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Toyota, SoftBank to Form JV for Autonomous Mobility Services

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Toyota Motor Corporation (TM - Free Report) is starting a joint venture (JV) with SoftBank Corp. (SFTBY - Free Report) to develop autonomous vehicle services, per Reuters. With increasing competition to develop autonomous car technology, many automakers are collaborating with technology companies to be at par with competitors. This is one of many such collaborations taking place globally.

MONET, the JV will start its operation with an initial investment of ¥2 billion ($17.5 million). At first, the joint company will focus on Japan and in the course of time will spread out globally. Toyota and SoftBank intend to develop a platform to operate autonomous cars, which can be used for services that include - mobile shops, hospitals and other services.

Toyota Motor Corporation Price and Consensus

 

The collaboration will develop Toyota’s e-Palette concept-based multi-purpose mobility service, along with software and hardware required for convoys for bus-sized shuttle and autonomous multi-purpose vehicles. Further, SoftBank will provide technology that will allow collating and analyzing of transportation data, enabling to dispatch cars competently when needed.

The collaboration, between a big automaker and a powerful technology firm, confirms that even such well-financed companies rely on sharing expenses and skills to develop automotive technologies. Due to less consumer experience, investments involved in pursuing such developments make it a risky bet.

Per a senior analyst of SBI Securities, the partnership will enable Toyota to increase revenues by combining data with SoftBank. Moreover, this will allow SoftBank to engage in developing platforms for transportation services.

Price Performance

In the past six months, Toyota’s stock has lost 2.6%, outperforming 9.1% decrease recorded by the industry it belongs to.

 



Zacks Rank & Key Picks

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

Navistar has an expected long-term growth rate of 5%. Shares of the company have increased 9.7% over the past six months.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Shares of the company have increased 48.1% over the past six months.

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