Per Reuters, Volkswagen AGVLKAY has decided to stop the delivery of T6 multivan to dealers. The auto maker made this announcement after it found that the diesel model caused high emission of nitrogen oxide. KBA, the German automotive regular, was informed about this development by Volkswagen.
Notably, two years ago, Volkswagen admitted to the U.S. authorities that they have used 'defeat device' or software in diesel engines.
A couple of days ago, a US-based Volkswagen AG executive - who supervised emissions-related issues - was sentenced to seven years of imprisonment for his role in a diesel emissions scandal. A penalty of $400,000 was also imposed on him.
In fact, the diesel emission scandals have been plaguing the German automaker for quite some time. Huge costs associated with these scandals are likely to have an adverse impact on this Zacks Rank #3 (Hold) company's earnings. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
However, shares of Volkswagen outperformed the industry over the past three months. The stock rallied 20.3% compared with 8.2% growth of the industry it belongs to.
Some better-ranked automobile stocks in the same space are Allison Transmission Holdings, Inc. ALSN , AB Volvo VLVLY and Wabco Holdings Inc. WBC . While Allison Transmission and Volvo sport a Zacks Rank #1, Wabco Holdings carries a Zacks Rank #2 (Buy).
Allison Transmission has a long-term growth rate of 10%. Shares of the company have gained 24%, year to date.
Volvo has a long-term growth rate of 15%. Shares of the company have gained 60%, year to date.
Wabco Holdings has a long-term growth rate of 15%. Its shares have rallied 35.7%, year to date.
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