12 Best Automotive Stocks to Invest in According to Analysts

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2. Volkswagen AG (OTC:VWAGY)

Upside Potential: 54%

Number of Hedge Fund Holders: 1

Volkswagen AG (OTC:VWAGY), a German automotive giant, is one of the world’s leading manufacturers of automobiles and commercial vehicles, and the largest carmaker in Europe. The company owns well-known brands such as Volkswagen, Audi, Porsche, and Lamborghini. Volkswagen’s investments in battery technology and autonomous driving underscore its commitment to a carbon-neutral future.

On January 14, Volkswagen AG (OTC:VWAGY) released its vehicle delivery report. Despite challenging market conditions and intense competition in China, the company delivered nine million vehicles in 2024. Volkswagen has been aligning its group strategy towards innovative mobility solutions and is working on transforming into a software-oriented organization. As part of this strategy, the company introduced more than 30 new models in 2024, featuring numerous innovations. In the all-electric vehicle segment, Volkswagen AG (OTC:VWAGY) has achieved market leadership in Europe. The company plans to introduce another 30 new models in 2025.

In the second week of December, Morgan Stanley analysts anticipated a significant recovery for Europe’s leading automakers, including Volkswagen AG (OTC:VWAGY), in 2025. This optimistic outlook follows a challenging 2024, during which the industry faced elevated energy costs, declining sales in China, and slower-than-expected adoption of electric vehicles (EVs). The analysts said that automakers’ worst problems may be behind them and believe that the situation could improve dramatically as vehicle affordability continues to improve driven by rising incomes and decreasing interest rates. Additionally, potential government support, in response to increasing competition from Chinese EV manufacturers, could further bolster the prospects of European carmakers. On similar lines, in October, Barclays had suggested that European car manufacturers have hit rock bottom, which again supports a stronger outlook in 2025.

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