Scandal-hit Volkswagen (VLKAY) has overtaken rivals in Germany's quarterly earnings race after BMW (BMWYY) rounded out the big three reports with meagre growth Friday, but Mercedes-Benz owner Daimler (DDAIF) may have the inside track.
From the emissions-rigging scandal that has besieged Volkswagen investors, to the potential economic fallout from the U.K.'s Brexit vote in June, German automotive manufacturers have had a torrid time in 2016 - which has prompted double digit losses for the majority of the sector's constituent stocks.
Compounding short term fears is a sense of unease among investors over the longer term and the pace at which the auto heavyweights have begun piling money into R&D projects aimed at securing an edge in the development of electric cars.
Ultimately, production of electric vehicles means tectonic change for supply chains and manufacturing operations, which will have to adjust from a focus on engine production, to battery technology.
Such a shift means significant up-front investment, while little evidence exists to date to suggest that an already-low-margin industry will be able to drive mass adoption and meet market demand in a commercially viable manner.
For the three months ending in September, Volkswagen reported 4.4% growth in volumes, with 2.4 million vehicles sold. It also delivered a 21% beat to consensus estimates of adjusted operating profit while management said that full year operating profit growth will be at the higher end of the forecast 5% - 6% range.
The result was the strongest reported by any German car maker, in headline terms, but it failed to lift the shares as investors proved skeptical of the beat and were cautious of pushing the stock higher with U.S. litigation risk still hanging over the brand.