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Nissan (NSANY) Initiates Production of E-Sedan for China

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Nissan Motor Company (NSANY - Free Report) has started manufacturing its first electric sedan, Sylphy Zero Emission, for the China market, per AP. The new sedan model, based on Nissan's Leaf, will be produced by the company and its Chinese partner DongFeng Motor Group Co., Ltd. (Dongfeng).

Nissan assumes Sylphy is going to be a key player in the electric vehicle (EV) market. The model is priced at 166,000 yuan ($25,850) after considering the government subsidies. With a pricing just over half of the Chinese edition of Nissan’s Leaf, it can run 210 miles (338 kilometers) on a single charge. Further, the company announced its target to launch a range of EVs that will attract customers from all the market segments.

In order to curb air pollution that is worsening, China’s government is encouraging customers to opt for EVs while making it tougher for the automakers by introducing stricter fuel efficiency standards and sales quotas. Per the sales quota regulation to be effective from 2019, every brand has to sell a minimum number of new-energy vehicles every year and has to attain a new-energy vehicle credit score. If an automaker fails to do so, it has to buy credits from its competitors. This has pressurized the vehicle manufacturers to produce models per the requirements of Chinese customers at an affordable price.

Nissan Motor Co. Price and Consensus

 

Except for Nissan, other automakers are also raising their vehicle production in China to grab a slice of the world’s largest electric-vehicle market.

In July, the sales of full-electric and gasoline-electric hybrids in China witnessed rise of 47.7% year over year to 84,000 units. This rise was driven by subsidies and other government support.

Price Performance

In the past six months, Nissan’s stock has lost 11.1%, outperforming 13.6% decline recorded by the industry it belongs to.

 



Zacks Rank & Other Key Picks

Nissan currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Fox Factory Holdings Corporation (FOXF - Free Report) and PACCAR Inc. (PCAR - Free Report) . Allison Transmission and Fox Factory sport a Zacks Rank #1 (Strong Buy) while PACCAR 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 23.9% in the past six months.

Fox Factory has an expected long-term growth rate of 16.8%. Over the past six months, shares of the company have gained 72.4%.

PACCAR has an expected long-term growth rate of 10.8%. Over the past year, shares of the company have gained 4.7%.

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