Magna International Inc. (MGA - Free Report) reported that it will co-develop next-generation electric vehicle (EV) architecture with Beijing Automotive Industry Holding Co., Ltd. (BAIC Group) to serve the Chinese auto market. The agreement was signed on Apr 8 in Beijing, China. This marks the first project that Magna undertook with BAIC Group to assist their electrification plan.
BAIC Group, a leading passenger car manufacturer, has chosen Magna Steyr, a subsidiary of Magna International, primarily due to the cost-effective and innovative offerings all through the vehicle-manufacturing process and engineering services. Additionally, Magna offers lightweight technologies and full-scale electronic/electrical architecture.
Currently, the Chinese market is world’s leading market for electric mobility, which bought roughly 700,000 electrified cars in 2017. Further, by 2020, the amount of all-electric cars on the roads of China is anticipated to reach roughly five million, supported by quotas and subsidies offered by the government.
Magna International Inc. Price and Consensus
Per management, this collaboration is a step toward Magna’s effort of vehicle electrification for China.
This is not the first collaboration that Magna undertook to expand its electrified powertrain offerings and strengthen its local footprint in China. Earlier in October 2017, Magna entered into a joint-venture with China’s Huayu Automotive Systems Co., Ltd. to manufacture electric-drive powertrain system.
In the last six months, shares of Magna have outperformed the industry it belongs to. During the period, its stock has increased 9% compared with the industry’s decline of 1%.
Zacks Rank & Key Picks
Magna carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Tenneco Inc. (TEN - Free Report) , Toyota Motor Corporation (TM - Free Report) and Spartan Motors, Inc. (SPAR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tenneco has expected long-term growth rate of 13.5%. Over a month, shares of the company have gained 4.7%.
Toyota has expected long-term growth rate of 6.1%. In the last six months, shares of the company have risen 4.1%.
Spartan Motors has expected long-term growth rate of 15%. Shares of the company have risen 13.6% over the last three months.
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