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BMW stock slips on 2019 profit warning; Uber rival Gett plans 2019 IPO


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BMW stock slips on 2019 profit warning; Uber rival Gett plans 2019 IPO


* Bayerische Motoren Werke AG expects 2019 profit before tax to be "well below" 2018 levels due to investment in new technologies and mobility business as well as "significantly higher cost of complying with stricter CO2 legislation." BMW Group's stock on the Frankfurt Stock Exchange dropped as much as 5.7% to €71.41 in intraday trading following the announcement. The company said it expects unfavorable currency factors and higher raw materials prices to have a "medium to high three-digit million negative impact," while also pointing at ongoing international trade conflict as a potential source of uncertainty.

* Gett Inc. founder and CEO Dave Waiser said the corporate ride-hailing app provider is mulling an IPO in 2019 either on the London Stock Exchange or in Israel to tap investor appetite for forthcoming public offerings of bigger peers Uber Technologies Inc. and Lyft Inc., the Financial Times (London) reported. The Volkswagen AG-backed company wants to see how Lyft's IPO goes. "[T]here's a lot of public capital waiting for the [technology] darlings [Uber and Lyft]," Waiser reportedly said. Separately, Lyft's IPO has so far received a stronger-than-expected response from investors, Reuters reported, citing anonymous sources. The news outlet said the IPO is oversubscribed, but it did not learn the exact level of oversubscription.


* Shares of Fiat Chrysler Automobiles NV and Peugeot SA jumped following a media report that raised the prospect of a potential tie-up between the two automakers. Robert Peugeot, chairman and CEO of the Peugeot family-controlled listed investment vehicle FFP Société anonyme, discussed a combination in an article published in French-language newspaper Les Echos. Robert Peugeot also is a member of Peugeot's board. Fiat Chrysler and Peugeot did not immediately respond to emailed requests for comment from S&P Global Market Intelligence.

* Opel and its works council agreed to either offer voluntary separation programs for employees at its Rüsselsheim, Germany-based research and development center, or an option to apply for engineering jobs at Segula Technologies, which is taking over the plant's vehicle and propulsion engineering facilities. The Peugeot-owned brand said 2,000 positions will be affected due to the move that is aimed to reduce overcapacities in the R&D center.

* Renault SA, Nissan Motor Co. Ltd. and Mitsubishi Motors Corp. will review the alliance's midterm sales target of combined global sales of 14 million units, set by former alliance boss Carlos Ghosn, The Mainichi reported, citing a source close to the matter. Nissan and Renault are putting off for the time being any merger talks or reconsideration of their ownership structure to focus on their joint operations, opting instead to take it up "sometime in the future," the source told the newspaper.

* Nissan Motor teamed up with Egypt's state-owned El Nasr Automotive Manufacturing Company SAE to make 100,000 cars a year in the country, Reuters reported, citing the Minister of Public Enterprises Hesham Tawfik. The two companies have reportedly signed an initial agreement for the production, the final contract of which is expected to be signed within three months.

* General Motors Co. will invest 10 billion Brazilian reais in two of its plants in São Paulo, Brazil, Reuters reported. General Motors did not immediately respond to S&P Global Market Intelligence's request for comment. In February, another Reuters report said the Michigan-based automaker is planning to invest 9 billion Brazilian reais in São Paulo over the next three years for tax incentives.

* The Audi A7 will be the first locally produced model under the proposed joint venture between Volkswagen AG's premium car brand and China's SAIC Motor Corp. Ltd., Gasgoo reported, citing local media accounts. The vehicle, to be named Audi A7L, reportedly will have a longer wheelbase than the imported Audi A7 and be priced lower than the latter's price range of between 808,800 Chinese yuan and 879,800 yuan. It is scheduled to come out of the production line in August 2020, Gasgoo reported.

* Skoda CEO Bernhard Maier said the Volkswagen AG-owned Czech carmaker is considering four sites in Eastern Europe to build a new VW Group factory to meet increasing demand for Skoda's SUVs, Autocar reported. The company would be able to "sell more than two million vehicles before the second half of the decade" if production demand is met, the CEO reportedly added.

