Author Topic: VW Stock?  (Read 19857 times)

slamuel

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VW Stock?
« on: September 22, 2015, 07:15:44 AM »
Thoughts on buying some now or in the near future?

My guess is that they hit rock bottom sometime over the next 6 months, but end up rebounding long term.

Kashmani

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Re: VW Stock?
« Reply #1 on: September 22, 2015, 07:28:15 AM »
Here is Kashmani's prediction:

1) VW will settle the U.S. claims for somewhere between $1 and $10 billion.

2) In the long term, VW will lose market share in the U.S. because it loses its diesel sales. (Many people buy VWs for the 2.0 TDI, which is arguably the best engine ever built.)

3) The fine will not be enough to kill VW in the U.S.

4) If I should be wrong, the U.S. government may or may not try to collect from VAG in Germany and VAG will survive.

5) If I should be wrong on that, VW will survive in China, which is its most important market anyway.

6) All in all, the shares are probably a good bet right now, but I am not a gambling man, so I will stick to my index funds.

7) Overall, this highlights how ridiculous U.S. regulations for diesel cars are. I am even stuck with a friggin' gasoline engine in my Smart because the diesel does not meet U.S. emission regulations. Go figure...

LAGuy

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Re: VW Stock?
« Reply #2 on: September 22, 2015, 11:37:21 AM »
Here is Kashmani's prediction:

1) VW will settle the U.S. claims for somewhere between $1 and $10 billion.

2) In the long term, VW will lose market share in the U.S. because it loses its diesel sales. (Many people buy VWs for the 2.0 TDI, which is arguably the best engine ever built.)

3) The fine will not be enough to kill VW in the U.S.

4) If I should be wrong, the U.S. government may or may not try to collect from VAG in Germany and VAG will survive.

5) If I should be wrong on that, VW will survive in China, which is its most important market anyway.

6) All in all, the shares are probably a good bet right now, but I am not a gambling man, so I will stick to my index funds.

7) Overall, this highlights how ridiculous U.S. regulations for diesel cars are. I am even stuck with a friggin' gasoline engine in my Smart because the diesel does not meet U.S. emission regulations. Go figure...

I disagree. This is pretty bad for VW. Perhaps the regulations are ridiculous, but they clearly conspired to break the law. There might be criminal charges that come out of this. The CEO may very well end up stepping down. European regulators are going to be investigating if they were skirting the regulations in their markets as well.

VW is already the largest car maker worldwide. Where they were struggling, and needed to do better was the US. This isn't going to help them in that market, obviously. Not a lot of upside on this huge conglomerate, and potentially a lot of downside. Don't catch this falling knife.

nereo

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Re: VW Stock?
« Reply #3 on: September 22, 2015, 11:52:39 AM »
Biggest question i have is how far this will spread.  Yesterday it was 500,000 vehicles in the north american market.  Now it's spread to 11million.  If they knowingly and deliberately screwed with emissions testing throughout all markets this puppy could have a long way to fall.  If this the worst of it than the brutal ~40% drop in share price could be a great entry point into the largest automaker.

how pervasive is this??

Telecaster

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Re: VW Stock?
« Reply #4 on: September 22, 2015, 12:00:13 PM »
Biggest question i have is how far this will spread.  Yesterday it was 500,000 vehicles in the north american market.  Now it's spread to 11million.  If they knowingly and deliberately screwed with emissions testing throughout all markets this puppy could have a long way to fall.  If this the worst of it than the brutal ~40% drop in share price could be a great entry point into the largest automaker.

how pervasive is this??

That's my question too.   It was one thing to consider Ford of GM stock at the bottom of the economic cycle.  They had almost no place to go but up, and had huge upside.  People weren't buying cars at that time, but people have to buy cars eventually.   It was a risk sure, but manageable and a clear upside.

I'm not seeing a clear upside to the VW mess.   They will lose a US marketshare right off the bat.   How do you get that back?   Not easy.   Lots of advertising, discounts, dealer incentives, etc.  Those things eat profits.    Next, they have some large, but unknown liabilities in the forms of fines and recalls.    That's money they can't spend on advertising, discounts, dealer incentives, and R&D for future models.   This could ding their profits for a long period of time.   

KaizenSoze

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Re: VW Stock?
« Reply #5 on: September 22, 2015, 12:09:12 PM »
Here is Kashmani's prediction:
7) Overall, this highlights how ridiculous U.S. regulations for diesel cars are. I am even stuck with a friggin' gasoline engine in my Smart because the diesel does not meet U.S. emission regulations. Go figure...

I disagree on this point. Yes, the US does evaluate diesels differently than Europe for a good reason. Smog, something many Europeans cities don't have to deal with but a city like LA does. US regulations specifically target smog producing compounds like nitrogen oxides.

Article about diesels and smog in France:
http://gizmodo.com/smog-is-forcing-france-to-rethink-its-love-of-diesel-1548333776

TheOldestYoungMan

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Re: VW Stock?
« Reply #6 on: September 22, 2015, 12:12:42 PM »
Well, it is a very big deal, but I don't think it kills VW.

