhile, Germany and France are reassessing the role of the company that the U.S. accuses of theft, sanctions busting and providing an avenue for espionage.Only months ago, the U.S. was struggling to persuade its allies not to use Huawei’s equipment. But in May, Washington moved to handcuff Huawei to outdated technology by denying it chips made with U.S. techniques. The change could turn Huawei into a permanent laggard, unable to update and maintain cutting-edge 5G networks that will be communications backbones for decades to come.At the same time, politics have been unkind to Huawei’s ambitions. Officials in Europe and the U.S. have criticized China over its handling of the Covid-19 pandemic. And Beijing drew condemnation for preparing national security laws for Hong Kong, a step seen as a threat to the city’s autonomy.“Two years ago no one worried about buying Huawei - that’s not true any more,” said James Lewis, director of the technology policy program at the Center for Strategic & International Studies in Washington. He sees “some progress,” in swaying other countries to ban Huawei “although well short of a total ban.”President Donald Trump is boasting of success, saying in a recent interview with the Wall Street Journal, “Look how tough I’ve been on Huawei. Nobody has been tougher than me.”The U.S. says Huawei is a threat to security for the fifth-generation, or 5G, wireless systems that are beginning to be deployed around the world. The networks promise speed and ubiquity: a thick forest of always-on links to billions of devices in homes, factories, surgical suites and autonomous vehicles. As more and more devices and networks are connected, vulnerability to hacking or espionage grows apace.Because Huawei is subject to control by China’s ruling Communist Party, it can be compelled by law to cooperate with the country’s security apparatus, and has been implicated in espionage, according to the State Department. The Pentagon chimed in Wednesday, sticking Huawei on a list of 20 companies it says are owned or controlled by China’s military, opening them up to potential new US. sanctions.Rob Manfredo, a U.S.-based spokesman for Huawei, didn’t respond to a request for comment.Huawei has denied allegations of spying, saying it would lose customers if it weren’t trustworthy. The Shenzhen-based company says it’s a private business that can’t be directed by Beijing, and that no Chinese law requires private national companies to engage in cyber-espionage.Chip BanThe Commerce Department’s ban in May of the sale of any silicon made with U.S. know-how was a potentially crippling blow to China’s tech champion. Huawei’s stockpiles of certain self-designed chips essential to telecom equipment will run out by early 2021, people familiar with the matter have said. While Huawei can buy off-the-shelf or commodity mobile chips from a third party like Samsung Electronics Co., it couldn’t possibly get enough and may have to make costly compromises on performance in basic products, they added.The chip restrictions add “uncertainty and potential costs” that could leave Huawei unable to meet commitments to build and maintain networks, said Robert Williams, executive director of the Paul Tsai China Center at Yale Law School. “The trade-offs between cost and security risks may look different now than they once did to the U.K.”Huawei’s position is sharply contested in Britain.The U.K. in January barred Huawei from sensitive core network components and high-risk areas like nuclear-power sites, but said the Chinese company could still constitute as much as 35% of networks’ 5G and fiber equipment elsewhere.That prompted an angry phone call from Trump to U.K. Prime Minister Boris Johnson. The Trump administration has said any country that uses an “untrustworthy” 5G vendor jeopardizes intelligence sharing with the U.S. That would strike at the heart of the traditional “Five Eyes” security alliance linking the U.S. and U.K., along with Australia, Canada, and New Zealand to cooperate on espionage.The U.K.’s January decision also triggered a rebellion of junior lawmakers in Johnson’s Conservative Party. Since then, Hong Kong and Covid-19 have helped to harden their stance.U.K. government officials now are seeking ways to phase the company out in as little as three years.“There’s been a pretty effective relentless American campaign,” said Sam Armstrong, spokesman for the Henry Jackson Society, a London-based policy group that has argued for blocking Huawei from the U.K.’s 5G networks. “The evidence in Parliament and the threats to Five Eyes intelligence-sharing arrangements have all contributed to a sense that this has had a seriously undermining effect on our trans-Atlantic relationship.”Despite the storm clouds obscuring its future in the U.K., Huawei committed Thursday to invest $1.2 billion in a research and development center near the English city of Cambridge, drawing criticism from a former leader of the ruling Conservative party. It said the timing was coincidental and the plans had been in the works for years. Growing TensionThe issue is fraught in other European countries, too. The company is losing luster in Europe after winning contracts across the continent, said John Strand, a consultant based in Copenhagen.