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Auto Roundup: STLA Inks Deal With SIXT, ALSN Wins $83.3M Contract & More
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Last week, the European Automobile Manufacturers Association released data for new car registrations for December and full-year 2023. Registrations of new cars in the European Union (EU) declined 3.3% in December to 867,052 units, snapping a 16-month-long growth record. During the month, key markets like France and Spain recorded double-digit percentage increases of 14.5% and 10.6%, respectively, while registrations in Germany plunged 23%.
For the full year, sales grew 13.9% to 10.5 million units. The four key markets, including Spain, Italy, France and Germany, witnessed year-over-year registration growth of 16.7%, 18.9%, 16.1% and 7.3%, respectively. Notably, all EU markets witnessed growth except Hungary, which saw its registrations decline 3.4% in 2023.
On the news front, Italian-American automaker Stellantis (STLA - Free Report) and premium mobility service provider SIXT inked a deal, enabling the latter to acquire up to 250,000 Stellantis vehicles for its rental fleet, thus fostering a strategic partnership focused on cutting-edge technologies and customer-centric approaches.
In light of slower-than-expected customer demand for electric vehicles (“EVs”), U.S. auto giant Ford (F - Free Report) is set to reduce the production of F-150 Lightning in Michigan.
Leading engine maker Cummins (CMI - Free Report) , commercial vehicle manufacturer Daimler Truck AG and trucking giant PACCAR (PCAR - Free Report) have chosen Mississippi for their battery joint venture (JV). Battery cell production at the factory is set to begin in 2027.
Truck transmission manufacturer Allison Transmission (ALSN - Free Report) clinched an $83.3 million contract to supply upgraded X1100 transmissions for the U.S. Army's Abrams Main Battle Tank.
Stellantis and SIXT have entered into a significant multi-billion-euro agreement, per which SIXT will buy up to 250,000 Stellantis vehicles for its rental fleet across Europe and North America by 2026. The collaboration aligns with both companies' commitment to ambitious decarbonization strategies and customer-centric approaches, emphasizing cutting-edge technologies. The first substantial deliveries are expected in the first quarter of 2024, covering a diverse range of Stellantis brands and vehicle classes, from city cars to SUVs, vans and trucks, including electric vehicles.
SIXT rental customers will have access to an attractive selection of Stellantis brands, such as Alfa Romeo, Chrysler, Jeep and Peugeot. The partnership not only accelerates SIXT's growth strategy but also enables flexible agreements on order quantities, compositions and delivery dates beyond the initial 2024 volumes.
Furthermore, Stellantis and SIXT will be collaborating on data services, with Mobilisights, Stellantis' data as a service (DaaS) business, offering innovative B2B products and services. The collaboration aims to increase the number of fully connected vehicles in the SIXT fleet, enhancing customer experience through streamlined processes and improved vehicle availability.
Ford will cut one of the two production shifts at its Rouge Electric Vehicle Center in Michigan that builds the all-electric F-150 Lightning. The company intends to match customer demand by lowering production. Ford has been manufacturing the F-150 Lightning since April 2022. In 2023, the company sold 24,000 F-150 Lightning units. This represented a small fraction of Ford's overall F-series pickup sales, which exceeded 750,000 units. Sales of F-150 Lightning increased 55% year over year in 2023. While the company expects further growth in the model’s sales this year, reportedly, it is not likely to reach the 150,000-production rate targeted during the plant's upgrade last year.
The decrease in production of the F-150 Lightning will impact 1,400 workers. Half of these workers will be transferred to the Michigan Assembly Plant, where Ford will increase the production of gasoline-powered Ford Bronco and Ranger models. Other workers will be shifted to nearby plants or are expected to avail of the Special Retirement Incentive Program per the 2023 Ford-United Auto Workers agreement.
Last year, Bronco and Ranger sales went down 9.7% and 43.3%, respectively. The factory that manufactures both vehicles was affected by a six-week United Automobile Workers strike. The company will add a third shift to its Michigan Assembly Plant this summer to increase the production of Bronco and Ranger. It will add 900 jobs to this plant.
Cummins’ Accelera, PACCAR and Daimler have opted for Marshall County, MS, as the future site for their JV’s advanced battery cell manufacturing. The investment for the factory in Mississippi is estimated to be in the range of $2-$3 billion. The 21-gigawatt hour (GWh) factory is expected to commence battery cell production in 2027. The collaboration aims to localize battery cell production for commercial EVs. It will foster economic growth, create over 2,000 manufacturing jobs in the United States and support the adoption of electric vehicles in medium- and heavy-duty commercial transportation.
