In the wake of the economic uncertainties in Europe,
) recently announced that it will halt the production of Passat
cars for a week in Germany, according to Reuters. The move is a
part of the company's initiative to reduce its group output by
300,000 vehicles this year.
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According to sources, the company has reduced the global production
target for the group to 9.4 million vehicles from the previous
estimate of 9.7 million. However, the target is well above
the previous year's output of 8.5 million vehicles. In addition,
owing to the declining orders from the customers, the company also
plans to close its production facility in Emden in northwestern
Germany for a couple of days.
One of the company's major competitors,
General Motors Company
), also remains challenged by the ongoing financial crisis in the
euro zone. Its European operation Opel expects to incur an
operating loss of €1 billion ($1.3 billion) in 2012 due to
fewer-than-anticipated car sales.
Ford Motor Co.
), which also competes with Volkswagen, expects to lose between
$500 million and $600 million in 2012 in the 19 European markets
covered by the automaker, owing to the ongoing debt crisis in the
region. Ford recorded a loss of $27 million in 2011.
Volkswagen, in the second quarter of 2012, registered a 20%
increase in earnings per share to €12.05 ($15.2) from €10.04 per
share in the corresponding quarter of 2011. Total revenues went up
19% year over year to €48.1 billion ($60.4 billion).
Headquartered in Wolfsburg, Germany, Volkswagen is the manufacturer
and distributor of automobiles globally. The company operates in
Europe, North America, South America, and the Asia-Pacific.
Currently, Volkswagen retains a Zacks #3 Rank, which translates
into a short-term Hold rating.