“Around Europe, there is a growing focus on the use of Chinese equipment including Huawei,” Strand said in an interview. “When it comes to Hong Kong, it obviously has an impact.”Strand predicted other countries would follow paths such as those taken by Denmark, where the biggest phone company TDC A/S in March chose Stockholm-based Ericsson AB to build its 5G network, rather that its existing supplier Huawei. Earlier, Energy Minister Lars Christian Lilleholt highlighted security considerations for 5G, without mentioning Huawei.Such moves would represent a change of momentum for a beleaguered U.S. campaign, said Justin Sherman, a fellow at the Atlantic Council’s cyber-statecraft initiative.“There are many countries that have not done what the U.S. wanted,” including Germany, France and Italy, Sherman said. “There’s legitimate reason to be concerned about Huawei’s position on the 5G networks,” he said.U.S. diplomats say Ericsson and Finland’s Nokia Oyj build 5G gear and can be alternatives to Huawei. The European providers have struggled to compete with Huawei and ZTE Corp. equipment that’s often cheaper and at least as capable.“5G systems carry the most private information and intellectual property. It comes down to one question: Who do you trust?” Keith Krach, the U.S. undersecretary of state for economic affairs, said in an interview. “People are realizing that Huawei’s 5G is the backbone of that surveillance state.”U.S. officials point to progress in persuading allies, citing the European Union’s January adoption of a policy that said companies based in non-democratic countries could be excluded from parts of the network. The EU stopped short of an outright ban on Huawei.The German government is struggling to settle on rules that would require security certification for vendors in the 5G network. Earlier senior Chinese officials highlighted German car companies – the crown jewel of Europe’s biggest economy – as a potential target for retaliation if Huawei is banned from their markets. China is the biggest single market for Volkswagen AG, BMW AG and Mercedes-Benz maker Daimler AG. German Chancellor Angela Merkel has resisted a blanket ban on Huawei from 5G networks.France won’t ban any equipment maker from its 5G network, but will seek to protect critical infrastructure, finance minister Bruno Le Maire said earlier this year. With a spectrum auction set for September, carriers including Bouygues SA await a decision from the French cyber security agency Anssi on whether Huawei can be part of their plans. In a tweet earlier this week, U.S. Secretary of State Mike Pompeo praised France’s leading phone company Orange SA, calling it a “clean” telecom carrier after it picked “trusted” 5G equipment suppliers Nokia and Ericsson in January.Italy hasn’t moved against Huawei, though it has adopted rules to closely monitor telecommunications equipment suppliers, and scrutinize gear that comes from outside Europe. Italy has pursued a friendly approach with Chinese investors and especially with Huawei, which has poured money into the country, financing research centers, universities and schools.In Canada, Prime Minister Justin Trudeau has been stalling a decision on whether to ban Huawei from 5G wireless networks. Tensions between the two countries have been rising since Canadian authorities arrested Huawei Chief Financial Officer Meng Wanzhou on a U.S. extradition request in late 2018. After her arrest, China put two Canadian citizens in jail, halted billions of dollars in Canadian imports and put two other Canadians on death row. On June 2, two major Canadian wireless companies -- BCE Inc. and Telus Corp. -- said they’d build out their 5G wireless networks with equipment from Ericsson and Nokia.India has allowed Huawei to participate in trials, but the company’s entry into the country’s 5G commercial network could be blocked as tensions persist following border clashes with China. India is the largest wireless market outside China by number of subscribers, and has been a focus for investment by Huawei.“The tide is turning against Huawei as citizens around the world are waking up to the danger of the Chinese Communist Party’s surveillance state,” Pompeo said in a statement Wednesday.(Updates to add reference to U.K. development site in 19th paragraph. An earlier version of this story was corrected to fix the spelling of Huawei in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Volkswagen Is Said to Explore Offer for Europcar
      Bloomberg