I'm basing that on a couple of things.  The most relevant examples I can think of are Exxon and BP.  Both dumped a huge amount of oil.  Both faced heavy fines.  Both had stock prices that took a hit, and if you got in at the bottom or near the bottom you've done OK.  BP never got low enough for me, and I suspect it will be the same with VW.  Both could have faced very steep criminal charges.  This VW thing seems like it is alot more intentional, but I'm not sure if that will make all that much difference for the company.  There may be a guy who goes to jail or whatever, but none of us mere humans really matter to the companies.

As far as car companies going out of their way to hurt the environment, I don't know of anything similar.  Aside from the general condition that it is kind of their whole business model.

But yea, I had the same thoughts, "missed my chance to get a diesel" and "maybe now's a good time to buy VW stock."

I bet they survive though, just because car companies in the past have been caught essentially conspiring to kill actual people and had no significant fallout from it.

https://en.wikipedia.org/wiki/Firestone_and_Ford_tire_controversy

If it is true that their diesels simply cannot meet the emissions standards, then that will definitely hurt their competitiveness in the US, as previously mentioned in the thread.  The VW diesels are very popular as pretty much the only diesel passenger car option.  So any buy decision would need to assess their willingness and capability to innovate a new way to compete.  I think they can.

matchewed

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Re: VW Stock?
« Reply #7 on: September 22, 2015, 01:45:30 PM »
Well, it is a very big deal, but I don't think it kills VW.

I'm basing that on a couple of things.  The most relevant examples I can think of are Exxon and BP.  Both dumped a huge amount of oil.  Both faced heavy fines.  Both had stock prices that took a hit, and if you got in at the bottom or near the bottom you've done OK.  BP never got low enough for me, and I suspect it will be the same with VW.  Both could have faced very steep criminal charges.  This VW thing seems like it is alot more intentional, but I'm not sure if that will make all that much difference for the company.  There may be a guy who goes to jail or whatever, but none of us mere humans really matter to the companies.

As far as car companies going out of their way to hurt the environment, I don't know of anything similar.  Aside from the general condition that it is kind of their whole business model.

But yea, I had the same thoughts, "missed my chance to get a diesel" and "maybe now's a good time to buy VW stock."

I bet they survive though, just because car companies in the past have been caught essentially conspiring to kill actual people and had no significant fallout from it.

https://en.wikipedia.org/wiki/Firestone_and_Ford_tire_controversy

If it is true that their diesels simply cannot meet the emissions standards, then that will definitely hurt their competitiveness in the US, as previously mentioned in the thread.  The VW diesels are very popular as pretty much the only diesel passenger car option.  So any buy decision would need to assess their willingness and capability to innovate a new way to compete.  I think they can.

That article doesn't have a great deal of detail though. It's peppered with citations needed for the vast majority of the claims. It's hard then to quantify how bad that was versus 11 million vehicles and setting aside $7.2 billion dollars "just in case of lawsuit".

I get it car companies have killed people through defects. This is entire governments that have been lied to. I'm not trying to say lives don't matter but fucking with governments can lead you into some hot water.

I don't think they'll fold all the way but they're going to be very very hurt from this IMO.

LAGuy

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Re: VW Stock?
« Reply #8 on: September 22, 2015, 02:55:31 PM »
Yeah, I agree this isn't the end of VW or anything. The main question was if this was an investment opportunity. To which, I say "Hell NO!" I'm not sure I'd want to hold ANY car companies at this moment. How many others are doing this? Better believe everybody is getting a once over by the EPA and California.

nereo

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Re: VW Stock?
« Reply #9 on: September 22, 2015, 03:43:35 PM »
Yeah, I agree this isn't the end of VW or anything. The main question was if this was an investment opportunity. To which, I say "Hell NO!" I'm not sure I'd want to hold ANY car companies at this moment. How many others are doing this? Better believe everybody is getting a once over by the EPA and California.

Ok, but then ask yourself this:  Who's going to win in this situation?  I expect the number of cars sold in the US over the next 2 years to be approximately as much as those sold over the last two years.  I expect more cars to be sold globally.  If VW get's hammered over this.... which car company sells more? 

Jack

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Re: VW Stock?
« Reply #10 on: September 22, 2015, 08:57:48 PM »
But yea, I had the same thoughts, "missed my chance to get a diesel" and "maybe now's a good time to buy VW stock."

As long as they're not forced to buy back and destroy the cars entirely, this might be a good chance to get a slightly-used diesel cheap. Especially if you're willing to have a tuner "fix" the ecu after the recall is done (and you live somewhere that doesn't do emissions testing of diesels).

