This agreement continues a longstanding collaboration between BAE Systems and Allison, presenting an opportunity for growth in ALSN's Defense market, potentially generating $100 million in additional annual revenues from various programs. BAE Systems' BvS10 and Beowulf tracked vehicles are already equipped with Allison 3000 Specialty Series transmissions.

The 4040 MX will be used in ongoing CV90 programs, including the CV90 Mk IV IFV, and the agreement ensures long-term support for the existing CV90 fleet equipped with Allison X300 transmissions. Currently, nearly 1,000 CV90s are operated by countries, including Sweden, Denmark, Estonia, Finland, the Netherlands, Norway and Switzerland.

BAE Systems and the CV90 have also secured significant IFV contracts in Slovakia and the Czech Republic for about 400 new vehicles. The CV90 IFV, designed and manufactured in Sweden, is renowned for its protection of crew and passengers, accommodating a crew of three and up to eight soldiers.

Per Dana Pittard, vice president of Defense Programs at Allison, the introduction of the 4040 MX enriches ALSN's portfolio, facilitating international expansion with innovative solutions tailored to customer needs.

In a separate development, ALSN has supplied more than 10,000 fully automatic transmissions for the Hyundai Mighty since its 2020 integration. Currently, half of all Hyundai Mightys sold are equipped with Allison fully automatic transmissions, representing a significant increase from 10% four years ago. The 10,000th Mighty truck with an Allison fully automatic transmission was delivered to Unchang Logitec, a leading Korean logistics company.

The Allison 1000 xFE transmission offers better launch performance, higher productivity, smoother shifting, easier operation and enhanced driver comfort compared to manual and automated manual transmissions. Its patented torque converter enhances performance and eliminates the need for clutch replacements, resulting in higher economic value through increased productivity and reduced downtime.

Zacks Rank & Other Key Picks

ALSN currently carries a Zacks Rank #2 (Buy).

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