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US puts auto tariff on hold; Renault's H1 profit dragged down by Nissan

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US puts auto tariff on hold; Renault's H1 profit dragged down by Nissan


* The U.S. will hold off on imposing tariffs on European automobile imports while the U.S. and the EU continue trade negotiations, Commerce Secretary Wilbur Ross told reporters, according to White House pool reports. "In terms of auto tariffs, we've been directed by the president to continue the investigation, get our material together but not actually implement anything pending the outcome of the negotiation," Ross told reporters aboard Air Force One.

* Renault SA's half-yearly profit attributable to its shareholders fell nearly 19% year over year to €1.95 billion, from €2.40 billion in same period 2017, due to a €483 million drop in alliance partner Nissan Motor Co. Ltd.'s contribution. The French carmaker reported diluted EPS of €7.18 for the half, down from €8.78. Renault reported a record operating margin of €1.91 billion in the half, up from €1.82 billion a year earlier, and revenue increased 1.4% year over year to €29.96 billion.


* Renault SA COO Thierry Bollore said "it's likely" that the French carmaker's development plans in Iran would be put on hold to comply fully with the U.S. sanctions against the country. Bollore, speaking on a post-earnings analyst call, added that the company is exploring alternatives particularly in Africa "to offset the missed opportunities in Iran." The COO's comments come after Renault CEO Charles Ghosn was reported in June as saying that the French carmaker will not leave the country "even if we have to downsize very strongly."

* Daimler AG's board approved the company's reorganization into three legally independent divisions as the German car manufacturer seeks to sharpen its market and consumer focus and gain greater flexibility. Under the plan first outlined in 2017, the new corporate structure will comprise Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG, which was previously Daimler Financial Services AG. Daimler expects one-time restructuring costs to be in the high three-digit millions of euros until 2020, including tax charges from reorganizations and investment in the global business in international markets.

* Daimler AG-owned Mercedes-Benz CEO Dieter Zetsche said the luxury carmaker is trying to find ways of offsetting tariffs on its GLE SUV, which is made in an Alabama facility but exported to China, Reuters reported. Zetsche reportedly added that the company has not arrived at a decision on the matter so far as a shift in production is costly and time-consuming.

* Kia Motors Corp.'s first-quarter profit slumped 43.6% year over year to 432 billion South Korean won, compared with 765 billion won a year earlier, as sales revenue fell 2.2% year over year to 12.562 trillion won from 12.844 trillion won in the first quarter of 2017. A decrease in the carmaker's North American sales to 29.9% of overall revenue, lower than 34.7% year over year, hurt growth. Nevertheless, the quarterly revenue beat analysts' consensus estimate of 12.403 trillion won, as compiled by S&P Capital IQ.

* Hyundai Motor Co. reached a wage deal for 2018 with its 51,000-member union, Yonhap News Agency reported, citing a company statement. Hyundai's offer includes an increase of 45,000 South Korean won in basic monthly salary, a performance bonus equivalent to 2.5 months of salary and cash payments worth 3 million won, the report said.


* Volkswagen AG's premium Audi unit announced that its first all-electric model e-tron will be unveiled Sept. 17 at an event in San Francisco, nearly a month after it suspended its launch following the arrest of Audi CEO Rupert Stadler. Audi expects to release full specifications and pricing, as well as allow prospective customers to configure and reserve the EV, on that day. The e-tron, one of the three planned Audi EV launches by 2020, is scheduled to hit showrooms in the first part of 2019.

* Alphabet Inc. unit Waymo LLC is on track to set up an office in China, Gasgoo reported, citing the self-driving car company's head of Chinese market, Wang Min. Although a location is yet to be fixed, a Shanghai governmental delegation reportedly met a few days ago with a number of tech companies, including Waymo, and agreed to implement Waymo's autonomous vehicle development project in the city.


* U.S. Trade Representative Robert Lighthizer told lawmakers that talks over revisions to the North American Free Trade Agreement with Canada and Mexico may conclude in August. Signatures of the U.S., Canadian and Mexican leaders would require "some kind of a conclusion during the course of August," Lighthizer said during a Senate Appropriations subcommittee hearing.


* U.S.-based BorgWarner Inc. lifted 2018 outlook on the back of favorable impact of foreign currencies and on its purchase of Sevcon Inc. The company raised the lower end of its net sales guidance range for the year to forecast a growth of about 6% to 7%, compared with the previous 5% to 7% growth, on sales expectation of $10.64 billion to $10.75 billion, while raising 2018 diluted EPS outlook to be within a range of $4.45 to $4.50 per share from $4.25 to $4.35. For the second quarter ended June 30, BorgWarner's net sales rose 12.7% year over year to $2.69 billion from $2.39 billion a year earlier, and adjusted EPS was $1.18, higher than the $1.10 per share consensus estimate compiled by S&P Capital IQ.

* Lear Corp. stock closed down 5.34% at $171.94 on July 26 after its adjusted EPS for the second quarter missed analysts' consensus estimate. The company, which makes automotive seating and electrical systems, posted an adjusted diluted EPS of $4.95, lower than the average analysts' estimate of $4.99, as compiled by S&P Capital IQ. Net sales for the quarter ended June 30 increased 9% year over year to $5.58 billion, compared with $5.12 billion for the same period in 2017.

* Inc. teamed up with New York-based automotive retailer Monro Inc. to provide tire installation services at Monro's retail tire and automotive service centers in the eastern U.S. Customers can buy tires from the e-commerce giant's website, select Ship-to-Store option and get it installed at Monro centers. Initially, the service is available to Amazon customers across Monro's 52 stores that operate under its Mr. Tire Auto Service Centers brand in the Greater Baltimore area.

* Visteon Corp. lowered its full-year 2018 sales outlook as the auto parts-maker posted an adjusted profit of $1.37 per share in the second quarter, missing the analysts' consensus EPS estimate of $1.47. The company now expects 2018 sales to be in the range of $3.10 billion to $3.15 billion, lower than the $3.17 billion to $3.27 billion it forecast previously. Sales in the quarter ended June 30 shrunk to $758 million from $774 million a year earlier hurt by lower production volumes in the Americas.


* Penske Automotive Group Inc.'s second-quarter revenue beat expectations on increased revenue from its stand-alone used vehicle supercenter operations and a 45.5% same-store retail revenue increase in the automotive retailer's North American retail commercial truck business. Revenue for the quarter ended June 30 soared 10.3% to $5.94 billion, compared with $5.38 billion a year earlier, and above the analysts' consensus estimate of $5.82 billion, as compiled by S&P Capital IQ. The company reported adjusted net income for the quarter of $135.2 million, higher than the mean analyst estimate of $122.08 million.

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The day ahead

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

In Asia, the Hang Seng increased 0.08% to 28,804.28, and the Nikkei 225 rose 0.56% to 22,712.75.

In Europe, around midday, the FTSE 100 was up 0.58% to 7,707.50, and the Euronext 100 was up 0.24% to 1,078.64.

On the macro front

The GDP report, the consumer sentiment report and the Baker-Hughes Rig Count report are due out today.

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