FRANKFURT (Reuters) - Volkswagen’s truck unit Traton is expected to price its initial public offering (IPO) this week toward the lower end of the marketing range, people close to the matter said.

FILE PHOTO: Visitors stand at the booth of Volkswagen's truck unit Traton Group, former Volkswagen Truck & Bus AG, in Hanover, Germany September 19, 2018. REUTERS/Fabian Bimmer/File Photo

While demand is sufficient for the stock market flotation to go through, investors are cautious on price, they said.

“Investors are taking advantage of the fact that Volkswagen needs to show progress in its corporate restructuring after calling off the IPO in March and relaunching it now,” one of the people said.

Books are oversubscribed for all the shares on sale, two people said.

Traton declined to comment, while Volkswagen had no immediate comment.

Markets are still receptive to IPOs as volatility remains at relatively low levels, although roughly where it stood in March when Volkswagen pulled the previous IPO attempt, citing market uncertainty.

Global Fashion Group on Tuesday delayed its listing amid subdued investor demand.

Volkswagen said earlier this month it aimed to raise 1.55-1.9 billion euros ($1.8-$2,2 billion) by selling 10%-11.5% of Traton, having scaled back earlier ambitions to list up to a 25% stake.

It has set a 27-33 euros per share price range, which would value Traton at Traton at 13.5-16.5 billion euros, a discount to some industry peers.

The carmaker plans to invest proceeds in transforming its auto production as it readies the launch of dozens of electric vehicles over the coming years and deepens an alliance with Ford Motor Co.