The JV — in which Accelera, Daimler Truck and PACCAR will each hold a 30% stake — was first announced in September 2023. It will focus on lithium-iron-phosphate (LFP) battery technology for commercial battery-electric trucks. This LFP battery produced by the JV will have an edge over other battery chemistries. The battery will be safer, more durable and comparatively cheaper, and it won’t require raw materials like nickel and cobalt. EVE Energy, a global technology leader in LFP battery cells, will be a key partner in the venture, contributing industry-leading battery cell design and manufacturing expertise.
The JV between Accelera, Daimler Truck and PACCAR, with the support of EVE Energy, represents a collaborative effort to create cutting-edge battery cell technology, generate employment opportunities and contribute to the global effort to reduce carbon emissions. The transaction is subject to customary closing requirements and regulatory approvals.
Allison secured an $83.3 million contract to supply upgraded and new X1100 transmissions for the U.S. Army's Abrams Main Battle Tank variants and Foreign Military Sales customers. The contract involves delivering these transmissions throughout 2024, aligning with the performance demands of the Abrams tank. The upgrade program integrates new components with existing customer hardware, providing a zero-mileage transmission for the Abrams System Enhancement Package version 3 tanks, achieving significant cost savings for customers.
The Abrams tank, renowned for its capabilities, has undergone numerous enhancements to maintain its status as the world's most capable tank. Allison's commitment to quality and reliability supports U.S. Army’s readiness goals and evolving warfighter demands. The deliveries under the contract are scheduled from January to December 2024, reinforcing Allison's longstanding relationship with the U.S. Army.
In a separate news, Allison announced the ratification of a new agreement with the International United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW) Local 933. Covering approximately 1,600 UAW-represented employees in Indianapolis, IN, the four-year agreement, expiring on Nov 14, 2027, signifies a collaborative effort toward employee well-being and the company's future growth.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
The fourth-quarter 2023 earnings season for the auto sector starts today. Watch out for the quarterly releases of EV king Tesla and auto equipment providers Autoliv and Gentex.
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Auto Roundup: STLA Inks Deal With SIXT, ALSN Wins $83.3M Contract & More
Last week, the European Automobile Manufacturers Association released data for new car registrations for December and full-year 2023. Registrations of new cars in the European Union (EU) declined 3.3% in December to 867,052 units, snapping a 16-month-long growth record. During the month, key markets like France and Spain recorded double-digit percentage increases of 14.5% and 10.6%, respectively, while registrations in Germany plunged 23%.
For the full year, sales grew 13.9% to 10.5 million units. The four key markets, including Spain, Italy, France and Germany, witnessed year-over-year registration growth of 16.7%, 18.9%, 16.1% and 7.3%, respectively. Notably, all EU markets witnessed growth except Hungary, which saw its registrations decline 3.4% in 2023.
On the news front, Italian-American automaker Stellantis (STLA - Free Report) and premium mobility service provider SIXT inked a deal, enabling the latter to acquire up to 250,000 Stellantis vehicles for its rental fleet, thus fostering a strategic partnership focused on cutting-edge technologies and customer-centric approaches.
In light of slower-than-expected customer demand for electric vehicles (“EVs”), U.S. auto giant Ford (F - Free Report) is set to reduce the production of F-150 Lightning in Michigan.
Leading engine maker Cummins (CMI - Free Report) , commercial vehicle manufacturer Daimler Truck AG and trucking giant PACCAR (PCAR - Free Report) have chosen Mississippi for their battery joint venture (JV). Battery cell production at the factory is set to begin in 2027.
Truck transmission manufacturer Allison Transmission (ALSN - Free Report) clinched an $83.3 million contract to supply upgraded X1100 transmissions for the U.S. Army's Abrams Main Battle Tank.
STLA, CMI, PCAR, ALSN and F currently carry a Zacks Rank #3 (Hold), each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Last Week’s Top Stories
Stellantis and SIXT have entered into a significant multi-billion-euro agreement, per which SIXT will buy up to 250,000 Stellantis vehicles for its rental fleet across Europe and North America by 2026. The collaboration aligns with both companies' commitment to ambitious decarbonization strategies and customer-centric approaches, emphasizing cutting-edge technologies. The first substantial deliveries are expected in the first quarter of 2024, covering a diverse range of Stellantis brands and vehicle classes, from city cars to SUVs, vans and trucks, including electric vehicles.
