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Faraday, Evergrande settle dispute; Hyundai targets 7.6 million sales in 2019

TOP NEWS

* Chinese real estate conglomerate Evergrande will restructure its $2 billion investment in Los Angeles-based electric car startup Faraday Future, marking an end to their dispute. Under the revised deal, Evergrande will take full ownership of all Faraday's China operations and release control over crucial Faraday Future's PRC assets, which were secured as collateral. Evergrande will not release further cash to Faraday Future and will own a 32% stake in the startup instead of the originally announced 45% stake. Faraday will reserve the option to buy out Evergrande's stake in five years. Both parties will withdraw all litigations against each other.

* Hyundai Motor Group aims to sell 7.6 million vehicles in 2019, up 3% compared with 7.4 million vehicles it sold in 2018, and warned that trade protectionism and sluggish U.S. and China markets would restrict growth, Reuters reported. The company plans to launch 13 new models, including more luxury SUVs, in 2019, Yonhap News reported, citing regulatory filings. The group's Hyundai Motor Co. unit aims to sell 4.68 million vehicles compared with about 4.59 million vehicles in 2018 and its Kia Motors Corp. unit targets 2.92 million vehicles from 2.81 million vehicles in 2018. In his first New Year address to employees, executive vice chairman Euisun Chung, who is the next in line to take over as the group chairman, reportedly said Hyundai will complete a restructuring of the conglomerate this year.

CARMAKERS

* General Motors Co.'s South Korean arm dropped prices on key vehicle models to address sluggish sales, Yonhap News Agency reported, citing a company statement. The company cut prices by up to 3 million South Korean won on models under the Chevrolet brand that include the Impala sedan as well as the Trax and Equinox SUVs, the report said. GM Korea's December sales fell 6.7% due to weak demand for its models, selling 42,424 vehicles compared with 45,466 units a year earlier.

ELECTRIC AND AUTONOMOUS VEHICLES

* Tesla Inc. had over 3,300 Model 3 vehicles left in inventory in the U.S. as of Dec. 31, 2018, Electrek reported, citing sources close to the matter. Though the electric-car maker aimed to sell and deliver a record number of vehicles, the sources doubted the remaining inventory could be delivered by year-end. The report also said Tesla asked its employees to buy some of the remaining vehicles.

POLICY, REGULATIONS AND SAFETY

* Jaguar Land Rover Automotive PLC is recalling 68,828 vehicles in China due to potentially defective engines, state-run Xinhua News Agency reported Jan. 1, citing a filing to the country's State Administration for Market Regulation. The Tata Motors Ltd. unit's recall affects 42,000 Discovery 4 vehicles manufactured between 2009 and 2016, along with 20,000 Range Rover Sport vehicles manufactured between 2009 and 2013.

* U.S. auto parts maker BorgWarner Inc.'s global security director Paul Whelan was arrested in Moscow for allegedly spying. The company said it is in contact with the U.S. government to help Whelan.

AUTOMOTIVE RETAIL

* Chinese ride-hailing firm Didi Chuxing Technology Co. Ltd. unveiled a financial services module in its app to offer crowdfunding, lending and auto-financing services. The launch will feature two service groups, Didi protection and credit services, which will provide "personal financial products" including health insurance and a transaction platform and auto-financing solutions to connect drivers to new energy vehicles by providing purchasing, leasing and trading activities.

* Maruti Suzuki India Ltd. reported total vehicle sales decreased 1.3% to 128,338 units in December 2018 from 130,066 in December 2017. The Suzuki Motor Corp. subsidiary sold a total of 121,479 vehicles in India, up 1.8% year over year. This was largely driven by a 1% increase in total domestic passenger vehicle sales to 119,804 units from 118,560 units in December 2017. However, total exports for the month plunged 36.4% year over year to 6,859 units from 10,780.

The day ahead

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

In Asia, the Hang Seng fell 2.77% to 25,130.35.

In Europe, around midday, the FTSE 100 decreased 0.82% to 6,672.97, and the Euronext 100 was down 1.36% to 904.15.

On the macro front

The Redbook Index for retail sales and the Purchasing Managers' Manufacturing index 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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