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Magna, Altran Form JV to Set Up Engineering Center in Morocco

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Magna International Inc.’s (MGA - Free Report) complete vehicle engineering and manufacturing group has formed a 50:50 joint venture (JV) with Altran Technologies SA. Altran is a leading provider of engineering and R&D services.

Located in Casablanca, Morocco, the JV will combine Magna’s knowledge on complete vehicle manufacturing and process competence with Altran’s locally available strength. To be named MG2, the JV will initially form a team, with roughly 500 engineers from the companies.

Per management, the JV will enable Magna to fortify its competitive spot in Morocco, with its top-notch engineering services. Further, Magna’s decision to select Morocco for the new engineering center is driven by the country’s presence near Europe, mounting OEM presence and accessibility of good engineering talent.

Magna International Inc. Price and Consensus

 

Placed 14km south of the European continent, Morocco provides cost-saving base for automakers to manufacture and export vehicles to Europe. This attracted auto manufacturers to invest in production hubs in the region. By 2025, the country aims to reach the goal of producing one million vehicles.

Magna is focusing to expand its footprint in different regions as well as developing technologies for growth. In June 2018, the company announced its decision to acquire Italy-based OLSA S.p.A., with an aim to expand its portfolio of lighting capabilities. Similarly, to fortify its presence in China, the company plans to develop electric vehicle architecture with BAIC Group, specifically for the China market.

Price Performance

In the past three months, Magna’s stock has lost 7.9%, underperforming 5.6% decrease recorded by the industry it belongs to.

 



Zacks Rank & Key Picks

Magna currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are AutoZone, Inc. (AZO - Free Report) , Navistar International Corporation and Advance Auto Parts, Inc. (AAP - Free Report) . AutoZone and Navistar presently carry a Zacks Rank #2 (Buy) while Advance Auto Parts sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone has an expected long-term growth rate of 12.2%. Over the past three months, shares of the company have gained 13%.

Navistar has an expected long-term growth rate of 5%. Shares of the company have increased 7.9% over the past six months.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Shares of the company have increased 23.4% over the past three months.

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