LONDON: Volkswagen and BMW's plans to grab market share in the fast-growing electric car market and challenge Tesla could shift the dial for their cheaply priced shares.
"With VW's CEO really pushing the message on BEVs across all channels we believe the private investors are picking up on this story and could be quite a powerful force by themselves," said Barclays analyst Kai Alexander Mueller. "European carmakers, from a size and balance sheet perspective are well positioned to re-orient themselves towards electrification and they have strong distribution platforms," said Sunil Krishnan, head of multi-asset funds at Aviva Investors.
As well as lifting German autos stocks, the electrification drive is helping to boost broader European equity markets, which have long underperformed those in the United States.With positioning and flows into European equities still relatively weak, some investors think that could soon change. BofA's weekly flow data for March 10-17 showed fund managers withdrew US$1 billion from Europe, while pumping a record US$53 billion into U.S. equities.