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BMW raises Chinese JV stake; Musk denies Murdoch for Tesla chairman report

TOP NEWS

* Bayerische Motoren Werke AG said it will raise its stake in its joint venture with Brilliance China Automotive Holdings Ltd. to 75% from 50%, taking advantage of China's decision to remove a ban on foreign ownership in the country's car industry. The transaction is valued at €3.6 billion, according to a same-day report by Bloomberg News. BMW and Brilliance China also agreed to extend the contract of Beijing-based BMW Brilliance Automotive Ltd., which was established in 2003, to 2040 from 2018, following a "successful collaboration" between the companies.

* Outgoing 21st Century Fox Inc. CEO James Murdoch is the leading contender to succeed Tesla Inc. CEO Elon Musk as the electric vehicle company's chairman, the Financial Times (London) reported, citing anonymous sources. But hours later, Musk tweeted a response to the Financial Times' Twitter post of its Murdoch report that stated: "This is incorrect." No further details were given. Tesla did not immediately respond to S&P Global Market Intelligence's request for comment.

CARMAKERS

* Volkswagen AG has appointed Scott Keogh as CEO of the Volkswagen Group in the United States and head of the Volkswagen brand for North America. Keogh will succeed Hinrich Woebcken, who will continue at the company in an advisory role. At Audi, Keogh will be replaced by Mark Del Rosso, who has been CEO of Bentley Motors Inc., Americas, since last year.

* Ford Motor Co. issued a recall of approximately 200 GT cars over a hydraulic fluid leak that can cause fires. The fluid may leak from the valve block assembly under the rear wing of the affected vehicles and onto the exhaust. According to Ford, there was only a single incident of fire that occurred in Germany related to the issue. There were no injuries reported.

* Vietnamese carmaker VinFast Trading and Production LLC, owned by property developer Vingroup Joint Stock Co., secured a $950 million term loan financing from Euler Hermes and the German Export Credit Agency for building VinFast's primary manufacturing base in Hải Phòng city, Vietnam News reported. Concurrently, Fitch Ratings revised the outlook on Vingroup to negative from stable and removed all ratings from rating watch negative on heightened business risks stemming from Vingroup's investment in VinFast, which seeks to build General Motors Co.-branded small cars in the country from 2019.

ELECTRIC AND AUTONOMOUS VEHICLES

* China Changan Automobile Group Company Ltd. plans to invest up to 4.79 billion Chinese yuan in a new plant in the country's Jiangsu province for building electric and hybrid vehicles, Gasgoo reported, citing local media accounts from the Environmental Protection Department of Jiangsu Province. The 1.46 million-square-meter site, slated to begin production from 2020, reportedly will produce 240,000 units per year at full capacity.

* Connected car capabilities — convenience, entertainment and safety — rather than on-the-road performance can make or break showroom deals for some prospective buyers, the global head of sales and brand at Bayerische Motoren Werke AG told S&P Global Market Intelligence in an interview. "Customers expect their world to be integrated with their car," Pieter Nota said during an interview at the Paris motor show, which runs until Oct. 14. "There is a lot of evidence that purchase criteria are shifting. In China, we know that 60% of people would switch between brands when there is an alternative that offered more connectivity," Nota said.

* T. Rowe Price Group Inc. now holds a 10.2% stake in Tesla Inc., up from its previous 6.9% stake, according to an SEC filing. The asset management firm increased its position in the electric-car company and held 17.4 million shares as of Sept. 30, according to the filing.

* Tesla Inc. is close to securing land in Shanghai for its first overseas factory, Bloomberg News reported, citing sources. According to the newswire, the electric-car maker is the lone bidder for a parcel of land priced at 1 billion Chinese yuan. Sources said the Shanghai government could decide as early as this month to grant the piece of land to Tesla.

* Tesla Inc. CEO Elon Musk expects the electric-car maker's Nevada-based Gigafactory to employ "upward of 20,000 [workers] in the future," double Tesla's previous projection of about 10,000 personnel at the site at most, Electrek reported, quoting Musk at an event with Nevada Gov. Brian Sandoval. Musk reportedly said Tesla also is "looking at creating a housing compound on site at the Gigafactory, using kind of high-quality mobile homes," to accommodate the expansion. Nearly 7,000 people work at the Gigafactory at present, Musk reportedly said.

* Volkswagen AG's premium unit Audi AG will deepen its collaboration with China's Huawei for the joint development of automated driving functions and future-oriented vehicle-to-infrastructure communications, Huawei said in a release.

* Volvo Cars expanded its partnership with NVIDIA Corp. for the development of an artificial intelligence-capable core computer to be used on Volvo cars early next decade. The computer, to be fitted on cars based on the Geely Automobile Holdings Ltd.-owned company's scalable product architecture 2 modular platform, will help Volvo implement better driver support systems, energy management technology and in-car personalization options.

