Volkswagen's Short-Term Underlying Margin Improvements Insufficient to Signal a Culture Change

VW has a long history of high capital spending, a stubbornly growing cost base, and net cash outflows. Management touts the firm's advantages of global scale and strong brands. However, its financial metrics compare unfavorably with peers. Investors seem fatigued. VW’s 75% share in Porsche and 88% share in Traton account for almost the entire group’s market capitalization. Its net asset value per share is almost 4 times its current share price.