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Tesla, Musk sued over going-private tweet; Trump backs Harley-Davidson boycott


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Tesla, Musk sued over going-private tweet; Trump backs Harley-Davidson boycott


* Investors sued Tesla Inc. and CEO Elon Musk, claiming that the company tried to artificially manipulate its stock price through an allegedly false and misleading tweet by Musk, Reuters reported. Investors Kalman Isaacs and William Chamberlain filed separate proposed class-action complaints in the federal court in San Francisco, according to the report. Isaacs reportedly alleged that Musk and the company committed securities fraud as the tweet and Tesla's failure to correct it amounted to a "nuclear attack" to "completely decimate" short-sellers. Tesla did not immediately respond to S&P Global Market Intelligence's request for comment.

* President Donald Trump tweeted that many Harley-Davidson Inc. owners "plan to boycott" the iconic motorcycle maker if it moves its manufacturing processes overseas. Trump, who has slammed Harley-Davidson over the plan, added that it would be a "really bad move" for the company at a time when "most other companies," including the motorcycle maker's competitors, are coming to the U.S.


* Ford Motor Co.'s China sales continued to decline in July, with the Detroit carmaker selling 57,662 units in the month, down 32% year over year. Ford's local joint venture partner Jiangling Motors Corp. Ltd. posted a sales decline of 5% year over year to nearly 19,000 vehicles in July, while Changan Ford Automobile Corp. Ltd. recorded a drop of 43% year over year to 33,037 vehicles.

* Bayerische Motoren Werke AG noted headwinds in key European markets, including Germany and the U.K., offset a strong growth in Mainland China as the carmaker's July sales edged up 0.2% year over year to 181,051 vehicles. BMW Group's monthly sales in Europe dropped 2.1% year over year to 76,971 cars, while sales in China grew 7.8% to 46,692 cars. The sales of electrified vehicles, including BMW i, BMW iPerformance and MINI Electric vehicles, were up 30.9% in July.

* Jaguar Land Rover Automotive PLC reported a year-over-year decrease of 21.6% in sales of 36,144 vehicles in July due to "market uncertainties" in China and Europe as well as diminished demand in the North American market. The Tata Motors Ltd-owned British luxury-car maker, which recorded a pretax loss of £264 million in its first quarter on duty reductions in China, posted a 46.9% year-over-year slide in sales in the country during the month. July sales fell in Europe and in the U.K. because of delays in the worldwide harmonized light vehicles test procedure certifications for new vehicles, but JLR expected its impact to be "short-lived."

* Diesel-powered cars in South Korea made up 46.3% of all automotive imports to the country in July 2018, falling from 68.8% of imports in 2015, due to Volkswagen AG's 2015 diesel emissions scandal and the spate of fire incidents involving BMW cars in the country, the Yonhap News Agency reported.


* Tesla Inc. CEO Elon Musk and advisers are looking to line up a large group of investors to avoid concentrating ownership among a few new large stakeholders under the proposal to take the company private, Bloomberg News reported, citing sources. Sources told Bloomberg News that Saudi Arabia's Public Investment Fund is in talks with Tesla to sponsor a go-private deal, but Reuters reported that the fund is not keen on backing such a deal without input from SoftBank Group Corp. SoftBank also is not ready to invest in Tesla chiefly because of its previous investment in Tesla competitor General Motors Co.'s GM Cruise LLC, Reuters reported, citing sources. Tesla did not immediately respond to S&P Global Market Intelligence's request for comment.

* Tesla CEO Musk tweeted that the company plans to make its vehicle security system open source "for free use by other car makers" in a bid to improve safety and prevent possible hacks of self-driving cars.

* Hyundai Motor Co. has begun a study to examine making electric vehicles, as well as battery manufacturing and other locally sourced parts, in India as the South Korean automaker plans to launch its full EV range in the country in the future, The Economic Times (India) reported, quoting YK Koo, managing director at Hyundai Motor India. Hyundai reportedly will roll out its flagship Kona SUV in India by the second half of 2019. Koo said that after locally assembling the Kona EV, Hyundai could look at making "compact SUVs and sedan electric vehicles in India."


* The California Air Resources Board is proposing to change its regulations to ensure the state can continue to pursue more aggressive vehicle fuel efficiency standards if the Trump administration follows through with its proposal to freeze federal standards at current levels. The CARB is accepting comments on its proposal and plans to take up the item at its Sept. 27-28 meeting, the board said in a news release and accompanying paper. The Trump administration on Aug. 2 proposed to suspend rules that would boost corporate average fuel economy standards for cars and light-duty trucks and to revoke California's permit to set its own standards.

* Two automotive trade groups have expressed concerns about the U.S. government's request for confidential business information as part of an investigation of whether automotive imports pose a national security risk, Reuters reported, citing a letter from the groups. The probe began in May and has been criticized by automakers, parts suppliers, foreign governments and dealers, among others. Bloomberg News earlier reported July 13 that the trade group Alliance of Automobile Manufacturers, whose members include General Motors Co., Ford Motor Co., Daimler AG and Toyota Motor Corp., is unhappy with the commerce department's demand for "invasive" info.

* Subaru Corp. said it will replace 293 potentially faulty Ascent models, produced between July 16 and July 25, because of a software error that could have caused weak welding around the vehicles' B-pillar. The carmaker posted in a National Highway Traffic Safety Administration recall order that the fault, which could reduce the vehicle's strength during a crash, cannot be rectified and the recalled vehicles will eventually be destroyed.


* German auto parts giant Continental AG agreed to buy Australian tire and auto services chain Kmart Tyre & Auto Service for A$350 million from Australian conglomerate Wesfarmers Ltd., which owns the Coles supermarket chain. Continental said the acquisition marks a major expansion of its tire business in the Australian market. With the purchase of KTAS, Continental plans to complement its tire, car parts and repair business with services for retail customers as well as for fleet operators in the Australian market. The deal is expected to close in the quarter ending September 2019, subject to certain regulatory approvals.


* Volkswagen AG's auto financing unit launched a car rental service across three Volkswagen and two Škoda retailers in the U.K. The Rent-a-Car service, which is already operational in Germany and Spain, allows customers to rent out a VW vehicle online and collect it from the designated outlets. Volkswagen Financial Services seeks to expand the service across more VW Group locations through 2018.

The day ahead

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

In Asia, the Hang Seng was down 1.52% to 27,936.57. The Nikkei 225 retreated 1.98% to 21,857.43.

In Europe as of midday, the FTSE fell 0.51% to 7,628.81, and the Euronext 100 slipped 0.43% to 1,057.93.

On the macro front

No notable reports 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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