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It seems the tides are shifting in the automotive world. Recent moves by UBS suggest increasing concern over Volkswagen and Renault’s ability to maintain their dominance in the face of surging competition from Chinese electric vehicle (EV) producers.
**A Closer Look at Volkswagen**
UBS recently adjusted their stance on Volkswagen, downgrading the giant from a “Neutral” position to a “Sell”. Furthermore, the stock’s price target took a hit, dropping from a robust 135 euros (around $145.78) to a mere 100 euros per share. That’s almost an 8% dip from where it currently stands.
What’s the reason behind this significant shift? The analysts at UBS express concerns that Volkswagen, once the reigning automotive champion in China, is now vulnerable to the aggressive strides made by Chinese EV manufacturers. Companies like BYD, backed by none other than the legendary investor Warren Buffet, are rapidly carving out a sizeable chunk of the market share.
What makes Volkswagen’s situation even more precarious is its reputation as Europe’s top automaker. As more affordable and competitive Chinese EVs make their way onto European shores, Volkswagen might find the pressure mounting, and its position threatened.
**Renault’s Story**
Though this piece primarily focused on Volkswagen, it’s essential to mention that Renault too is feeling the heat from the East. The rising EV tide from China doesn’t seem to be discriminating, and established brands will need to innovate and adapt to stay in the game.
The global automotive landscape is in flux, and it’s fascinating to observe which giants will adapt and thrive, and which might take a back seat. Stay tuned as we continue to track this ever-evolving saga!
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Source: https://www.cnbc.com/2023/09/05/most-at-risk-ubs-downgrades-2-major-automakers-over-china-evs-threat.html
