Allison Collaborates With BAE Systems to Supply 4040 MX

Allison Transmission Holdings, Inc. ALSN has signed a contract with BAE Systems Hagglunds BAESF, a prominent European producer of tracked combat vehicles, to supply the new Allison 4040 MX propulsion system for the ongoing CV90 Infantry Fighting Vehicle (IFV) programs, with production expected to commence in 2028. The 4040 MX, an upgraded version of the 3040 MX cross-drive transmission used in the U.S. Army's M10 Booker Combat Vehicle, expands Allison's medium-weight product line.

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 Hyundai Mighty, a 2.5- and 3.5-ton light-duty truck, dominates the South Korean market. The rising demand for Mighty automatic trucks is driven by their comfort, fuel efficiency, reliability, serviceability and productivity. Since its launch, Allison has delivered more than 10,000 units of the Allison 1000 xFE fully automatic transmissions for the Hyundai Mighty, used in various applications, such as delivery trucks, cargo trucks, refuse vehicles, firefighting trucks and specialty vehicles.

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).

Some other top-ranked stocks in the auto space are Suzuki Motor Corporation SZKMY, Honda Motor Co., Ltd. HMC and American Axle & Manufacturing Holdings, Inc. AXL, each sporting a Zacks Rank #1 (Strong Buy) at present.

The consensus estimate for SZKMY's 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for HMC's 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 have improved 9 cents in the past 60 days.

The Zacks Consensus Estimate for AXL's 2024 sales and earnings suggests year-over-year growth of 3.05% and 544.44%, respectively. EPS estimates for 2024 have moved up 2 cents in the past 60 days. The same for 2025 has moved up 5 cents in the past 30 days.

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