Morgan Stanley analyst Adam Jonas thinks the string of mega-alliances in the automobile industry could lead to a downstream impact on suppliers as company look to pool insourcing capabilities.
In just the last few months alone, there has been collaboration news from Ford (NYSE:F) and Volkswagen (OTCPK:VWAGY) on EVs and AVs, General Motors (NYSE:GM) and Honda (NYSE:HMC) on AVs and complete vehicle design, Daimler (OTCPK:DDAIF) and BMW (OTCPK:BMWYY) on AVs, Daimler and Geely on developing the smart brand, Toyota (NYSE:TM) and Panasonic on energy storage - as well as Fiat (NYSE:FCAU) and Tesla (NASDAQ:TSLA) on emissions pooling of vehicle fleets.
"We expect pressures on OEM margins and efforts to reduce costs may challenge conventional market thinking around content growth opportunities for suppliers, leaving earnings forecast at risk," warn Jonas and team.
Auto supplier stocks: Adient (NYSE:ADNT), Allison Transmission (NYSE:ALSN), American Axle & Manufacturing (NYSE:AXL), Aptiv (NYSE:APTV), Autoliv (NYSE:ALV), BorgWarner (NYSE:BWA), China Automotive Systems (NASDAQ:CAAS), Cooper-Standard (NYSE:CPS), Dana (NYSE:DAN), Delphi Technologies (NYSE:DLPH), Douglas Dynamics (NYSE:PLOW), Garrett Motion (NYSE:GTX), Gentex (NASDAQ:GNTX), Gentherm (NASDAQ:THRM), Johnson Controls (NYSE:JCI), Lear (NYSE:LEA), LKQ(NASDAQ:LKQ), Lydall (NYSE:LDL), Meritor (NYSE:MTOR), Modine Manufacturing (NYSE:MOD), Monro (NASDAQ:MNRO), Motorcar Parts of America (NASDAQ:MPAA), Standard Motor Products (NYSE:SMP), Superior Industries (NYSE:SUP), Tenneco (NYSE:TEN), Tower International (NYSE:TOWR), UQM Technologies (NYSEMKT:UQM), Veoneer (NYSE:VNE), Visteon (NASDAQ:VC), Voxx International (NASDAQ:VOXX), WABCO (NYSE:WBC) and Westport Fuel Systems (NASDAQ:WPRT).
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