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Honda to Invest $150M in US Plants for 10-Speed Transmission

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Honda Motor Co., Ltd. (HMC - Free Report) announced its investment of $150 million in two U.S. plants, mainly for the production of 10-speed automatic transmissions, which will be used in front-wheel-drive vehicles.

Of the total investment, $100 million has been invested in a new assembly line and production modifications at the Honda Precision Parts of Georgia LLC in Tallapoosa, Georgia.

The remaining $49 million will be utilized at Honda Transmission Mfg. of America Inc in Russells Point, OH. The funds will be used to provide new equipment and increase production capacity.

Honda will be installing the 10-speed automatic transmission in the 2018 Honda Odyssey initially. Other models that will be installed with the transmission have not been revealed yet.

Automakers, Ford Motor Company (F - Free Report) and General Motors Company (GM - Free Report) have jointly developed a ten-speed automatic transmission which has recently been incorporated in many U.S. rear-wheel-drive vehicles, including the 2017 Ford F-150 pickup truck and the 2017 Chevrolet Camaro sports car.
 

Price Performance

The performance of Honda’s shares has been better than the Zacks categorized Auto Manufacturers-Foreign industry over the last three months. While the company’s shares rallied 2.4%, the industry declined 6.1%. The outperformance stemmed from the company’s better-than-expected earnings report in the last quarter.


Zacks Rank & Other Key Picks

Honda currently carries a Zacks Rank #2 (Buy).

Other favorably ranked companies in the auto space include Lear Corporation (LEA - Free Report) , and General Motors. Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, Lear Corporation and General Motors expect earnings growth of around 8.9% and 9.4%, respectively.  

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