Keep in mind a few things about this:
  • Just because the cars fail to meet crazy EPA regulations, doesn't mean their emissions are bad on an absolute scale. They're still almost certainly way cleaner than any car made in the '90s, for example.
  • NOx doesn't even matter everywhere; it's only relevant in places that have excess VOCs for it to react with. If there's already excess NOx in the air, the rest of it will just sit there and not create ozone.
  • Reasonable people can disagree with the EPA while still caring about the environment. Arguably, these cars are cleaner than gasoline cars even despite the NOx because they put out less CO2.

Personally, I think this could be an opportunity: if the car isn't going to meet EPA specs anyway, you might as well re-engineer the emissions system so it can properly run 100% biodiesel! (Coincidentally, that would make the emissions even better for everything except NOx. In particular, SOx would drop to zero because biodiesel doesn't have any sulfur to begin with and it would become carbon-neutral because the fuel is coming from the short-term carbon cycle, not geologic deposits.)

bacchi

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Re: VW Stock?
« Reply #11 on: September 22, 2015, 09:35:06 PM »
We can use VW's Audi brand as an example. In the mid-80s, the Audi 5k had acceleration problems, much like Toyota did a few years ago. While the allegations were probably exaggerated or even false, the perception of quality caused their sales to plummet by ~80%. The brand didn't recover until 2000.

VW sold 366k cars last year in the US and about 30% of those sales were diesels. Given the PR and fines and recalls, their US sales could take years to recover.

Summary: Buying now, or in the near-to-mid future, is very risky.

mrpercentage

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Re: VW Stock?
« Reply #12 on: September 22, 2015, 10:11:10 PM »
Yep. I would not touch VW with a 10 foot pole. The market is rough for autos even when they don't deserve it. Ford should be going through the roof and its not. Ford is very strong domestically too and it still gets no love right now.

VW better get ready to bend over.

They did some dirty crap. That wasn't an accident. It wasn't an oops. It was a seriously organized criminal move to illegally take market share in areas they had no business being if thats where their standards were. They "juiced" and won some medals. Well those are revoked now. Boot them the hell out if they can't respect our laws. 10-40x worse then they were supposed to be. Seriously?

Corolla, Focus, Cruz, and Elantra will mop us the sales.

Telecaster

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Re: VW Stock?
« Reply #13 on: September 23, 2015, 12:15:15 AM »
And if they are willing to cheat on something this big, what other corrupt stuff are they doing? 

EricL

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Re: VW Stock?
« Reply #14 on: September 23, 2015, 01:26:35 AM »
The value of investing in VW depends on your investing philosophy. If you view stocks as essentially gambling than it might be OK to buy when the stock is in the dumps and await for the inevitable recovery. Though in this case the recovery may take a while.  It depends on how many lawyers and cash VW throws at US regulators and politicians and how much cash is pumped into U.S. advertising to resurrect Volkswagen's reputation.  And if VW has any future product good enough to trump that reputation.

If you're a value investor you're looking for a good, solid, profitable company that will go the distance. What constitutes "good" may be debatable but honesty and integrity is key. Volkswagen LIED deliberately and maliciously.  What other lies have they told that may pop out of hide investors may regret?  Everything in their prospectus is suspect. 

Myself, I don't think they're even a good gamble. 

On the other hand I found out Tesla employs only about 3k people and can pump a car out to the customer directly in a week or so. By comparison BMW employs well over 100k but cars are avilable to a dealer only over a course of months (though via them to the customer immediately).  So maybe Tesla is still a good buy.

691175002

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Re: VW Stock?
« Reply #15 on: September 23, 2015, 07:54:34 AM »
If you look at similar situations in the past (ex: BP spill) you often see some pretty extreme overreaction on the downside so there is certainly the potential of making some money on a bounce.

The main issue here is that VWs mistake wasn't an accident or caused by negligence/chance, it was a malicious and complex project whose only purpose was to deceive regulators.  The question is whether they can claim ignorance and pin it on a fall guy.

nereo

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Re: VW Stock?
« Reply #16 on: September 23, 2015, 08:45:45 AM »
If you look at similar situations in the past (ex: BP spill) you often see some pretty extreme overreaction on the downside so there is certainly the potential of making some money on a bounce.

The main issue here is that VWs mistake wasn't an accident or caused by negligence/chance, it was a malicious and complex project whose only purpose was to deceive regulators.  The question is whether they can claim ignorance and pin it on a fall guy.

you raise a good point, but I still see one major difference between BP and VW here:
BP's main product (oil) is a commodity, so once cleanup, fines and lawsuits got sorted out everyone was still buying oil from them at market price. In fact, everyone kept buying BP oil even when the Deepwater Horizon was front-page news. People can choose not to buy a VW car in a way they can't choose to not buy BP oil (BTW BP's fueling stations are independently owned so boycotting them doesn't hurt the publicly traded company).  Besides the 11-million-and-climbing recalls VW is doing they may have to discount their current cars for years. 

