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Auto Stock Roundup: Mobility Services to Expand, LEA, PAG & ALV in Focus

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IHS Markit reveals that mobility services will emerge as a huge industry by 2040, with China as the frontrunner.

The readiness with respect to autonomous vehicles continued in the past month. In fact, per a study by IHS Markit, mobility services will emerge as a huge industry by 2040, with China as the frontrunner.

New mobility services offer customers temporary use of a car that they do not own. Presently, these services are provided through app-based ride-hailing or car-sharing services, such as those offered by Didi Chuxing in China and Uber and Lyft elsewhere. In the coming days, a bouquet of mobility services is likely to emerge.

Leading automakers across the globe are making concerted efforts toward this goal. Per a Reuters report, Ford Motor Company F will start testing its most recent autonomous vehicle technology by 2018. However, the commercial production of self-driving vehicles is not expected before 2021. Notably, General Motors Company GM has already taken significant steps in this regard.

(Read the previous roundup here: Auto Stock Roundup for Dec 7, 2017)

Recap of the Week’s Most Important Stories

1.    Per Reuters, Ford will start testing its most recent autonomous vehicle technology by 2018. However, the commercial production of self-driving vehicles is not expected before 2021.

The company has plans of testing these autonomous vehicle prototypes in a variety of pilot programs in association with partners, namely Lyft, Inc. and Domino's Pizza Inc.

Also, Ford changed plans of manufacturing electric vehicles at the Flat Rock, MI plant to focus more on the production of its all-new autonomous vehicles at the same site.

Prior to this in January, the company had invested $700 million to renovate and expand its Flat Rock Assembly Plant in Michigan for production of its new electric vehicles. However, with greater focus on autonomous vehicles, the company is expected to pump another $900 million into the plant (read more: Ford Set to Put New Autonomous Vehicle Technology on Trial).
Currently Ford has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

2.    Lear Corp. LEA has inked a deal to acquire Israel-based EXO Technologies, engaged in developing innovative software-based solutions for GPS. The acquisition is likely to provide Lear with a different technology to considerably enhance GPS accuracy and reliability. This will in turn improve vehicle safety and assist in autonomous driving.

With its operations in San Mateo, California and Tel Aviv, Israel, EXO Technologies offers precise solutions for autonomous and connected vehicle applications. This tie up is likely to bolster Lear’s connectivity capabilities and aid its E-Systems business, as growth of autonomous and connected vehicles will boost demand for improved reliability and accuracy in vehicle positioning (read more: Lear Set to Acquire EXO Technologies to Boost GPS Capability).

Currently Lear has a Zacks Rank #3.

3.    Penske Automotive Group, Inc. PAG has inked a deal to acquire The Car People Ltd., one of the leading sellers of used vehicles in the United Kingdom. The acquisition will allow Penske Automotive to bolster its presence in its second largest market, United Kingdom.

Set up in 2000, The Car People is a retailer of top-quality used vehicles sold at fixed prices. The company has its retail location across four cities namely, Wakefield, Sheffield, Manchester and Warrington.

Per management, the buyout of The Car People will help Penske Automotive significantly expand its U.K.-based used car supermarket business, support its diversification approach in the transportation industry as well as nurture its used car business.

Notably, in January and February, the company had acquired two used vehicle sellers, CarSense and CarShop, in the United States and the United Kingdom, respectively (read more: Penske Automotive Set to Acquire U.K.'s The Car People).

Currently Penske Automotive has a Zacks Rank #3.

4.    Autoliv, Inc. ALV announced that its board has completed its planned review of the company’s operational efficiency and has decided to move forward with the public listing of the company’s Electronics business segment. The listing is expected to conclude by the third quarter of 2018.

Autoliv’s Electronics business is one of the two operating segments within the company that offers restraint control, sensing and brake systems.

While the other segment is called Passive Safety, offering airbag systems, steering wheels and seatbelts.

In September, the company had informed to conduct a strategic evaluation of its operating structure and look into the possibilities of creating a separate entity with the Electronics business unit.

The key factors behind this spin-off decision include varying technological advancements and skill set needs, different sales growth rates, market requirements etc (read more: Autoliv to Embark on Electronics Business Listing).

Currently Autoliv has a Zacks Rank #3.

5.    Per Reuters, Volkswagen AG has decided to stop the delivery of T6 multivan to dealers. The auto maker made this announcement after it found that the diesel model caused high emission of nitrogen oxide. KBA, the German automotive regular, was informed about this development by Volkswagen.

Notably, two years ago, Volkswagen admitted to the U.S. authorities that they have used ‘defeat device’ or software in diesel engines.

A couple of days ago, a US-based Volkswagen AG executive — who supervised emissions-related issues — was sentenced to seven years of imprisonment for his role in a diesel emissions scandal. A penalty of $400,000 was also imposed on him.

In fact, the diesel emission scandals have been plaguing the German automaker for quite some time. Huge costs associated with these scandals are likely to have an adverse impact on the company (read more: Volkswagen Halts T6 Multivan Deliveries Due to High Emission).

Currently Volkswagen has a Zacks Rank #3.


Company Last Week Last 6 Months
GM -0.9% 19.6%
F 2% 12.5%
TSLA 8.2% -11%
TM 1.6% 17.1%
HMC 1.8% 20.2%
HOG 0.3% -4.3%
AAP 5.1% -21.5%
AZO 1.4% 16.4%

Last week, the steepest increase was registered by Tesla, Inc. TSLA and among those stocks only General Motors witnessed a decline.

In the last six months, the steepest increase and the sharpest decline were witnessed by Honda Motor Co., Ltd. HMC and Advance Auto Parts, Inc., respectively.

What’s Next in the Auto Space?

Watch out for the usual news releases of other auto companies over the next week.

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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
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Autoliv, Inc. (ALV) : Free Stock Analysis Report
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