      Volkswagen Is Said to Explore Offer for Europcar

      (Bloomberg) -- Volkswagen AG is exploring an offer for Europcar Mobility Group, according to people familiar with the matter. Shares of the rental-car company soared.Volkswagen’s considerations are at an early stage, said the people, who asked to not be identified because the matter isn’t public. The carmaker could opt to not proceed with an offer, they said. Europcar shares rose as much as 17% in trading on Wednesday in Paris.While Europcar has drawn interest from other suitors, finding a buyer during the Covid-19 travel slump could be difficult, the people said. Europcar hired advisers last year and set up a committee to weigh next steps after its largest shareholder, Eurazeo SE, warned of a potential exit from the car-rental agency and private-equity suitors began circling the firm.VW is considering a deal to expand its mobility services offerings, including rental and leasing programs for new and used electric cars, the people said. Europcar would give VW access to additional sales channels for its emerging electric fleet, especially as it’s unclear how the value of these vehicles develops after they’ve been in use for a few years.VW has in the past successfully shifted diesel models to markets in Eastern Europe via its financial services division after customers in western countries shunned them at the height of the diesel-cheating scandal.Europcar said in a regulatory statement that it “would actively continue its efforts to streamline” its cost base.“The company has started to work on this adaptation and, among the various possible options, may entertain contacts,” the statement said.Representatives for Eurazeo and Volkswagen declined to comment.Snapping up Europcar would mean competing with the likes of Sixt SE, which is offering anything from traditional rental services to car- and ride-sharing as well as an app-based car subscription model.If VW pursued a takeover, it would mark a reversal after the company sold Europcar to Eurazeo in 2006 for 1.26 billion euros ($1.4 billion). It now has a market value of about 420 million euros.Travel restrictions tied to the coronavirus pandemic have also upended the car-rental industry, with Hertz Global Holdings Inc. filing for bankruptcy in May.“A possible Volkswagen acquisition of Europcar Mobility, which purchases its rental fleet from the automaker, would be more of a distraction during this period of unprecedented operating challenges than a meaningful credit risk, given the manufacturer’s size,” Bloomberg Intelligence credit analyst Joel Levington said in a research note.Private equity firms such as Apollo Global Management Inc. had been interested Europcar last year, Bloomberg News previously reported.(Updates with Europcar comment starting in the seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    • Volkswagen explores acquisition of car rental group Europcar: sources
      Reuters

      Volkswagen explores acquisition of car rental group Europcar: sources

      The acquisition would come as Europcar struggles to cope with the economic fallout of the COVID-19 pandemic, which has weighed on travel around the world and sapped demand for car rentals. It would represent a reversal for Volkswagen, which sold Europcar to investment firm Eurazeo SE <EURA.PA> in 2006. Volkswagen has reached out to Europcar to express its interest in an acquisition and carry out due diligence, one of the sources said.

    • Reuters

      REFILE-Volkswagen explores acquisition of car rental group Europcar -sources

      Volkswagen AG is in talks to acquire French car rental firm Europcar Mobility Group SA , in a deal that would allow the German car maker to better capitalize on its fleet, people familiar with the matter said on Tuesday. The acquisition would come as Europcar struggles to cope with the economic fallout of the COVID-19 pandemic, which has weighed on travel around the world and sapped demand for car rentals. It would represent a reversal for Volkswagen, which sold Europcar to investment firm Eurazeo SE in 2006.

    • Scores of Volkswagen's Mexico staff test positive for coronavirus
      Reuters

      Scores of Volkswagen's Mexico staff test positive for coronavirus

      Volkswagen AG's <VOWG_p.DE> Mexican unit on Monday said about 2% of its workers tested for coronavirus had contracted the disease at some point, underlining the challenge faced by automakers in reopening factories before the pandemic has peaked in Mexico. Volkswagen last Tuesday began sending workers in reduced numbers back to its factory in the city of Puebla, where the German automaker and its luxury brand unit Audi <NSUG.DE> have major plants. Many other major carmakers, especially from the United States and Japan, had resumed operations in other parts of Mexico a couple of weeks earlier.