Remember the Firestone/Ford Explorer fiasco a little over a decade ago?  Firestone made crap tires that Ford installed on all of their already-tippy Explorers and a few dozen people died during rollovers (often caused by tire blowouts).  Ford had to discount all of their explorers and dealers offered 4 brand-new Micheline tires just to get inventory to sell, and the Explorer lost the spot as the best-selling SUV.  It seems VW has a much steeper hill to climb than Ford and Firestone did then.


acroy

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Re: VW Stock?
« Reply #17 on: September 23, 2015, 08:53:44 AM »
It looks like a value stock now. No reason not to grab a bit.
Remember Toyota, BP, and others. It has worked out!

LAGuy

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Re: VW Stock?
« Reply #18 on: September 23, 2015, 09:45:29 AM »
It looks like a value stock now. No reason not to grab a bit.
Remember Toyota, BP, and others. It has worked out!

CEO just announced his resignation. One of the things Warren Buffett says is to buy companies with good management teams. VW would pretty much be the opposite of that at this time. The CEO claims he didn't know about this. How much more is going on at VW that the guys at the top supposedly didn't know about? VW management is either inept or corrupt. When it comes to investing, I prefer the crooks here on Wall Street. At least they know how to not get caught...they steal your money before you've even made it!

LAGuy

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Re: VW Stock?
« Reply #19 on: September 23, 2015, 09:49:25 AM »
Check out this link on the resignation announcement. The money quote is at the bottom.

http://www.reuters.com/article/2015/09/23/us-usa-volkswagen-idUSKCN0RL0II20150923

Quote
Environmentalists have long complained that carmakers game the testing regime to exaggerate the fuel-efficiency and emissions readings of their vehicles. European politicians on Wednesday voted to speed up rules to tighten compliance with pollution limits on cars.

European car association ACEA said that so far there was "no evidence that this is an industry-wide issue".

But Societe Generale analysts said that while the uncertainty prevailed, the whole autos sector was likely to be “dead money” for a while.

Mntngoat

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Re: VW Stock?
« Reply #20 on: September 23, 2015, 09:50:27 AM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

ML

LAGuy

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Re: VW Stock?
« Reply #21 on: September 23, 2015, 10:04:14 AM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

ML

You want to buy a car that's not California street legal?

nereo

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Re: VW Stock?
« Reply #22 on: September 23, 2015, 10:12:08 AM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

I worry about will be required to make TDIs pass the EPA standards which have been in place since 2007.  I'm betting whatever it is, the driving performance will suffer, and possibly greater maintenance.
Also - I thought hipsters had fixie bikes.  When did they start buying diesels? 

Retire-Canada

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Re: VW Stock?
« Reply #23 on: September 23, 2015, 10:36:46 AM »
I worry about will be required to make TDIs pass the EPA standards which have been in place since 2007.  I'm betting whatever it is, the driving performance will suffer, and possibly greater maintenance.
Also - I thought hipsters had fixie bikes.  When did they start buying diesels?

http://www.wired.com/2015/09/vw-owners-arent-going-like-fixes-diesels/

Ya the options look grim.

LAGuy

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Re: VW Stock?
« Reply #24 on: September 23, 2015, 11:38:42 AM »
I worry about will be required to make TDIs pass the EPA standards which have been in place since 2007.  I'm betting whatever it is, the driving performance will suffer, and possibly greater maintenance.
Also - I thought hipsters had fixie bikes.  When did they start buying diesels?

http://www.wired.com/2015/09/vw-owners-arent-going-like-fixes-diesels/

Ya the options look grim.

Oof. Hello civil suits.

nereo

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Re: VW Stock?
« Reply #25 on: September 23, 2015, 01:02:21 PM »
Interesting addendum to this story.  About two months ago I almost bought a 2009 VW Jetta diesel wagon.
The price was right and the car was in great shape - it just fell through because I had to go out of town before we finalized the deal and someone else swooped in.

now i'm wondering if I saved myself or missed an opportunity.  It's still the same car, but perhaps I would have been entitled to compensation if I had bought it before the story broke.  OTOH, if I owned it now I might be required to do some performance-sucking adjustment and my resale would be toast. 

Only time will tell...

Koreth

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Re: VW Stock?
« Reply #26 on: September 23, 2015, 03:59:02 PM »


You want to buy a car that's not California street legal?
[/quote]

Since I don't live or drive in California, or any other state that's adopted the CARB rules, and thus have no reason to register a vehicle where said rules apply, whether my car meets the CARB rules is a non-issue for me. Such probably holds true for other people who don't live in CARB states.

LAGuy

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Re: VW Stock?
« Reply #27 on: September 23, 2015, 04:07:29 PM »


You want to buy a car that's not California street legal?

Since I don't live or drive in California, or any other state that's adopted the CARB rules, and thus have no reason to register a vehicle where said rules apply, whether my car meets the CARB rules is a non-issue for me. Such probably holds true for other people who don't live in CARB states.

