Cummins Inc. (CMI Quick QuoteCMI - Free Report) announced that it will form a 50:50 joint venture (JV) with Anhui Jianghuai Automobile Co. Ltd. (JAC Motors). Additionally, Cummins acquired 50% equity of JAC-Navistar Diesel Engine Company from Navistar International Corporation . JAC Motors is an auto manufacturer with full-line independent brands in China.

Per management, both the companies believe in similar values and focus on offering right power solutions to their customers. The JV will help both the companies to develop and offer fuel-efficient and high-quality products, thereby enabling them to be more competitive in their markets. Further, the JV will continue developing products that meet the guidelines of NS VI standards and provide leading NS V diesel engines to its customers.

At present, Cummins provides light, mid and heavy-duty engines to JAC Motors, which helps the latter to supply its products in China and internationally. The new JV will continue its operations at the manufacturing hub in Hefei.

Cummins Inc. Price and Consensus

Cummins Inc. Price and Consensus | Cummins Inc. Quote

Change in the ownership of the joint venture is subject to regulatory approval. Also, operations of the newly-formed JV will commence after the completion of the approval.

Price Performance

Year to date, Cummins’ stock has declined 18%, underperforming 2.4% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

Both Navistar and Cummins currently carry a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fiat Chrysler Automobiles N.V. and BMW AG (BAMXF Quick QuoteBAMXF - Free Report) . Fiat Chrysler sports a Zacks Rank #1 (Strong Buy), while BMW carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fiat Chrysler has an expected long-term growth rate of 23.7%. In a year’s time, shares of the company have gained 106.3%.

BMW has an expected long-term growth rate of 4.5%. Shares of the company have risen 14% over the past year.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>