General Motors Company (GM - Free Report) has announced that it teamed up with Honda Motor Co., Ltd. (HMC - Free Report) to pursue the common objective of transforming mobility by rapidly developing autonomous vehicle technology. Japanese auto giant Honda will work closely with General Motors’ autonomous vehicle unit, General Motors Cruise Holdings, to develop autonomous vehicle for Cruise that can be manufactured in large numbers for global deployment. Additionally, the companies plan to explore global opportunities for commercial deployment of Cruise network.
Honda, which is lagging behind many of its rivals that are also developing self-driving technology, is likely to invest $2.75 billion and hold 5.7% stake in Cruise. Honda is contributing $750 million upfront for the equity stake in Cruise and is going to pay another $2 billion over the span of 12 years for development initiatives.
Notably, in 2016, General Motors acquired Cruise, which used to be called Cruise Automation, for $1 billion. In early 2018, in a bid to speed up development of its self-driving technology, General Motors brought in Japanese tech and investment firm Softbank, which invested $2.25 billion in Cruise. Alongside sharing expenses, Honda will offer its expertise to manufacture and engineer compact vehicles.
Year to date, shares of General Motors and Honda have declined 17.1% and 13.9%, respectively.
Zacks Rank & Stocks to Consider
While Honda currently has a Zacks Rank #3 (Hold), General Motors carries a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) and Navistar International Corporation (NAV - Free Report) . While Allison Transmission sports a Zacks Rank #1 (Strong Buy), Navistar carries a Zacks Rank #2 (Buy). 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%. Over the past six months, shares of the company have surged 35%.
Navistar has an expected long-term growth rate of 5%. Over the past six months, shares of the company have risen 7.9%.
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