Umm, ok cool story. But my reply was directed to ML. Who lives in California.
« Last Edit: September 23, 2015, 04:14:36 PM by LAGuy »

Spork

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Re: VW Stock?
« Reply #28 on: September 23, 2015, 05:47:50 PM »

Remember the Firestone/Ford Explorer fiasco a little over a decade ago?  Firestone made crap tires that Ford installed on all of their already-tippy Explorers and a few dozen people died during rollovers (often caused by tire blowouts).  Ford had to discount all of their explorers and dealers offered 4 brand-new Micheline tires just to get inventory to sell, and the Explorer lost the spot as the best-selling SUV.  It seems VW has a much steeper hill to climb than Ford and Firestone did then.

Totally off topic... but that's not exactly what happened.  Ford engineered that vehicle badly.  They had the tire right up next to the exhaust.  Then they had a very low suggested inflation pressure.  This all was okay, but was right there at the edge of what works with physics.  Take a handful of people that don't check tire pressure and let the tires get too low.  Now run this at highway speed right by a hot exhaust and they're going to blow.

There wasn't anything wrong with the tires.  Ford pushed hard to make everyone think so.  In fact, they extended the recall to almost every Ford truck to make the tire appear to be the problem.  I had an Expedition... which NEVER had issues, and I got 5 (not 4) free tires. 

JetBlast

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Re: VW Stock?
« Reply #29 on: September 23, 2015, 06:21:39 PM »
I can see the argument in favor of investing in VW, but I want no part of the company. It's about honesty.

I bought BP after the gulf oil spill. I still own it today. To me it looked like the general human errors that cause so many accidents were at the root of the spill. There was negligence, one hell of a technical challenge to cap the well, and a thoroughly botched and tone deaf response in the media by the company. But I never thought they were doing things that would make someone stand up and say "Holy shit! How did they think they'd get away with that?" The BP spill was no doubt a disaster but it was somehow so human. It was people losing sight of the big risks arising from seemingly small issues and decisions.

VW on the other hand is high up management and engineers conspiring to knowingly commit fraud. That's a massive failure of leadership on a whole other level. It's grossly immoral and I want no part of a company with that management culture.

tardis

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Re: VW Stock?
« Reply #30 on: September 23, 2015, 08:12:43 PM »
This whole situation makes me wonder how many other car companies do the same.  It was a piece of software that kicked in during testing only, correct?  Is it an industry standard so to speak, or has every other company smart enough not to go there?  It just seems odd to me that no other brand thought that reaching emissions standards was a hardship in the long term, yet VW did.  I expect this will get answered soon, but it will be interesting to keep an ear out.

Jack

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Re: VW Stock?
« Reply #31 on: September 23, 2015, 08:44:22 PM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

I worry about will be required to make TDIs pass the EPA standards which have been in place since 2007.  I'm betting whatever it is, the driving performance will suffer, and possibly greater maintenance.
Also - I thought hipsters had fixie bikes.  When did they start buying diesels?

Most of the hipsters around here have Priuses or Leafs. However, there are some who like diesels for the biodiesel aspect. Most of them -- like me -- have older ones that aren't affected by this because they were made before the stringent emissions standards.

...which brings me to my next point: even if you refused or circumvented the recall, these TDIs are still probably equal or cleaner than the ones made in 2006 and earlier. Their emissions are really not that bad -- and in particular, they're still probably better than many relatively-new vehicles, especially larger ones. I see no reason why there should be huge moral outrage over the emissions (as opposed to the deception, for which outrage is justified) when there isn't outrage against continuing to drive cars designed for old emissions standards, like I do (my TDI is a '98, and my oldest car is a '90).

This whole situation makes me wonder how many other car companies do the same.  It was a piece of software that kicked in during testing only, correct?  Is it an industry standard so to speak, or has every other company smart enough not to go there?  It just seems odd to me that no other brand thought that reaching emissions standards was a hardship in the long term, yet VW did.  I expect this will get answered soon, but it will be interesting to keep an ear out.

VW's engine was pretty unique: it was the only new diesel engine (that I know of) that avoided use of urea injection (even the closest competitor, the Chevy Cruze Diesel, bit the bullet and uses it). With urea injection, meeting NOx standards is much easier so there'd be no need to cheat.

There's still the pressure for everybody else to meet (gasoline-engine) emissions standards, but that's not nearly as difficult as meeting the EPA's diesel standard. Although I suppose, with competitive pressures, you never know...

To bring this back around to "investor alley," I wouldn't be surprised if Bosch ends up under particular scrutiny since they (I think) make the ECUs for VW cars.

hodedofome

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Re: VW Stock?
« Reply #32 on: September 23, 2015, 09:44:05 PM »
If you want to buy VW, look at some long dated out of the money options, where you can define the downside risk and keep it small, and if you turn out to be right, perhaps make a good bit compared to the risk you took. If you can't see at least a 3:1 reward/ risk ratio here, don't make the trade.

Only buy and hold the VW stock if you love the company and would want to hold it for a long time.


