Toyota Motor Corporation (TM - Free Report) and Subaru Corp intend to develop battery-electric sports utility vehicle (SUV) in a joint platform, per Reuters. The underlying idea is to share huge costs involved in the production of low-emission vehicles.
In recent times, auto giants across the globe are competing fiercely with each other for the development of new vehicle technologies, including all-battery electric cars and autonomous vehicles. Not to mention, development of this new technology requires huge investment. Toyota has been scouting for partnerships in the areas of new technologies, even from the rival companies, in order to reduce capital expenditure.
In one hand, though Toyota holds the edge in technologies for hybrid and fuel cell vehicles, it is trailing in the areas of bringing fully electric vehicles to showrooms. On the other hand, Subaru is struggling to independently invest in and develop lower-emission vehicles, and on-demand transportation services. However, the partnership opens up the opportunity to combine Toyota’s vehicle electrification technologies with Subaru’s all-wheel-drive technologies. However, the automakers stated that each of them will sell vehicles under their own brands.
In the past three months, shares of Toyota have outperformed the industry it belongs to. Over this time frame, the stock has gained 3.1% against the industry’s decline of 2.7%.
Toyota currently has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the auto space are AutoZone, Inc. (AZO - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Cummins Inc. (CMI - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AutoZone has an expected long-term growth rate of 12.2%. Over the past three months, shares of the company have gained 16.7%.
Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 10%.
Cummins has an expected long-term growth rate of 8%. Over the past three months, shares of the company have gained 4%.
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