POLICY, REGULATIONS AND SAFETY

* General Motors Co.'s plan to spin off the design and engineering divisions of its South Korean unit contravenes a May pact with the South Korean government, Yonhap News Agency reported, quoting a parliamentary audit review by Jung You-sub, an opposition Liberty Korea Party member. Union workers of GM Korea are set to vote Oct. 15-16 on whether to protest the U.S. carmaker's decision, which the union reportedly said "appears to be a move to sell its car plants." GM Korea will hold a shareholder vote Oct. 19 on the matter.

* German Economy Minister Peter Altmaier will unveil Nov. 13 a new electric battery consortium consisting of Ford Motor Co. and battery maker VARTA Microbattery GmbH, German newspaper Der Tagesspiegel said. The government could provide €1 billion in startup financing to the entity, German business newspaper Handelsblatt tweeted. Neither company agreed to comment on the proposal. However, a Varta spokeswoman reportedly told Tagesspiegel that the company does not rule out large-scale cell production in future.

* German Economy Minister Peter Altmaier said any move to fine carmakers for not fixing older diesel vehicles will not be feasible "under constitutional law," Reuters reported, quoting the minister, who was speaking on Deutschlandfunk radio. Altmaier, a member of the Christian Democratic Union party, was reportedly responding to a call for such fines by a senior member of the country's Social Democrat party. The two parties are in a coalition at the federal level.

* Jonathan Chang, Tesla Inc.'s legal vice president, said at a National Labor Relations Board hearing that the electric-car maker's general counsel asked Chang to make a document reminding "employees what their obligations are, and have them renew their vows," Bloomberg News reported. A series of internal information leaks around September 2016 prompted Tesla to draft the document, Chang reportedly said.

AUTO PARTS AND EQUIPMENT

* French multinational utility Electricité de France SA is aiming to become the market leader in the European electric vehicle charging sector by 2022 by operating 75,000 charging points, powering 600,000 EVs across France, the U.K., Italy and Belgium. The goals, set out in its Electric Mobility Plan, would equate to 30% of those markets, EDF said. The company operates 5,000 charging points in France through subsidiary Sodetrel and is planning to start offering charging services in the other three countries from next year.

* The board of Goodyear Tire & Rubber Co. approved the move to raise the company's quarterly dividend to 16 cents per common share from 14 cents, effective from the next payout Dec. 3.

* Bosch announced a partnership with Chinese technology company Huawei to offer the German parts maker's internet of things software suite on Huawei's cloud. A "leading" Chinese automaker has picked Bosch's IoT Suite on Huawei Cloud to offer over-the-air vehicle firmware upgrades, Bosch said, with the product expected to roll out to "millions of connected cars in China" over the coming years.

* Continental AG unveiled the first full-color demonstration of an automotive augmented reality head-up display unit. The product uses waveguide technology and was developed in collaboration with California-based optical-components maker DigiLens Inc.

* Basel, Switzerland-based battery startup Innolith AG said it developed a new battery technology that gives a lifetime throughput of over 60 GWh of energy and a 50,000 cycle lifetime, far exceeding the performance of conventional lithium-ion batteries. As a result, the new batteries are expected to cost "between one-third and one-tenth per cycle" compared with lithium batteries.

AUTOMOTIVE RETAIL

* Uber Technologies Inc. is considering selling $1.5 billion worth of bonds in a private placement to a small group of institutional investors, Bloomberg News reported, citing people familiar with the matter. The ride-sharing company may offer $500 million of 7.5% five-year notes and $1 billion of 8% eight-year bonds, sources reportedly told the newswire. The report said the bond sale may come as soon as next week, with Morgan Stanley acting as lead placement agent.

* Renault SA launched its first electric vehicle car-sharing service, Moov'in.Paris, across Paris and Clichy. Initially, 100 ZOE models are available, which will expand to 200 ZOEs by the end of October and 500 vehicles by 2018-end.

* Waze Inc.'s carpool service is now available across the U.S., the Google LLC-owned company said. Waze initially tested the app in markets including San Francisco, Sacramento and Monterey in California before expanding into other states and ultimately nationwide.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng slipped 3.54% to 25,266.37, and the Nikkei 225 declined 3.89% to 22,590.86.

In Europe, around midday, the FTSE 100 was down 1.65% to 7,027.61, and the Euronext 100 fell 1.70% to 991.57.

On the macro front

The consumer price index, the jobless claims report, the Energy Information Administration natural gas report, the Energy Information Administration petroleum status report, the Treasury Budget report, the Fed balance sheet and the money supply report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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