Daimler AG DDAIF and its Chinese partner BAIC Motor Corp. intend to invest around $2 billion on a new factory in China, keeping in mind the rising demand for Mercedes-Benz and electric vehicles. Per the news by Reuters, the two companies will jointly invest over 11.9 billion yuan ($1.9 billion) to set up the facility in an undisclosed place.
This joint investment bid showcases the strong relationship between the partners and came after the sudden swoop by the Chinese multinational automotive manufacturing company Zhejiang Geely Holding Group Co. on Daimler.
In fact, it has been announced that Zhejiang Geely has bought shares of Daimler worth €7.3 billion ($9 billion). This turned Geely into the single largest investor in the company with a stake of nearly 10% and thrown challenges to Daimler.
This injection of capital by Geely poses some sort of challenges to Daimler. This has been followed by the decision of Daimler and BAIC Motor to invest in China.
Year to date, shares of Daimler underperformed the industry. Over the time frame, shares of the company rose 4.1%, whereas the industry grew 7%.
Currently, Daimler carries a Zacks Rank #2 (Buy).
Some other top-ranked companies in the auto space are General Motors Company GM, Volkswagen AG VLKAY and AB Volvo VLVLY. Each of these stocks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
General Motors has an expected long-term growth rate of 8.4%. In the past six months, shares of the company have grown 15.2%.
Volkswagen has an expected long-term growth rate of 18.7%. The shares of the company have risen 30.3% in the past six months.
AB Volvo has an expected long-term growth rate of 15%. In the past six months, shares of the company have grown 13.7%.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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