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Volkswagen Positioned Well to Weather Slump

GM Stock Chart 7-17-08

GM Stock Chart 7-17-08

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According to a report just filed by Reuters, Volkswagen is quite healthy after a record year in 2008 and has cash reserves and bonds that will allow them to weather the huge downturn in worldwide car sales in relative comfort.

"A difficult 2009 lies ahead of us -- one of the most difficult years in our company's history," Chief Executive Martin Winterkorn.

Not exactly a sunny outlook on the situation, but with the $4.47 billion dollar bond recently acquired, they have handled most of their debt restructuring for the year, which should allow them to avoid any major snags while attempting to increase their market share and presence in the shaky auto industry.

Volkswagen's strong lineup has certainly helped reduce the impact of the slump and it shows--as they have only seen a 15% drop in sales while the rest of the industry has averaged nearly a 40% decline, bringing sales levels to the lowest level in 28 years.

No one can predict with certainty when the sales will pick up again but Volkswagen is already positioning itself to be ready when the market comes back. The company says increasing their market share significantly while others are struggling will help them reach their goal of becoming the number one worldwide car maker within the next ten years.

[Source: Reuters]

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