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Activist fund opposes FCA-Renault merger; US auto sales improve in May


* Activist investor CIAM has written to the board of Renault SA to say that it is "strongly opposed" to Fiat Chrysler Automobiles NV's "opportunistic" merger offer for the French carmaker, Reuters reported. The hedge fund's sentiments echo those of Peugeot SA CEO Carlos Tavares, who called it a "virtual takeover." Meanwhile, the French government increased its demands in the latest round of merger negotiations between the French carmaker and Fiat Chrysler, Reuters reported, citing sources. Paris asked for a "significant" board presence and the right to veto future CEO appointments. Fiat Chrysler and Renault did not immediately respond to requests for comment from S&P Global Market Intelligence.

* After months of consecutive decline, most major car manufacturers' U.S. sales rose in May, with Subaru Corp. and Toyota Motor Corp. posting the largest year-over-year increases at 6.4% and 3.2%, respectively. Subaru sold 63,972 autos while Toyota sold 222,174 vehicles in May. Fiat Chrysler saw sales in the U.S. rise 2% to 218,702 vehicles during the month. Bayerische Motoren Werke AG saw sales grow 1.7% to 27,109 vehicles. Nissan Motor Co. Ltd. sold 131,983 autos during the month, up 0.1%, but sales of its Infiniti brand fell 10.4%. Tata Motors Ltd.'s Jaguar Land Rover brand sold 7,337 automobiles in May, up 3% year over year. Mitsubishi Motors Corp., however, saw sales drop 21.47% to 9,750 units. Geely Automobile Holdings Ltd.'s Volvo Cars sold 60,196 units globally in May, up 12.4% year over year.


* Nissan CEO Hiroto Saikawa said it will review its relationship with alliance partner Renault should the latter accept a merger proposal from Fiat Chrysler Automobiles NV. Saikawa said that while teaming up with FCA could create new synergies and foster collaboration, the Japanese carmaker will re-examine its relationships and operating strategies to protect its interests.


* Tesla Inc. shares sunk to a more than three-year low after an analyst's report suggested the carmaker would have trouble being acquired as a going concern if its performance continues to deteriorate, CNBC reported. Tesla "no longer has genuinely differentiated tech. The production plant is sub-par. The Gigafactory is probably not essential (and may be claimed by Panasonic)," Bernstein Research analyst Max Warburton wrote. Warburton said "the brand still has value, albeit one that is declining fast," and the supercharger network may also have some value.

* Tesla agreed to sell an undisclosed amount of federal greenhouse gas credits to General Motors Co. and Fiat Chrysler in February 2019, Bloomberg News reported, citing filings to the state of Delaware. In 2018, the electric-car maker sold about $420 million in credits, which automakers can purchase to meet emissions targets and avoid fines. On May 6, Fiat Chrysler reportedly agreed to pay Tesla about €1.8 billion through 2022 for the electric-vehicle credits. According to the report, Tesla has raised nearly $2 billion from the sale of regulatory credits.

* The Toronto Transit Commission rolled out its first pure-electric bus onto public roads, with plans to build a fleet running on three different clean technologies by 2019-end. The public transport group said it will use clean diesel, hybrid electric and battery electric buses to halve its emissions by 2032 and to be completely emission-free by 2040.


* Uber Technologies Inc. shares fell 1% in premarket trading after the company said it is the subject of a federal income tax investigation by the IRS and other "various state and foreign tax authorities." The ride-hailing giant said its taxes from 2013 and 2014 will be re-examined and that its unrecognized tax benefits could change within the next 12 months.

* Daimler AG-backed ride-hailing app Kapten named Sebastien Oebel as CEO as its co-founders Yan Hascoet, Othmane Bouhlal and Omar Benmoussa plan to step down, Reuters reported. The French startup, which previously did business as Chauffeur Prive, recently won regulatory approval to begin operating in London.


* Volkswagen AG CEO Herbert Diess met with U.S. Trade Representative Robert Lighthizer in Washington on June 3 to discuss tariffs scheduled to come into effect next week that would affect imported Mexican vehicles, Reuters reported, citing sources. A spokesman told Reuters that Diess was in Washington but did not confirm the meeting. The German carmaker on June 3 said tariffs will hurt its long-term investments in the U.S.

* Volvo Cars said it joined the European Data Task Force, a public-private partnership that collects traffic safety information to create a cloud-based data platform. The Geely brand said it will participate in the anonymous data sharing and will help create safety services based on the results. BMW, Ford and Mercedez Benz are also part of the task force.


* California-based auto dealer TrueCar Inc. said its president and CEO, Chip Perry, has retired. Michael Darrow, executive vice president of partner and OEM development, has been named interim president and CEO.


* Volkswagen AG is planning a dual listing of its commercial vehicles unit Traton on the Frankfurt Stock Exchange and Nasdaq Stockholm before the summer break. The German carmaker said it would retain a majority stake in the unit, which comprises the Man, Scania and VWCO brands. The announcement comes a week after it was reported that Volkswagen is planning to launch a downsized offering of 10% to 15% of Traton shares, instead of the initially planned 25%.

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The day ahead

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

In Asia, Hang Seng fell 0.49% at 26,761.52, while the Nikkei 225 dropped 0.01% to 20,408.54.

In Europe, around midday, the FTSE 100 lifted 0.12% to 7,193.65, and the Euronext 100 gained 0.09% to 1,027.18.

On the macro front

The motor vehicle sales report, the Redbook Index for retail sales and the factory orders 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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