* BMW Brilliance Automotive Ltd., the Chinese joint venture of BMW Group, will increase its annual capacity by 240,000 units at its Dadong, Shenyang–based plant in the country for an investment of 9.31 billion Chinese yuan, Gasgoo reported, citing a local media outlet. The newly added capacity reportedly will produce the BMW 5 Series sedan and an upper-medium SUV, which could be the locally made variant of BMW X5.

* S&P Global Ratings assigned a BBB- long-term issuer credit rating on Chinese carmaker Zhejiang Geely Holding Group Co. Ltd., the owner of Hong Kong-listed Geely Automobile Holdings Ltd. and Swedish luxury carmaker Volvo Cars. The agency said the rating reflects its view that Zhejiang Geely will continue to strengthen its position in the global and Chinese automotive industry over the next 12 to 24 months.

* Volvo Cars inaugurated its Shanghai-based Asia-Pacific headquarters as part of the carmaker's regional strategy with China as the focus, Xinhua reported. The facility reportedly covers 200,000 square meters in Shanghai's Jiading District.


* Toyota Motor Corp. and Suzuki Motor Corp. are expanding their strategic collaboration to bring together Toyota's electrification technology and the latter's compact car production abilities. As part of the pact, the companies will co-develop a Toyota C-segment MPV in India, and Suzuki's Vitara Brezza SUV, which is produced in India through its JV Maruti Suzuki India Ltd., will be produced at Toyota Kirloskar Motor Pvt. Ltd. from 2022. Toyota will also offer its expertise in electrification technologies to supply its Toyota Hybrid System to Suzuki, "widely spread" hybrid electric vehicle technologies in India through local procurement and others. Toyota will adopt Suzuki's newly developed compact vehicle engines and also sell Suzuki's India-produced vehicles in the African market.

* ZF Friedrichshafen AG took a 60% majority stake in Dutch automated electric passenger transport systems provider 2getthere B.V. to strengthen the German parts-maker's presence in mobility-as-a-service and automated guided vehicle markets.

* Volkswagen's China unit and FAW-Volkswagen, the German carmaker's the joint venture with China FAW Group Corp., set up a digitalization and connectivity JV that is expected to provide digital services to all future FAW-Volkswagen models from 2019-end and electric vehicles built on VW's modular electric toolkit from 2020. The two VW affiliates are investing a total of 1 billion Chinese yuan into MOS Intelligent Connectivity Technology Co. Ltd., which will be established in the Chinese city of Chengdu.


* Mexico concluded a free trade agreement with Brazil on light vehicles, subject to 40% local content requirements, and separately renewed for three years an auto trade quota with Argentina, following which Mexico will have free trade with the Latin American country, Reuters reported. Mexico's trade deals come amid increased pressures from the U.S. to call off the North American Free Trade Agreement that has helped Mexico's foreign trade for nearly 25 years, the news agency reported.

* Volkswagen CEO Herbert Diess' mention of a phrase similar to a Nazi slogan at a management meeting has put his future at the carmaker at risk, the Financial Times (London) reported, quoting several independent VW investors. At least one long-term U.S. institutional investor thinks Diess is going to be fired, while Bernstein analyst Max Warburton reportedly wrote to clients March 15 that he believes a "management change at VW is now a significant risk." On the other hand, several stakeholders back Diess, with Christian Strenger, founding member of Germany's corporate governance commission, saying sacking Diess after his apology "would be quite a mistake."


* Goodyear Tire & Rubber Co. plans to slash about 1,100 jobs in Germany as part of the tire-maker's plans to modernize facilities in the country and reduce tire production in less-profitable segments. Ohio-based Goodyear said in an SEC filing that the plan, which is subject to consultation with required employee representative bodies, is projected to cost at least $135 million in total pretax charges when it is completed in 2022.

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The day ahead

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

In Asia, Hang Seng declined 0.49% to 29,320.97, while the Nikkei 225 gained 0.20% to 21,608.92.

In Europe, around midday, the FTSE 100 fell 0.14% to 7,313.56, and the Euronext 100 dropped 0.28% to 1,050.20.

On the macro front

The EIA petroleum status report is 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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