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nobodyspecial

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Re: VW Stock?
« Reply #33 on: September 24, 2015, 08:02:49 AM »

I disagree. This is pretty bad for VW. Perhaps the regulations are ridiculous, but they clearly conspired to break the law. There might be criminal charges that come out of this.
Interesting question will be who else is doing this.
VW make the best small diesel engines, if they had to cheat to meet US standards who else was cheating.

Funnily enough this has been so standard in the computer industry, having drivers that detect benchmarks and return exaggerated scores, that reviews refer to the scores as bogomarks
 

Retire-Canada

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Re: VW Stock?
« Reply #34 on: September 24, 2015, 08:26:01 AM »

Interesting question will be who else is doing this.
VW make the best small diesel engines, if they had to cheat to meet US standards who else was cheating.

BMW is getting some attention. Not clear if they'll be able to explain the discrepancy or not.

http://www.cbc.ca/news/business/bmw-disputes-report-its-x3-also-failed-emissions-test-1.3241472

forummm

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Re: VW Stock?
« Reply #35 on: September 24, 2015, 11:54:56 AM »
I would avoid legacy car companies in general. The market is going to be substantially electric pretty soon, and move towards self-driving vehicles. Tesla and Apple and Google are all working to massively disrupt the legacy industry. Maybe people won't own individual cars. But they will definitely be a lot more software-driven (literally). And only a couple legacy companies are actively embracing electric vehicles. The laggards are going to be scrambling to compete with Tesla et al. Apple has 3 times as many people working on their car concept than Tesla did when it had its IPO. Nissan Leafs aren't the same sleek and designed vehicles that Teslas are and an Apple car would be. But if you drive one you will realize that gas guzzlers pale in comparison. Can you imagine how many people would want to buy some dirty, loud, vibraty, Taurus when a smooth, instant torque, quiet, clean, and Apple-branded car is available, and requires almost no maintenance and is cheaper to drive? Electric cars are the near future.

nobodyspecial

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Re: VW Stock?
« Reply #36 on: September 24, 2015, 01:43:29 PM »
Electric are the future.
The question is who can manage the global supply chain, delivery, dealer and service network  - Toyota/VW or Apple/Amazon/Google
How different is mass market car making compared to high margin high end consumer electronics?


FoundPeace

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Re: VW Stock?
« Reply #37 on: September 24, 2015, 02:02:45 PM »
VW's engine was pretty unique: it was the only new diesel engine (that I know of) that avoided use of urea injection (even the closest competitor, the Chevy Cruze Diesel, bit the bullet and uses it). With urea injection, meeting NOx standards is much easier so there'd be no need to cheat.

There's still the pressure for everybody else to meet (gasoline-engine) emissions standards, but that's not nearly as difficult as meeting the EPA's diesel standard. Although I suppose, with competitive pressures, you never know...

To bring this back around to "investor alley," I wouldn't be surprised if Bosch ends up under particular scrutiny since they (I think) make the ECUs for VW cars.

It is surprising to me that they made it past inspections without use of urea injection at all. The fact that they didn't use urea should have immediately raised some red flags. In the heavy truck industry International tried to come up with an engine that could do this, but failed and that failure just about destroyed International. I wonder if part of the reason International thought it was possible was because VW was able to do it for passenger cars.

It really is messed up that VW, but this kind of thing isfairly common in the auto industry fairly common in the auto industry. All the more reason to ride a bike!

GM ignition switches-this one actually killed people, but is harder to prove that someone knew about it.
Toyota brake accelerating-Toyota knew about it and covered it up
DaimlerChrystler bribed government officials across Africa, Asia and eastern Europe over a 12-year period to gain government contracts (they discovered it through an internal audit).
These are all in the last 5 years. The article I linked includes a much longer list.

Aphalite

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Re: VW Stock?
« Reply #38 on: September 24, 2015, 03:10:06 PM »
Can you imagine how many people would want to buy some dirty, loud, vibraty, Taurus when a smooth, instant torque, quiet, clean, and Apple-branded car is available, and requires almost no maintenance and is cheaper to drive? Electric cars are the near future.

I feel there's a ton of people that are turned off by sleek and quiet, even though I don't understand it - just think about all of the people buying giant trucks or Jeep off roaders and use them to commute and get to work each day - but I think that once electric cars are ubiquitous, one generation later there probably own't be many people left with the mindset of "the good old days" with an emotional attachment to loud/dirty cars

Jack

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Re: VW Stock?
« Reply #39 on: September 24, 2015, 06:30:43 PM »
Sleek and quiet is fine, but electric cars are in no danger of supplanting internal combustion due to the simple fact of range.

Nobody's going to be able to drive a Tesla cross-country without stopping for more than a couple minutes at a time, any time soon. And that's what it'll take to get most people to take electrics seriously as their primary car.

