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Tesla rolls back online-only plan; Renault-led Alliance in restructuring talks

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Tesla rolls back online-only plan; Renault-led Alliance in restructuring talks


* Tesla Inc. said it will raise its car prices by 3% globally and decided to keep "significantly more stores open" than previously announced. Though Tesla earlier announced it is to close most of its stores and lay off employees as part of a shift to online-only sales, it has only closed about 10% of its locations and put another 20% under review. The price hike will apply to all models except the $35,000 Model 3, which will be delivered within six to eight weeks instead of the planned two to four weeks.

* Renault SA said it is in discussions with Nissan Motor Co. Ltd. and Mitsubishi Motors Corp. to set up a new Alliance body in order to "enhance and ensure further collaboration," but the companies have not reached a definitive agreement. Renault was responding to a March 9 report in the Nikkei Asian Review that the companies are forming a new decision-making panel to replace the existing setup that concentrated power in the hands of former Alliance chairman Carlos Ghosn, who previously served as chairman of all three companies before his arrest in November 2018. Separately, a Tokyo court denied Ghosn's request to attend Nissan's March 12 board meeting, Japanese public broadcaster NHK reported, citing sources.


* Hyundai Motor Co.-parent Hyundai Motor Group gained support from U.S. proxy adviser Glass Lewis & Co. LLC for some of its proposals in its proxy battle with New York hedge fund Elliott Management Corp., Bloomberg News reported, citing a letter from Glass Lewis. The South Korean carmaker is under pressure from Elliott to restructure its business and pay out 7 trillion South Korean won in 2018 dividends from Hyundai and Hyundai Mobis Co. Ltd. According to the report, Glass Lewis in a letter urged shareholders to vote against the activist investor's dividend proposal, saying Hyundai would need to invest heavily in research and development and mergers and acquisitions.

* Hyundai Motor Group said it is in discussions with investors to construct a new headquarters in Seoul by 2023, Reuters reported. The group could incur about $3.27 billion in investment costs for the project, which is subject to shareholders approval. Separately, the group-owned Kia Motors Corp. may stop operations at its primary Chinese plant due to weak car sales, Yonhap News Agency reported. The South Korean carmaker is reportedly reviewing operations at its Yancheng plant in China's eastern Jiangsu province to "secure production efficiency and profitability." Kia did not immediately respond to a request for comment from S&P Global Market Intelligence.


* Tesla could source rechargeable batteries for its Model 3 from China's Contemporary Amperex Technology Co. Ltd., or CATL, Bloomberg News reported, citing people familiar with the matter. Tesla and CATL are in talks over battery specifications as the carmaker plans to begin assembly in its Shanghai gigafactory, the sources said. The companies declined to comment.

* Nissan plans to electrify one-fourth of its sales volume as part of the midterm strategy, Nissan M.O.V.E to 2022. The Japanese carmaker made the announcement as it said its fully electric Nissan Leaf will be sold in Indonesia and the Philippines by 2020, building on the model's 2019 launch in Australia, New Zealand, Singapore, South Korea, Thailand, Hong Kong and Malaysia across the Asia-Oceania region.

* South Korean lithium-battery maker LG Chem Ltd. doubled its bond issue to 1 trillion won, from the 500 billion won it previously offered, on the back of increased demand as the company plans to use the funds for expanding its electric-vehicle battery plant and other facilities, Yonhap News Agency reported. The bond reportedly will be priced March 12 and offered in four tranches, with maturities ranging from three to 10 years. LG Chem plans to generate 32 trillion won in sales in 2019, up 13.5% year over year, and aims to ramp-up EV battery production to 110 GWh by 2020 from 34 GWh at present, Yonhap reported.


* European authorities will fine Daimler AG, Bayerische Motoren Werke AG and Volkswagen AG up to €1 billion for colluding to sabotage exhaust filter systems, German-language publication Der Spiegel reported. The punishment could be imposed in the coming weeks, according to the report.

* Volkswagen's attempts to comply with Europe's new emissions standard called the WLTP cost it about €3.6 billion in 2018, Reuters reported, citing a person familiar with the matter.

* The Brazilian state of Sao Paulo announced tax rebates of up to 25% over the country's ICMS value-added tax for automakers that invest at least 1 billion reais into the state and create 400 new jobs amid Ford Motor Co.'s planned exit from the country, Reuters reported, citing a press conference by Sao Paulo Governor Joao Doria. Doria reiterated that the government is in talks with three companies for a sale of Ford's Sao Bernardo do Campo-based facility, without naming any, Reuters reported. Ford denied comment, while General Motors Co., which also weighed in on a similar move before calling it off, said in a release that the tax breaks would help the local industry become more competitive.

* Guangzhou Automobile Group Co. Ltd. chairman Zeng Qinghong said the Chinese carmaker's plans to export to the U.S. are being held up by tariffs and requests by U.S. dealers to rename the carmaker's Trumpchi brand, Reuters reported.


* Tata Motors Ltd.' brands sold 110,262 vehicles in February, down 9% year over year. Tata sold 84,512 commercial automobiles in the month, down 9% year over year, while it sold 67,964 passenger vehicles, also down 9% year over year. The carmaker's Jaguar Land Rover Automotive PLC brand sold 49,695 vehicles.

* Chinese carmaker Chongqing Changan Automobile Co. Ltd. February sales dipped 27.6% year over year to 110,470 vehicles, hurt primarily by an 81.4% year-over-year slide in sales to 6,799 vehicles at its joint venture with Ford Motor Co., Gasgoo reported, citing figures released by Changan on its official WeChat account. The company previously forecast 2018 profit to plunge between 89.49% and 92.99% due to weak demand for cars made by its Ford JV, Changan Ford Automobile Corp. Ltd.

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The day ahead

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

In Asia, the Hang Seng was up 0.97% to 28,503.30. The Nikkei 225 gained 0.47% to 21,125.09.

In Europe as of midday, the FTSE 100 gained 0.75% to 7,157.46 and the Euronext 100 was up 0.28% to 1,016.53.

On the macro front

The retail sales and the business inventories reports 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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