Volkswagen AG (NASDAQ:VLKAY) Launch of New SUVs in 2016 Could Bolster Stock

Volkswagen AG (NASDAQ:VLKAY) , the biggest automaker in Germany and the second largest automaker company in the whole world, on July 14, disclosed that it is going to introduce its mid-sized SUV vans in the next one or two years. The automaker company further briefed that the SUV vans will be seven-passenger vehicles and the company will build these vans in its Chattanooga factory. The SUV vans will be launched in the market in 2016, and the production of van’s components and its assembling will generate approximately 2000 jobs. Another advantage for VW is that it can penetrate into the U.S lineup by launching the SUV vans. The parent company’s chairman of the board of management, Professor Dr. Martin Winterkorn, said that the company is fully prepared to attack the automotive industry of America.

Moreover, Volkswagen AG (NASDAQ:VLKAY) says that it will put away almost $900 million dollars in order to expand its operations. The company further stated that almost $600 million of this money will be spent to expand the company’s operation in the State of Tennessee. It is important to note here that the company manufactures its mid-sized Passat Sedans in the Tennessee factory.

Volkswagen AG (NASDAQ:VLKAY), on July 14, further announced that it will establish a center for development and national research in Chattanooga. According to the company, this center will gather data on U.S. priorities, and plan their implementation to the vehicles’ design and built. Almost 200 engineers will work in the center, and they will modify the vehicles to accommodate American’s preferences. The company further stated that the new SUV (Sports utilizing vehicles) that Volkswagen AG (NASDAQ:VLKAY) plans to build in 2016 are being developed for some specific markets: North American vehicle industry.

The automaker company further stated that it will add some space in the Chattanooga factory so that the assembling of SUV can also be accommodated in the factory together with Passat assembly. Sources have it that the company will add around 538,000 square feet in the flooring of the factory.

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News has it that the new SUV will be based on the design of CrossBlue vehicle that was presented in the International Auto Show 2013, held in Detroit. The CrossBlue vehicle had 3 rows, each consisting of 2 seats. Moreover, the concept vehicle had a 60 to 80 mpg range with a powertrain that supported both diesel and electric. However, the VW vans will have a total of 7 seats in 3 rows. As for the engine capacity, the company says that the engine of concept vehicle cannot be installed in the SUV because it will make the vehicle too expensive.

Coming to the stocks of Volkswagen AG (NASDAQ:VLKAY), the company, on the last trade day, July 14, closed its stocks at a price of €185.65, after hitting the highest figures of €186.95. The company has an EPS (earning per share) of €19.36 and a dividend yield of 2.14 percent. Moreover, its price earnings ratio is 9.66. The company has a market capitalization of €86.98 billion.