SIXT rental customers will have access to an attractive selection of Stellantis brands, such as Alfa Romeo, Chrysler, Jeep and Peugeot. The partnership not only accelerates SIXT's growth strategy but also enables flexible agreements on order quantities, compositions and delivery dates beyond the initial 2024 volumes.
Furthermore, Stellantis and SIXT will be collaborating on data services, with Mobilisights, Stellantis' data as a service (DaaS) business, offering innovative B2B products and services. The collaboration aims to increase the number of fully connected vehicles in the SIXT fleet, enhancing customer experience through streamlined processes and improved vehicle availability.
Ford will cut one of the two production shifts at its Rouge Electric Vehicle Center in Michigan that builds the all-electric F-150 Lightning. The company intends to match customer demand by lowering production. Ford has been manufacturing the F-150 Lightning since April 2022. In 2023, the company sold 24,000 F-150 Lightning units. This represented a small fraction of Ford's overall F-series pickup sales, which exceeded 750,000 units. Sales of F-150 Lightning increased 55% year over year in 2023. While the company expects further growth in the model’s sales this year, reportedly, it is not likely to reach the 150,000-production rate targeted during the plant's upgrade last year.
The decrease in production of the F-150 Lightning will impact 1,400 workers. Half of these workers will be transferred to the Michigan Assembly Plant, where Ford will increase the production of gasoline-powered Ford Bronco and Ranger models. Other workers will be shifted to nearby plants or are expected to avail of the Special Retirement Incentive Program per the 2023 Ford-United Auto Workers agreement.
Last year, Bronco and Ranger sales went down 9.7% and 43.3%, respectively. The factory that manufactures both vehicles was affected by a six-week United Automobile Workers strike. The company will add a third shift to its Michigan Assembly Plant this summer to increase the production of Bronco and Ranger. It will add 900 jobs to this plant.
Cummins’ Accelera, PACCAR and Daimler have opted for Marshall County, MS, as the future site for their JV’s advanced battery cell manufacturing. The investment for the factory in Mississippi is estimated to be in the range of $2-$3 billion. The 21-gigawatt hour (GWh) factory is expected to commence battery cell production in 2027. The collaboration aims to localize battery cell production for commercial EVs. It will foster economic growth, create over 2,000 manufacturing jobs in the United States and support the adoption of electric vehicles in medium- and heavy-duty commercial transportation.
The JV — in which Accelera, Daimler Truck and PACCAR will each hold a 30% stake — was first announced in September 2023. It will focus on lithium-iron-phosphate (LFP) battery technology for commercial battery-electric trucks. This LFP battery produced by the JV will have an edge over other battery chemistries. The battery will be safer, more durable and comparatively cheaper, and it won’t require raw materials like nickel and cobalt. EVE Energy, a global technology leader in LFP battery cells, will be a key partner in the venture, contributing industry-leading battery cell design and manufacturing expertise.
The JV between Accelera, Daimler Truck and PACCAR, with the support of EVE Energy, represents a collaborative effort to create cutting-edge battery cell technology, generate employment opportunities and contribute to the global effort to reduce carbon emissions. The transaction is subject to customary closing requirements and regulatory approvals.
Allison secured an $83.3 million contract to supply upgraded and new X1100 transmissions for the U.S. Army's Abrams Main Battle Tank variants and Foreign Military Sales customers. The contract involves delivering these transmissions throughout 2024, aligning with the performance demands of the Abrams tank. The upgrade program integrates new components with existing customer hardware, providing a zero-mileage transmission for the Abrams System Enhancement Package version 3 tanks, achieving significant cost savings for customers.
The Abrams tank, renowned for its capabilities, has undergone numerous enhancements to maintain its status as the world's most capable tank. Allison's commitment to quality and reliability supports U.S. Army’s readiness goals and evolving warfighter demands. The deliveries under the contract are scheduled from January to December 2024, reinforcing Allison's longstanding relationship with the U.S. Army.
In a separate news, Allison announced the ratification of a new agreement with the International United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW) Local 933. Covering approximately 1,600 UAW-represented employees in Indianapolis, IN, the four-year agreement, expiring on Nov 14, 2027, signifies a collaborative effort toward employee well-being and the company's future growth.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
The fourth-quarter 2023 earnings season for the auto sector starts today. Watch out for the quarterly releases of EV king Tesla and auto equipment providers Autoliv and Gentex.