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Hyundai scraps revamp plan; German court greenlights immediate diesel ban

TOP NEWS

* Hyundai Motor Group has aborted its proposed restructuring plan, including the spin-off merger of its auto parts unit Hyundai Mobis Co. Ltd and logistics firm Hyundai Glovis Co. Ltd., amid growing opposition from foreign investors. An updated restructuring plan, which will be prepared by "actively" seeking out shareholders' "thoughts and opinions," will be announced at a later date, Hyundai Mobis CEO Lim Young-Deuk wrote in a letter to shareholders.

* A court in Leipzig, Germany, ruled that authorities can ban diesel cars, covering all models barring the ones with Euro-6 emissions norms, on major roads or road sections without any grace period, Reuters reported. For larger city areas in the country, the court reportedly suggested a phased enforcement starting with older diesel cars. Bernhard Mattes, president of the country's auto industry lobby, questioned the court's decision and reportedly said such "local measures" might not be necessary "to meet the legal air quality targets."

CARMAKERS

* Fiat Chrysler Automobiles NV suppliers were aware of the automaker's alleged illegal use of software to pass emissions tests in 2010, Bloomberg News reported, citing emails disclosed in the U.S. District Court for the Northern District of California. The allegations follow another lawsuit against the company at a Manhattan federal court reportedly claiming that several FCA employees had flagged the alleged use of defeat devices on the carmaker's diesel pickup trucks and SUVs.

* Fiat Chrysler Automobiles NV CEO Sergio Marchionne will announce June 1 a plan to end production of its mass-market Punto and Mito models in Italy to focus instead on upscale models, Bloomberg News reported, citing people familiar with the plan. The Italian-American company reportedly would reconfigure its Turin and Naples plants in Italy to make FCA's Maserati and Jeep SUVs, and relocate the production of Panda cars to Poland. FCA, which declined to comment to Bloomberg News, reportedly would also end producing diesel-powered small cars in Europe to replace them with electric hybrid motors in the future.

* Peugeot SA's Citroën unit said its U.K. managing director, Bek Hassan, stepped down to take a senior position at the French carmaker's Paris office. Citroën appointed Karl Howkins as the new U.K. managing director, beginning June 1. Howkins is the managing director at Peugeot's Opel operations in Switzerland.

* Chery Automobile Co. Ltd. dismissed reports of Chinese real estate conglomerate Shenzhen Baoneng Investment Group Ltd. taking a majority stake in the carmaker, Gasgoo reported, citing a company release. The release reportedly said any equity sale in the state-owned company must go through an open-market auction process and be vetted by the Chinese government.

* Guangzhou Automobile Group Co. Ltd., or GAC Motor, said it set up a new entity called GAC Motor International Co. to handle its overseas businesses. The Chinese carmaker, which operates in 14 countries and regions including the U.S., will launch a Russia operations unit soon as well as regional offices in the Middle East, Africa and South America in the future.

ELECTRIC AND AUTONOMOUS VEHICLES

* Proxy advisory firm Institutional Shareholder Services recommended that Tesla Inc. shareholders vote against directors Antonio Gracias and James Murdoch at a June 5 annual meeting, Reuters reported. ISS also reportedly supported a shareholder proposal that calls for Tesla to separate the chairman and CEO roles of founder Elon Musk. A similar recommendation was previously made by Glass Lewis.

* Tesla Inc.'s CEO Elon Musk tweeted additional details of the U.S. electric car maker's dual-motor, all-wheel-drive Model 3, to be priced at $78,000, excluding the Autopilot technology. A performance version of the dual-motor Model 3, which Musk said will work even when one of the motors break down, is priced at $83,000. He also announced a car repair service for Tesla owners, which enables them to call in the service via their mobile phones.

* German automobile manufacturer Daimler AG said it will invest about €500 million in its Hambach plant in France to start producing compact electric Mercedes-Benz cars, in addition to its electric cars manufactured for the Smart brand. The company said preparations for the production of the new compact EQ model from Hambach will begin soon.

REGULATIONS AND SAFETY

* Bayerische Motoren Werke AG, or BMW Group, extended a recall to another 88,000 units of its 3 Series cars, both gasoline and diesel variants made between December 2004 and July 2011, to replace a connecting cable that could catch fire, the Financial Times reported. The latest notice by the German automaker, which reportedly recalled 670,000 cars in the U.S. over the same issue in 2017, now covers some 294,000 cars in the U.K. containing the cable. A company spokesman reportedly told the Financial Times that it has notified the Driver and Vehicle Standards Agency and the recall process will start "immediately."

* Ford Motor Co. said it will voluntarily recall 151 F-650 and F-750 vehicles built from March 28 to April 17 at its Ohio-based plant to repair a parking brake cable problem. Although the automaker is not aware of any incidents arising from the issue, the parking brake cable of the affected vehicles could lead to uninitiated movement when parked.

* Fiat Chrysler Automobiles NV issued a voluntary recall of about 48,990 SUVs in the U.S. to fix a possible fuel-supply line issue. The fault affects the 2018 make of the Jeep Cherokee SUV that comes with a 2.4-liter engine. About 1,666 vehicles in Canada and about 674 units across certain markets outside the North American Free Trade Agreement region are also being recalled.

AUTOMOTIVE RETAIL

* Volkswagen AG delivered 927,200 vehicles across its brands globally in April, an increase of 10.2% year over year from 841,100 units in April 2017. The uptick was led by a 31.8% year-over-year rise in the German automaker's sales in South America of 51,900 vehicles, a 12.2% year-over-year increase to 360,000 new vehicles in the Asia-Pacific region and 402,600 units sold in Europe during the month, up 9.2% year over year.

The day ahead

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

In Asia, the Hang Seng was up 0.60% to 31,234.35. The Nikkei 225 added 0.31% to 23,002.37.

In Europe as of midday, the FTSE 100 rose 0.80% to 7,841.15, and the Euronext 100 advanced 0.64% to 1,088.32.

On the macro front

The Chicago Fed National Activity Index is due out today.

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