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GM, Honda to make car for GM Cruise; Toyota, SoftBank form mobility service JV

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GM, Honda to make car for GM Cruise; Toyota, SoftBank form mobility service JV

TOP NEWS

* General Motors Co. announced that it has teamed up with Honda Motor Co. Ltd. to fund and develop a purpose-built autonomous vehicle for its self-driving car manufacturing subsidiary GM Cruise LLC. Under the deal, Honda will invest a total of $2.75 billion in the project: $750 million will go into Cruise as an equity investment and another $2 billion will be injected into initiatives over 12 years. Both companies also will look into opportunities for an international, commercial deployment of Cruise's network. Honda's investment in Cruise values the GM business unit at $14.6 billion.

* Toyota Motor Corp. and SoftBank Group Corp. agreed to invest ¥2 billion each into a joint venture for new mobility services that will seek to optimize supply and demand in transportation. The planned Tokyo-based JV, which the companies named Monet Technologies Corp., will be focused on on-demand mobility service, data analysis service and autonomous-mobility-as-a-service, or Autono-MaaS. It is expected to be established by April 2019, and the two companies plan to increase their investment to ¥10 billion into the new entity in the future.

CARMAKERS

* Nissan Motor Co. Ltd. joined other automakers in flagging "serious implications for [the] British industry" in the event of a disruption to the "frictionless trade" that has enabled the Japanese carmaker's exports from the U.K. to mainland Europe, The Guardian reported, citing a Nissan statement. Nissan reportedly employs nearly 8,000 workers at its export-oriented factory near Sunderland, and another 30,000 people work at Nissan suppliers in the U.K.

* Volvo Cars posted global sales of 60,622 units in September that rose 12.9% year over year from 53,674 vehicles in September 2017. The Geely Automobile Holdings Ltd.-owned Swedish carmaker said its U.S. sales grew 10.3% year over year during the month, helped by higher demand for Volvo's SUVs, while sales in China rose 14.4% year over year and by 8.4% year over year in Europe on higher sales of its XC60 and XC40 models.

* Volkswagen AG's luxury car brand Audi AG sold a total of 19,350 vehicles in the U.S. in September, a 0.2% increase from the same month last year. The slight improvement was driven by the carmaker's Q5 and A4, the same car lines that contributed to its 5.5% year-over-year growth in August.

* Volkswagen AG's Czech carmaker Škoda Auto needs to raise capacity at its European plants by 400,000 additional cars per year from the beginning of the next decade, Reuters reported, citing Czech news agency CTK quoting Škoda CEO Bernhard Maier at the Paris Motor Show. The move, a decision on which is slated for the beginning of 2019, reportedly could involve boosting capacity at existing plants or building a new facility.

ELECTRIC AND AUTONOMOUS VEHICLES

* Tesla Inc. CEO Elon Musk could be free to pick the electric-car maker's new chairman and independent directors as part of Musk's settlement with the SEC, Fox Business senior correspondent Charles Gasparino said in a tweet, citing SEC officials.

* Bernhard Kuhnt, CEO of Bayerische Motoren Werke AG's North America unit, said Tesla Inc. ramping up its vehicle production has put pressure on the U.S. luxury electric vehicle market, Bloomberg News reported, quoting the CEO in an interview.

* Guangzhou Automobile Group Motor Co., Ltd., or GAC Motor, a subsidiary of China's Guangzhou Automobile Group Co. Ltd., plans to establish its presence in Europe with an electric vehicle as all of its sedans and SUVs have failed to meet EU emissions standards, which are due to tighten further in 2021. GAC Motor President Yu Jun said the carmaker, which has set up a research center in Detroit, may delay its U.S. entry until 2020 or later amid the uncertainty caused by the U.S. and China ratcheting up trade tariffs on each other's goods.

POLICY, REGULATIONS AND SAFETY

* The European Automobile Manufacturers' Association, or ACEA, said it remains "particularly concerned" about the European Parliament voting for a 40% cut in CO2 emissions from cars and vans by 2030 as the measures are "extremely aggressive" and risk having "a very negative impact" on automotive jobs in the region. "There is no guarantee that we have the right enabling framework in place to facilitate this sudden transition to electromobility," Erik Jonnaert, the industry body's secretary general said, adding that ACEA hopes national governments will "bring some realism to the table" when they further discuss CO2 targets in the week of Oct. 8.

AUTO PARTS AND EQUIPMENT

* Electrify America LLC plans to pump another $200 million into electric vehicle charging in California, focused largely on fast-fueling stations in urban areas, executives of the Volkswagen AG subsidiary said. It is the second tranche of a planned four-phase, $800 million investment into EV charging in California as part of settlements related to Volkswagen's diesel emissions fraud.

* An affiliate of H.I.G. Capital LLC bought Brazilian automotive filters producer Sofape Fabricante de Filtros Ltda., also known as Tecfil, for an undisclosed sum. The automotive component maker operates the largest filter manufacturing facility in Latin America, according to a press release.

AUTOMOTIVE RETAIL

* U.K. new car registrations dropped 20.5% year over year to 338,834 units in September due to supply bottlenecks created by the Worldwide Harmonised Light Vehicle Test Procedure emissions norms, which came into effect Sept. 1, according to figures released by trade body The Society of Motor Manufacturers and Traders, or SMMT. SMMT CEO Mike Hawes, however, said "as backlogs ease, consumers and businesses can look forward to a raft of exciting high-tech cars and a market keen to recover lost momentum." Registrations of alternatively fuelled vehicles, consisting of pure-electrics and plug-in hybrids, rose 3.9% year over year to 23,507 vehicles in the month.

* Daimler AG said its mobility services platform, moovel, launched a late-night ridesharing pilot in downtown Los Angeles in cooperation with the city's transportation management-focused public-private partnership, FASTLinkDTLA. The FlexLA mobile app will offer Mercedes-Benz Metris vans and GLC hybrid vehicles to passengers at flat-rate fares, in partnership with fleet operator SMS Transportation.

TRUCKS AND MOTORCYCLES

* Orders for Class 8 trucks increased 92% year over year to 42,300 units in September on the back of a robust economy, according to preliminary information by the Trailer/Body Builders magazine. Demand is expected to be "even stronger" in 2019, the magazine reported. Final September sales figures will be out later in October, it added.

* Japan's Isuzu Motors Ltd. may announce Oct. 4 a joint venture with the U.S. heavy-trucks maker Cummins Inc. to build environmentally friendly large truck engines as well as cooperate on sales in North America and Asia, the Nikkei Asian Review reported. The Japanese automaker reportedly aims to negotiate the JV terms by the end of its ongoing fiscal year, ending March 2019.

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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 fell 1.73% to 26,623.87, while the Nikkei 225 declined 0.56% to 23,975.62.

In Europe, around midday, the FTSE 100 was down 0.86% to 7,445.42, and the Euronext 100 fell 0.97% to 1,053.45.

On the macro front

The jobless claims report, the factory orders report, the EIA natural gas report, the Treasury STRIPS 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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