Kashmani

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Re: VW Stock?
« Reply #40 on: September 24, 2015, 06:49:53 PM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

ML

Funny - I was having the opposite reaction. I would expect slightly used TDIs to go up in value now that the new ones cannot be sold any longer and they will become rare. I would not be surprised if almost-new TDI's would trade at sticker price for a while. Consider history: 20-year old Mercedes diesels are still selling for a price premium. And here in Canada, there is a sub-culture importing 15-year old Delicas from Japan because they are diesel 4WD vans. Heck, even first-generation Smarts are still selling for a premium because they are diesel and the new ones are gasoline. Most customers would pick reduced fuel consumption and higher torque over lower emissions every time.

If you can have an engine that gets 5 litres per 100 km, would you voluntarily sell it just because it cannot be driven in California? I for one, would hold onto mine for dear life if I owned a TDI right now. Frankly, I am kicking myself for having decided to delay my car purchase until 2016 and having missed the boat. As a diesel fan, I am in mourning now as another one bites the dust...

Spork

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Re: VW Stock?
« Reply #41 on: September 24, 2015, 07:28:27 PM »
seems to me it would be a good time to buy a  TDI.  with everyone pissed at them the hipsters will be dumping them  and prices should be lower.

ML

Funny - I was having the opposite reaction. I would expect slightly used TDIs to go up in value now that the new ones cannot be sold any longer and they will become rare. I would not be surprised if almost-new TDI's would trade at sticker price for a while. Consider history: 20-year old Mercedes diesels are still selling for a price premium. And here in Canada, there is a sub-culture importing 15-year old Delicas from Japan because they are diesel 4WD vans. Heck, even first-generation Smarts are still selling for a premium because they are diesel and the new ones are gasoline. Most customers would pick reduced fuel consumption and higher torque over lower emissions every time.

If you can have an engine that gets 5 litres per 100 km, would you voluntarily sell it just because it cannot be driven in California? I for one, would hold onto mine for dear life if I owned a TDI right now. Frankly, I am kicking myself for having decided to delay my car purchase until 2016 and having missed the boat. As a diesel fan, I am in mourning now as another one bites the dust...

That depends on various governing authorities.  If you no longer can pass inspections, they're likely to tank in value. 

DarinC

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Re: VW Stock?
« Reply #42 on: September 24, 2015, 09:57:48 PM »
...which brings me to my next point: even if you refused or circumvented the recall, these TDIs are still probably equal or cleaner than the ones made in 2006 and earlier. Their emissions are really not that bad -- and in particular, they're still probably better than many relatively-new vehicles, especially larger ones. I see no reason why there should be huge moral outrage over the emissions (as opposed to the deception, for which outrage is justified) when there isn't outrage against continuing to drive cars designed for old emissions standards, like I do (my TDI is a '98, and my oldest car is a '90).
The moral outrage is because the emissions levels seen during testing were that bad. The cars w/o ad-blue in particular were over early 90s emissions levels for diesels. It's possible they were approaching early 80s diesel emissions levels. Those with adblue were better, but still worse than 2006 emissions requirements.

Nobody's going to be able to drive a Tesla cross-country without stopping for more than a couple minutes at a time, any time soon. And that's what it'll take to get most people to take electrics seriously as their primary car.
It depends on the person. The 90D can go ~280 miles to empty at a 70mph cruise, which is 4 hours. Real world is probably ~3.5 hours on average to keep that ~35+ mile buffer, but that's still about how often my wife and I stop on long distance trips. At this point the limit is more supercharger access/spacing than range IMO, but if you want to drive for 6 hour stretches, then you'll probably need to wait for a 135D.
« Last Edit: September 24, 2015, 10:14:44 PM by DarinC »

Jack

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Re: VW Stock?
« Reply #43 on: September 25, 2015, 05:27:03 AM »
...which brings me to my next point: even if you refused or circumvented the recall, these TDIs are still probably equal or cleaner than the ones made in 2006 and earlier. Their emissions are really not that bad -- and in particular, they're still probably better than many relatively-new vehicles, especially larger ones. I see no reason why there should be huge moral outrage over the emissions (as opposed to the deception, for which outrage is justified) when there isn't outrage against continuing to drive cars designed for old emissions standards, like I do (my TDI is a '98, and my oldest car is a '90).
The moral outrage is because the emissions levels seen during testing were that bad. The cars w/o ad-blue in particular were over early 90s emissions levels for diesels. It's possible they were approaching early 80s diesel emissions levels. Those with adblue were better, but still worse than 2006 emissions requirements.

Oh wow, really?! I know my '98 is a better car than the '09+s in general, but I didn't realize it has better emissions too!

Scandium

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Re: VW Stock?
« Reply #44 on: September 25, 2015, 07:48:55 AM »
Apple has 3 times as many people working on their car concept than Tesla did when it had its IPO.

Source for this? Personally I find the idea that Apple would make a car completely unbelievable. Even less likely than the idiotic, 5 year+ apple TV rumors.

And google don't make cars, they just put software in them. Unless you count a video render...

