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China car sales drop 7.4% in 2019; fugitive Ghosn tears into Nissan, Japan


* China passenger car sales dropped 7.4% in 2019 to 20.7 million vehicles, marking the second consecutive year of decline, The Wall Street Journal reported, citing the China Passenger Car Association. The China Association of Automobile Manufacturers expects the market to continue declining in 2020.

* Fugitive former automotive executive Carlos Ghosn lashed out at senior Nissan Motor Co. Ltd. executives, including former CEO Hiroto Saikawa, and Japanese officials over what he said was an attempt to frame him for financial misconduct to derail closer ties with French partner Renault SA. Ghosn attacked Japan's public prosecutor for allegedly threatening to embroil members of his family if he did not confess to the charges. Japan's Public Prosecutors Office issued a statement calling Ghosn's allegations "categorically false and completely contrary to fact."


* Interpol made public its Red Notice issued for former Renault CEO Carlos Ghosn, confirming recent reports. The Red Notice specifies that Ghosn is wanted by Japan. A Red Notice does not necessarily mean an arrest warrant, Interpol said on its website. Ghosn was questioned at Justice Palace in front of officials and prosecutors in Beirut following the notice, Reuters reported, citing a judicial source.

* Volkswagen AG-owned Porsche and its management and IT unit MHP formed a joint venture with reinsurance company Munich Re called FlexFactory: Digital Factory Performance. The venture plans to develop various production concepts and software solutions for small-scale production, the carmaker said.

* Chinese automaker FAW Car Co. Ltd. plans to double sales of its Red Flag brand to about 200,000 vehicles in 2020 and 1 million vehicles in the next decade, Reuters reported, citing FAW Chairman Xu Liuping. Red Flag, also called Hongqi, plans to have 21 models, 18 of which will be electrified, by 2025.

* U.S.-based Global Automakers and The Alliance of Automobile Manufacturers said they agreed to merge into The Alliance for Automotive Innovation, which represents manufacturers and suppliers for 99% of all light-duty vehicles in the U.S. The industry bodies said the new alliance will focus on safe deployment of new technologies in the industry.


* Tesla Inc. shares closed at a record $492.14 on Jan. 8, up 4.92% and pushing its market capitalization cap to $88.71 billion, surpassing the combined market cap of General Motors Co. and Ford Motor Co.

* BYD Co. Ltd.'s North American arm joined a group of executives urging California Gov. Gavin Newsom to invest at least $2.9 billion over the next five years to accelerate the adoption of zero-emission medium- and heavy-duty vehicles, or M-HDVs. The Chinese electric-vehicle maker said the funding would result in about 25,000 zero-emission M-HDVs on roads by 2025.


* Volkswagen said it launched a self-driving research and development company in California, called Volkswagen Autonomy Inc., as a subsidiary to its main self-driving company, Volkswagen Autonomy GmbH. The unit will be based in VW's Belmont engineering center and hire 50 to 100 people in 2020.

* China's FAW Car and Alibaba agreed to jointly develop intelligent-connective vehicles using the Banma Intelligent Operation System. Alibaba will lend its cloud facilities to develop digital infrastructure for the vehicles, while FAW will use its data intelligence tech for research and the cars' development and operations.


* Uber Technologies Inc. said it made changes to its ride-hailing platform in California, effective immediately, to adhere to a new state law that requires gig economy companies to categorize workers as employees. Drivers in California will now see estimated earnings and trip destinations prior to accepting a booking and will only pay a maximum service fee of 25% per ride. Under the new law, Uber and other gig-economy companies like Lyft Inc. and food-delivery service DoorDash are no longer allowed to classify their workers as independent contractors.

* Free Now, a ride-hailing app co-owned by Daimler AG and Bayerische Motoren Werke AG, ordered 60 Tesla vehicles for its German operations, Electrek reported, citing a German-language report by Handelsblatt.

* Lyft said it teamed up with JP Morgan Chase to develop a rewards program for users of Chase-branded credit cards. Customers can receive multipliers on rewards points or 5% cashback on rides, along with other benefits.

* FlixMobility GmbH, which operates an app that sells tickets for different forms of public transport, said it grew its passenger count by 37% in 2019 to 62 million, Reuters reported. FlixMobility, which usually partners with bus and train companies, said it set its sights on India for potential expansion and that it began recruiting in the market, a spokesman said.


* U.S. federal prosecutors began investigating United Auto Workers President Rory Gamble and his connection to former vice president Jimmy Settles as part of a corruption and bribery investigation into the union, The Detroit News reported, citing sources.

* Takata Corp. will recall 10 million more airbag inflators in the U.S., including some that were installed to replace other airbags and some that were never installed, Reuters reported. The National Highway Traffic Safety Administration is reviewing petitions from carmakers including General Motors to prevent more recalls of the potentially lethal airbags, with the carmaker saying a recall of 6 million more airbags will cost it about $1.2 billion. In December 2019, Takata was reportedly facing a 100 million-airbag recall.

* The National Highway Traffic Safety Administration said it will investigate another fatal crash that involved a Tesla Inc. electric vehicle, Bloomberg News reported. According to an incident report from the Indiana State Police, the Tesla car slammed into the back of a parked firetruck on an Indiana highway, leaving the wife of the Tesla's driver dead after succumbing to injuries sustained during the crash.

* The Competition Commission of India, or CCI, is investigating claims that Maruti Suzuki India Ltd. suppressed competition and limited consumer choice by pushing its own insurance policies onto customers, Reuters reported, citing sources. India's largest carmaker reportedly used "tie-in arrangements" that let it promote preferred suppliers to customers. A representative told Reuters that "we are not aware of any such alleged complaint that is being investigated by CCI and therefore cannot comment on the same."


* Tenneco Inc. shares plunged 20.27% to $11.05 on Jan. 8 amid leadership shakeup and pressure from an activist investor to sell itself. Tenneco said its co-CEO, Roger Wood, was leaving the company and reinforced commitment to spin off its aftermarket and ride performance business DRIV and the remaining powertrain business. The moves are a part of the company's efforts to reduce debt amid pressure from activist investor Dan Ninivaggi, who wrote to the auto supplier Jan. 6, demanding it to replace half its directors and raise cash to pay off debt by listing itself or its aftermarket-parts unit for sale, Bloomberg News reported.

* Automotive-parts maker LCI Industries said its subsidiary LCI Industries BV has completed its acquisition of Dutch window supplier Polyplastic Group BV for an undisclosed sum.


* Mexico's auto exports fell to 3.3 million vehicles in 2019, down 3.4% and marking the first decline in a decade, Reuters reported, citing industry association AMIA's outgoing President Eduardo Solis. Vehicle production fell 4.1% to 3.8 million in 2019, marking the second consecutive year of decline.

* Daimler-owned Mercedes-Benz sold a record 2,339,562 vehicles in 2019, up 1.3% from 2018 and breaking its record for the ninth straight year.

* Chicago-based LKQ Corp. said it agreed to sell its equity interests in two Czech wholesale automotive parts distributors to Swiss Automotive Group AG for an undisclosed amount.

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The day ahead

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

In Asia, the Hang Seng increased by 1.68% to 28,561.00, while the Nikkei 225 was up 2.31% to 23,739.87.

In Europe, around midday, the FTSE 100 increased by 0.55% to 7,616.24, and the Euronext 100 increased by 0.49% to 1,161.09.

On the macro front

The jobless claims report, EIA natural gas 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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