General Motors vs. Volkswagen: Which Auto Manufacturer is a Better Buy?

Even though the global semiconductor chip shortage is negatively affecting automobile manufacturers’ production, many companies in the space are nonetheless striving to develop efficient and advanced products to tap rising demand. Renowned auto manufacturers Volkswagen (DE:VOWG_p) (VWAGY) and General Motors (GM) are examples. They are both well-positioned to benefit from the industry’s long-term growth prospects. But let’s find out which of these stocks is a better buy now. Read on.Volkswagen AG (OTC:VWAGY) and General Motors Company (NYSE:GM) are two well-established players in the auto manufacturers industry. VWAGY is a Germany-based automobile company that offers passenger cars, commercial vehicles, power engineering, and financial services. GM in Detroit, Mich., designs, manufactures, and sells cars, trucks, crossover vehicles, and related automobile parts worldwide. It also offers vehicle protection, maintenance, satellite radio, and automotive financing services.

While auto production is still suffering from the global semiconductor chip shortage, many auto manufacturers are striving to meet the demand for efficient and advanced products amid the economic recovery and rising discretionary spending. Furthermore, government and private initiatives to address the global chip shortage bode well for the auto industry. Indeed, the U.S. car and automobile manufacturing market is expected to increase 12.3% to $82.60 billion in 2021. Consequently, both VWAGY and GM should see increasing demand for their products.

But while GM's stock has declined 8.2% over the past month, VWAGY's has gained 4.2%. VWAGY is a clear winner with 58% gains versus GM’s negative returns in terms of their past six month’s performance. But, which of these stocks is a better pick now? Let’s find out.

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