Tesla, Inc. TSLA is likely to raise production at its California car plant and has decided to hire more employees, per Bloomberg. Notably, in second-quarter 2019, the electric vehicle maker registered a record number of deliveries. After several job cuts in the past year, the company has reversed its stance. Its decision to increase production indicates that it is confident about the sustainability in demand for Model 3 vehicles.
BMW AG BAMXF and Daimler AG DDAIF have planned to collaborate on developing automated driving technology, per Reuters. The alliance aims to develop driver-assistance systems technologies — automated driving on highways and parking.
Volkswagen AG VWAGY and Ford Motor Company F have reached an outline agreement to share self-driving and electric vehicle technologies. The agreement is likely to deepen the existing partnership between these two major auto giants to produce pickup trucks.
Recap of the Week’s Most Important Stories
1. Volkswagen and Ford reached an outline agreement to share technologies related to self-driving and electric vehicles, per Reuters. The agreement is likely to deepen the existing partnership between these two major auto giants to produce pickup trucks.
Volkswagen is likely to discuss this agreement on Jul 11, 2019. The company will likely share a modular electric car (“MEB”) platform with Ford.
The global automotive industry is in a transitional phase. However, a rapid move toward new autonomous and electric vehicles may have dangerous implications for automakers. Future uncertainties and huge pressure prompted automakers to cooperate.
Importantly, in January 2019, Ford and Volkswagen made the announcement to cooperate on the production of vans and pickup trucks. Now, these two automakers are trying to form an agreement for the development of autonomous vehicles and production of electric cars. (Read more: Volkswagen, Ford to Share Autonomous, Electric Car Technology)
Currently, while Ford sports a Zacks Rank #1 (Strong Buy), Volkswagen carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
2. BMW and Daimler intend to partner in developing automated driving technology, per Reuters. Around 1,200 developers will work together from both firms to develop new systems.
Notably, the alliance aims to develop driver-assistance system technologies — automated driving on highways and parking. Both German auto giants will implement the automation technologies in their vehicles independently.
BMW and Daimler finalized the agreement. They expect to deploy the new technology in mass-market vehicles from 2024.
Headwinds arising from international trade conflict and shrinking margins due to emissions legislation led both carmakers to pool their development resources.
Daimler, for the third time in 12 months, issued a profit warning, stating that it was setting aside hundreds of millions of euros to cover a regulatory crackdown on diesel emissions. In May, BMW issued a profit caution, stating that it made larger-than-expected investments. In fact, the company had issued profit warnings previously.
In February 2019, both companies entered a partnership for the development of self-driving technology. The aim of this partnership is to make autonomous driving technologies mainstream by the middle of the next decade. (Read more: BMW & Daimler to Collaborate for Automated Driving Technology)
While Daimler currently has a Zacks Rank #3, BMW carries a Zacks Rank #4 (Sell).
3. Group 1 Automotive, Inc. GPI acquired two BMW/MINI dealerships and expanded business presence in the New Mexico area. The addition of these two dealerships, situated in Albuquerque and Santa Fe, is likely to generate annual revenues of $100 million.
These dealerships represent the only BMW and MINI franchises in the state of New Mexico. The acquisition also includes BMW Motorrad franchises in Albuquerque and Santa Fe, which makes the company the exclusive seller of BMW Motorcycles in New Mexico. These stores are part of Group 1 Automotive’s first motorcycle franchise in the United States.
Notably, the company regularly acquires and divests dealerships and franchises to expand business. Over the past few years, it has expanded footprint in the U.K. through acquisitions. With roughly 50 dealerships in the region, the company is well placed in Europe. After its U.K. expansion, Group 1 Automotive plans to further improve presence in the United States. For the short term, it aims to acquire attractive businesses in the U.S. markets that hold good growth opportunities, while divesting the unprofitable ones. (Read more: Group 1 Automotive Adds Two Dealerships in New Mexico Market)
Currently, Group 1 Automotive has a Zacks Rank #3.
4. Tesla is likely to raise production at its California car plant and is planning to hire more employees, per Bloomberg. Notably, in second-quarter 2019, the electric vehicle maker registered a record number of deliveries. After several job cuts in the past year, the company has reversed its stance. Its decision to increase production indicates that it is confident about the sustainability in demand for Model 3 vehicles.
Notably, in second-quarter 2019, the company posted record 95,200 Model 3 deliveries. However, during the same time frame, it delivered total 17,650 Model S sedans and Model X crossovers, down 21% year over year. In fact, the record sedan delivery is aiding the company to overcome waning Model S sales.
Tesla currently carries a Zacks Rank #3.
In the past week, while Tesla stock has gained the most, Advance Auto Parts, Inc. AAP declined the most.
In the past six months, Tesla has declined the most while AutoZone, Inc. AZO recorded maximum gain.
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What’s Next in the Auto Space?
Watch out for the usual news releases over the next week.
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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
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