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Softbank boosts auto investments; Ghosn rearrested on fresh charges

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Softbank boosts auto investments; Ghosn rearrested on fresh charges

TOP NEWS

* SoftBank Group Corp. is making a series of future-focused investments in the auto sector. The Japanese tech giant, through its Vision Fund, is in talks to invest $1.5 billion in ride-hailing company GrabTaxi Holdings Pte. Ltd., with an announcement expected in January 2019, Reuters reported, citing people familiar with the situation. Softbank's Vision Fund invested $500 million in driving-behavior tracker Cambridge Mobile Telematics and led a $385 million funding round for online car reseller Fair. Cambridge Mobile Telematics analyzes driver behavior to inform insurers, fleets and wireless carriers about the pricing of auto insurance plans, while Fair offers Uber Technologies Inc. drivers a car loan or lease.

* Nissan Motor Co. Ltd.'s former chairman Carlos Ghosn was rearrested on fresh allegations of aggravated breach of trust by making the carmaker shoulder more than $16 million of his personal investment losses, Japanese public broadcaster NHK reported. The arrest comes after Tokyo courts rejected prosecutors' request to extend Ghosn's detention, who was first arrested in November for underreporting income. Separately, Ghosn vowed to restore his honor in court, the Nikkei Asian Review reported.

CARMAKERS

* Nissan Motor is set to lay off about 1,000 workers at its Cuernavaca and Aguascalientes manufacturing facilities in Mexico, due to "challenging market conditions," Reuters reported, citing a company statement. The company reportedly said the move came amid a "decline suffered by the Mexican automotive industry," driven by mounting costs of raw materials.

* Hyundai Motor Group expects weak car sales in 2019 in the U.S. and China due to trade tensions and in Europe over stricter regulations, Yonhap News Agency reported, citing the group's vice president, Lee Bo-sung. The Hyundai research institute expects 17 million vehicles sold in the U.S. in 2019, down 1.4% year over year, with Europe sales to slump 0.2% year over year to 17.8 million automobiles. The Hyundai Motor Co. parent expects China sales to increase 0.2% to 23.2 million vehicles sold in 2019.

* Tesla Inc. CEO Elon Musk reiterated interest in saving General Motors Co.'s Ohio plant, which is scheduled to be shut down in 2019, but GM said the fate of the plant depended on its talks with United Auto Workers, Reuters reported. United Auto Workers and GM will renegotiate contracts and likely come up with a resolution in the fall of 2019, a GM spokesperson told Reuters.

* General Motors will spin off its research and development division in early 2019 after receiving backing from the Korea Development Bank, Yonhap News Agency reported. GM Technical Center Korea will be established Jan. 2, 2019, and employ about 3,000 people.

ELECTRIC AND AUTONOMOUS VEHICLES

* Geely Automobile Holdings Ltd. said it will form a 1 billion Chinese yuan venture with Contemporary Amperex Technology Co. Ltd. to produce and develop batteries for new energy vehicles. Under the deal, Geely will own a 49% stake in the new company, whose operations include research and development and production, as well as sales of batteries, battery modules and battery packs.

* The global demand for batteries is expected to grow 14 times its current level to 1,851 gigawatt-hours by 2030, compared to the current 132 gigawatt-hours, with electric vehicles to be responsible for 84% of the demand, Bloomberg News reported. Current battery prices have fallen 85% from 2010. Separately, a report by the EU's science and knowledge service reported that the global electric vehicle expansion will exponentially increase the demand for cobalt in the next decade, with demand significantly exceeding supply by 2020.

* Ford Motor Co. and Michigan State University will expand their research partnership for the pair to develop self-driving tech, sensors and lightweight materials. The pair will also extend their research to mobility solutions and new features for Ford customers.

POLICY, REGULATIONS AND SAFETY

* British car production fell to 129,030 vehicles in November, down 19.6% year over year amid warning from U.K.'s auto industry body that a no-deal Brexit will destroy the automotive industry and the hundreds of thousands of jobs it provides. The Society of Motor Manufacturers and Traders attributed the production slump to falling business and consumer confidence and poor export markets. It added that all politicians should focus on delivering a better deal, as tariffs resulting from a bad Brexit could add at least £4.5 billion to industry costs and lead to losing competitiveness and jobs abroad.

* Volkswagen AG-owned Porsche AG issued a recall for 74,585 Panamera vehicles worldwide on faulty control units on the car's electric power steering, which could require users to exert additional force to steer the car. Users can bring in the affected automobiles to have the control unit reprogramed for free.

AUTOMOTIVE RETAIL

* Volkswagen-owned Audi AG's joint venture with Faw Car Co. Ltd. launched a tailored taxi service in Xi'an, China, as part of its on-demand mobility efforts, Gasgoo reported. The service, which will deploy Audi's A6L e-tron plug-in hybrid for the initial rollout, will be integrated with social messaging app WeChat to facilitate car-hailing.

TRUCKS AND MOTORCYCLES

* Volkswagen AG-owned Traton AG completed its transition to a European company, Traton SE, ahead of its spin-off in early 2019 after the truck and bus group's shareholders approved the move. The new business form will allow VW to integrate Traton brands MAN, Scania and Volkswagen Caminhões e Ônibus brands while intensifying "cooperation between the companies and unions in the interests of both the employees and the Group within the commercial vehicles market."

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The day ahead

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

In Asia, the Hang Seng rose 51% to 25,753.42, while the Nikkei 225 was down 1.11% to 20,166.19.

In Europe, around midday, the FTSE 100 fell 0.27% to 6,693.58, and the Euronext 100 was down 0.52% to 905.98.

On the macro front

The Durable Goods Orders report, the Gross Domestic Product report, the Corporate Profits report, the Personal Income and Outlays report, the Consumer Sentiment report, the Kansas City Fed Manufacturing Index and the Baker-Hughes Rig Count 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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