Developing, making, certifying (turns out..), advertising, shipping and selling cars is hard, unsexy work with low margins. I seriously doubt any of the companies you mentioned have any interest in doing it. Tesla only exists because Musk throws his billions at it, and some nerd hype over owning the new and shiny (I mean the car makes zero financial sense. I can buy 100 years worth of gas for my prius for the price of a tesla..)

brooklynguy

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Re: VW Stock?
« Reply #45 on: September 25, 2015, 08:08:05 AM »
(I mean the car makes zero financial sense. I can buy 100 years worth of gas for my prius for the price of a tesla..)

That's because it was (and is) Tesla's business plan to develop a high-priced, low-volume car for the super rich, in order to fund the development of a mid-priced, mid-volume car for the pretty rich, in order to fund the development of a low-priced, high-volume car for the masses (see WBW: How Tesla Will Change the World).  The current financial suboptimality of purchasing a Tesla does not negate forummm's argument about the role Tesla is playing and will be playing in the already-underway total disruption of the automobile industry.

TheOldestYoungMan

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Re: VW Stock?
« Reply #46 on: September 25, 2015, 08:13:08 AM »
Aye, and following Tesla's rise is interesting just because Musk will openly talk about the issues they face from the entrenched car companies.  They have to go to state legislatures and lobby to have exceptions to laws put in to protect the legacy companies.

Also, the idea of an apple car is hilarious to me.  Meet the iSedan.  Luxurious comfort for you and your family, stylish design, full time online genius support, free engraving, all for the low low price of $197,000.00.  You can get it in any color, as long as it's shiny white plastic.

Scandium

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Re: VW Stock?
« Reply #47 on: September 25, 2015, 08:18:54 AM »
(I mean the car makes zero financial sense. I can buy 100 years worth of gas for my prius for the price of a tesla..)

That's because it was (and is) Tesla's business plan to develop a high-priced, low-volume car for the super rich, in order to fund the development of a mid-priced, mid-volume car for the pretty rich, in order to fund the development of a low-priced, high-volume car for the masses (see WBW: How Tesla Will Change the World).  The current financial suboptimality of purchasing a Tesla does not negate forummm's argument about the role Tesla is playing and will be playing in the already-underway total disruption of the automobile industry.

yes I am aware of their business model. Although they seem to have taken a step in the other direction with the model X
http://arstechnica.com/cars/2015/09/tesla-model-x-pricing-revealed-and-its-not-cheap/
The elusive model 3 is further and further off..

Whether they will ever make it to the level where their car is price competitive (rather than just "nerd-cred competitive") we'll just have to wait and see. I'm not holding my breath. And I don't see much reason why other, traditional car companies can't make it there first.

I'd classify myself on the geek spectrum, but this swooning over apple/google/tesla/amazon as tech gods than can jump in and disrupt and fix anything if they only bothered is a slight pet peeve of mine. E.g. Apple sells phones and their big innovation this time was a camera that makes gifs. Google sells ads and occasionally makes a phone OS that occasionally works. I'm not sure that's who I'd count on to revolutionize the car industry.

Scandium

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Re: VW Stock?
« Reply #48 on: September 25, 2015, 08:22:09 AM »
Aye, and following Tesla's rise is interesting just because Musk will openly talk about the issues they face from the entrenched car companies.  They have to go to state legislatures and lobby to have exceptions to laws put in to protect the legacy companies.

Also, the idea of an apple car is hilarious to me.  Meet the iSedan.  Luxurious comfort for you and your family, stylish design, full time online genius support, free engraving, all for the low low price of $197,000.00.  You can get it in any color, as long as it's shiny white plastic.

If you're talking about what I think it is (no direct sales?) I have a correction; those laws were in place to protect car dealers, not companies. In fact they were put in place to prevent the car makes from having monopoly on sales of their vehicles. Or something, I don't fully understand the reasoning behind it. But yes, it is stupid.

forummm

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Re: VW Stock?
« Reply #49 on: September 25, 2015, 08:26:04 AM »
Apple has 3 times as many people working on their car concept than Tesla did when it had its IPO.

Source for this? Personally I find the idea that Apple would make a car completely unbelievable. Even less likely than the idiotic, 5 year+ apple TV rumors.

And google don't make cars, they just put software in them. Unless you count a video render...

Developing, making, certifying (turns out..), advertising, shipping and selling cars is hard, unsexy work with low margins. I seriously doubt any of the companies you mentioned have any interest in doing it. Tesla only exists because Musk throws his billions at it, and some nerd hype over owning the new and shiny (I mean the car makes zero financial sense. I can buy 100 years worth of gas for my prius for the price of a tesla..)

http://www.patentlyapple.com/patently-apple/2015/09/apples-goal-of-1800-employees-for-project-titan-more-than-triples-what-tesla-had-prior-to-their-ipo.html

Prices are dropping. The next version of Tesla will be $35k. Leafs are cheaper than that now (with less range). The Gigafactory will produce as much battery capacity by itself as the entire world does now. That economy of scale alone will drive prices down on the batteries. The battery is the expensive part now. And that has already been dropping in price at 8-10% per year.