Volkswagen Group (XETRA:VOW) has “little to gain” in continuing to sell flagship branded cars in the US after the departure of its chief executive there, Stifel analysts have argued.
“VW should rethink its regional strategy,” Stifel said in a note in the wake of last week’s news that Pablo Di Si would step down in favour of Kjell Gruner as the firm’s US head.
The change likely reflected the brand’s “poor progress” across the Atlantic, according to Stifel, where there is an appetite for larger cars in comparison to Europe.
“Autos are a scale business. Original equipment manufacturers benefit from platforms that can be rolled out internationally,” analysts pointed out.
“The US market is divided between GM, Ford and Stellantis and Tesla is taking a growing share. Cost-conscious consumers buy Toyota.
“For a mass market brand like VW, with small volumes and little pricing power, there is not much to gain.”
Though the US was seen as “crucial” for VW’s luxury offerings, Audi and Porsche, “undisputed” and “relevant” shares of the European and Chinese markets respectively meant focus should be shifted for the flagship brand.
Recent plans to shut factories in Germany, alongside the leadership shuffle in the US, showed a “willingness to make structural changes,” the bank added.
‘Buy’ was the rating from Stifel, alongside a €135 share price target.
Shares were up 0.2% at €81.94 on Monday.