Volkswagen to Double Slovakian Output - Analyst Blog

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In a bid to overcome the sluggish demand in Europe, Volkswagen AG ( VLKAY ) plans to double its production output at the Slovak plant with the introduction of Up minicar and Skoda and Seat branded vehicles.

Volkswagen is set to boost the production in Slovakia to reap benefits from its adoption of euro and lower labor costs. In 2012, the Slovak plant, close to Bratislava, delivered 419,888 vehicles compared with 210,441 in 2011.

The cars from this plant are also marketed in Russia, Germany, the U.S, the U.K. and China. This widespread network of the plant helps to offset the declining demand in Europe. The automaker along with General Motor Company ( GM ), Fiat S.p.A. ( FIATY ) and PSA Peugeot Citroen ( PEUGY ) are also concerned about the uncertainty in the European market.

The Slovak plant produces sport utility vehicles (SUVs) including new generation of Volkswagen Touareg, Audi Q7, and parts of the Porsche Cayenne. SUVs account for 51% of the total production of Volkswagen.

Headquartered in Wolfsburg, Germany, Volkswagen is the one of the leading automotive manufacturers in the world. The company is engaged in developing vehicles and engines, production and sale of passenger cars, commercial vehicles, trucks, and buses.

Volkswagen also offers an array of low-consumption small cars to luxury class vehicles, along with commercial vehicles ranging from pick-ups to buses and heavy trucks. Currently, Volkswagen retains a Zacks Rank #4 (Sell) on its stock.

Volkswagen posted a handsome 41% rise in net profits to €21.7 billion ($28.7 billion) in 2012 from €15.4 billion in the prior year, driven mainly by the accounting boost received from the addition of Porsche into the company's well renowned 12 brands.

Revenues escalated 21% to €192.7 billion ($254.9 billion), driven by impressive vehicle deliveries in the year that topped 9 million units globally for the first time in the company's history.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: FIATY , GM , PEUGY , VLKAY

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