Autoliv (ALV) To Form Autonomous Driving JV With Volvo Cars

Autoliv Inc.’s (NYSE:ALV) shares gained 1.1% on Sep 7, after the company announced that it has signed a letter of intent to form a joint venture (JV) with Volvo Cars. The JV, to be headquartered in Sweden, will focus on the development of next-generation autonomous driving software. The advanced driver-assist systems (ADAS) and autonomous driving (AD) technologies to be developed by the JV will be used in Volvo cars and sold exclusively by Autoliv to other automakers. Profits from the JV will be divided between the companies.

The combination of Autoliv’s and Volvo’s expertise will help the JV in developing ADAS and AS technologies faster. It is expected to begin operations from early next year and bring the first ADAS products in the market by 2019 and AD technologies by 2021.

However, it should be kept in mind that a letter of intent is non-binding and the JV formation will only be confirmed once the companies sign a definitive agreement.

Autoliv frequently expands its business through acquisitions and JVs. In Apr 2016, it announced the completion of the JV with Nissin Kogyo, named ANBS. Under the JV, Autoliv combined its brake control business with Nissin Kogyo's automotive braking business. ANBS merges Nissin Kogyo's expertise and technology in brake control and actuation systems with Autoliv’s huge global customer base. The JV is expected to improve Autoliv’s position as a leading system supplier for autonomous vehicles.

In Aug 2015, Autoliv completed the acquisition of the automotive business of M/A-COM Technology Solutions Holdings, Inc. The acquired business is a leading supplier of integrated, embedded Global Positioning System modules to the automotive industry. Other technologies and intellectual properties included in the transaction are various Radio Frequency and antenna products, and Electronic Horizon.

Autoliv currently carries a Zacks Rank #4 (Sell). Some better-ranked automobile stocks include Spartan Motors Inc. (NASDAQ:SPAR) , Superior Industries International, Inc. (NYSE:SUP) and Cooper-Standard Holdings Inc. (NYSE:CPS) . All the three stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

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