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Ford, Volkswagen Explore Alliance for Commercial Vehicles

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Ford Motor Company F and Volkswagen AG VLKAY are mulling over forming an alliance on a range of activities, including the development of commercial vehicles, per Reuters. The alliance would aid both the companies to compete effectively in the global market, which is increasingly demanding high-tech and efficient lower-emission vehicles.

Thomas Sedran, the head of the German automaker Volkswagen’s strategy division, noted that the two companies have “strong and complementary positions in different commercial vehicle segments already.” Moreover, the U.S. auto giant, Ford is a dominant player in the medium-duty truck market in the United States and its F-series pickup has been the best-selling vehicle in the country for decades. On the other hand, Volkswagen, which owns MAN and Scania truck brands in Europe, formed a commercial-vehicle alliance with the Japanese truckmaker, Hino Motors Ltd in early 2018.

In order to adapt to the challenging environment, it is important to explore alliances. In fact, several automakers have collaborated on various big projects. This particular alliance discussion is an addition to this trend.

In the past three months, shares of Ford have underperformed the industry it belongs to. During the period, its stock has witnessed rise of 8% in comparison with the industry’s growth of 11.5%.

Currently, both Ford and Volkswagen carry a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Oshkosh Corporation OSK and Allison Transmission Holdings, Inc. ALSN, each sporting a Zacks Rank # 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 6.9% over the past year.

Allison Transmission Holdings has an expected long-term growth rate of 10%. Over the past year, shares of the company have gained 13.5%.

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