Magna International Inc. (MGA - Free Report) announced its decision to set up two new joint ventures (JVs) with Beijing Electric Vehicle Co. Ltd (BJEV), a subsidiary of BAIC Group, dedicated for electric vehicles (EVs). The JV will engage in developing premium EVs and complete vehicle manufacturing. Additionally, the JVs will also offer engineering and complete-vehicle production capacity to probable customers.
The production of the first batch of vehicles is anticipated to start in 2020. An existing facility of BAIC Group at Zhenjiang, Jiangsu Province will be used to engineer and manufacture vehicles for the JVs. The facility can manufacture approximately 80,000 vehicles per year.
These two JVs mark Magna’s first collaboration to provide vehicles, developed and manufactured outside its manufacturing hub at Graz, Austria. Per management, the JVs will help Magna to produce cars — enabled with conventional, hybrid and electric powertrains — for the Chinese customers.
Magna International Inc. Price and Consensus
Earlier, in April, the company reported that it is co-developing EV architecture with BAIC Group to serve the Chinese auto market. This is the first collaboration by Magna with BAIC Group to strengthen its local footprint in China, world’s leading market for electric mobility. (Read more: Magna & BAIC to Co-Develop EV Architecture for China)
In the past three months, Magna’s stock has moved up 17.7%, outperforming 8.2% increase of the industry it belongs to.
Zacks Rank & Other Stocks to Consider
Currently, Magna has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Oshkosh Corporation (OSK - Free Report) and Ferrari N.V. (RACE - Free Report) . Allison Transmission and Oshkosh sport a Zacks Rank #1 (Strong Buy) while Ferrari carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have risen 13.5% over the past year.
Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 6.9% over the past year.
Ferrari has an expected long-term growth rate of 17.3%. Shares of the company have risen 65.7% over the past year.
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