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Nissan seeks $1B deal for trading arm; BMW should buy JLR, says Bernstein

TOP NEWS

* Nissan Motor Co. Ltd. is looking to sell Nissan Trading Co. Ltd., its wholly owned subsidiary that distributes vehicle components and raw materials, in a potential deal worth about $1 billion, Bloomberg News reported, citing people familiar with the matter. The sources told the news outlet that the Japanese carmaker has invited private equity and trading firms to sell the business and may pick a buyer as early as October.

* Analysts from research company Sanford C. Bernstein said Bayerische Motoren Werke AG could boost its earnings by 20% by buying Tata Motors Ltd.-owned struggling British luxury-car maker Jaguar Land Rover Automotive PLC for £9 billion. Analysts including Max Warburton said BMW, which is "awash with cash" and having difficulty expanding its product range, could acquire JLR, which is drowning in growing costs and trying to complete a £2.5 billion restructuring.

CARMAKERS

* General Motors Co. removed healthcare benefits for its striking employees as the stoppage surpassed the two-day length of the 2007 strike, Reuters reported. GM reportedly said that decision to withdraw benefits was standard practice during stoppages. The United Auto Workers said it would "provide medical assistance," or cover employees healthcare fees under COBRA in the interim from the pool of money it keeps for strikes.

* The White House denied any involvement in the wage contract talks between General Motors and the UAW, Reuters reported, citing a spokesman. President Donald Trump initially offered federal mediation to help end the UAW strike, which is reportedly costing General Motors up to $100 million per day.

* Toyota Motor Corp. will invest an additional $391 million in its truck assembly plant in San Antonio, Texas, as part of its plan to invest $13 billion in its U.S. operations by 2021. Toyota plans to use the fund to make the plant more efficient and flexible with multi-vehicle production through advanced manufacturing technologies. Toyota-affiliate Aisin Seiki Co. Ltd. said it will also invest $400 million into San Antonio to build an auto-parts production site that will employ 900 people, Bloomberg News reported.

* Indian automaker Tata Motors said it partnered with U.K.-based What3Words Ltd to equip its cars with the latter's plug-in addressing system. What3Words' system allows drivers to enter a three-word address through voice or text input and then navigate to that address within three meters of the destination location. It also has an AutoSuggest feature that helps drivers spot and correct mistakes in the address.

ELECTRIC AND AUTONOMOUS VEHICLES

* Daimler AG said it will source lithium-ion cells for its electric trucks from Chinese battery giant Contemporary Amperex Technology Co. Ltd. beginning in 2021. The supply agreement will include the Mercedes-Benz eActros, Freightliner eCascadia and Freightliner eM2, the German automaker said.

* A group of Chinese companies, including SAIC Motor Corp. Ltd. and Huawei, jointly launched the 5G Automotive Association at the World Autonomous Vehicle Ecosystem Conference, Gasgoo reported. The group, which will pilot a 5G-connected smart mobility project, was co-founded with the local government of Shanghai's Jiading district.

MOBILITY SERVICES

* Per-driver costs for Uber Technologies Inc. and Lyft Inc. in California could jump 30% starting in 2020 after the state passed a new law that may cause the ride-hailing companies to label workers as regular employees, according to industry experts. The law, which awaits California Gov. Gavin Newsom's signature, would go into effect in January. It will require gig economy companies to classify their workers as employees instead of independent contractors if the workers meet certain criteria.

* The Independent Drivers Guild, which represents Uber and Lyft drivers, said it began a protest after both apps made unspecified changes that would result in less pay for drivers, CNBC reported. Uber recently imposed restrictions on the number of drivers that can be in low-demand areas, the report said.

* Uber plans to expand its Uber Freight business by hiring employees for a new logistics hub it plans to build in Chicago, The Wall Street Journal reported, citing a statement. The ride-hailing app is reportedly looking for other sources of income as its core business continues to weaken.

* Fair, a subscription service for leasing used cars, secured a $500 million revolving-credit deal with Japan's Mizuho Bank so that it can grow its partnership with Uber, Automotive News reported. The startup said it will use the funds to increase the size of its fleet of vehicles for Uber drivers.

* GrabTaxi Holdings Pte Ltd. said that Dutch brewer Heineken will have access to Grab's mobility, food, delivery and payment services to boost Heineken sales across Southeast Asia.

POLICY, REGULATIONS AND SAFETY

* Democratic senator Amy Klobuchar said the Justice Department's probe into four carmakers siding with California's emissions rules over Trump's "appears to have less to do with protecting competition than with intimidating parties that don't fall into line with the Trump administration's plan to relax emissions standards," Bloomberg News reported. Ford Motor Co., Honda Motor Co. Ltd., BMW and Volkswagen AG are being probed after signing an emissions deal with California agreeing on stricter emissions laws, although executives from the House Judiciary Committee said the move is just part of "a profoundly troubling pattern of abuse of power" under Trump.

AUTOMOTIVE RETAIL

* S&P Global Ratings said it expects global light-vehicle sales to fall 2% to 3% in 2019, with "virtually no growth" through 2020 and 2021. The rating agency said the ongoing U.S.-China trade war, Brexit tensions and recession risks will continue to hurt global trade and erode consumer confidence, weakening the prospect for auto sales. Initially, S&P Global Ratings expected 2019 global auto sales to remain flat or decline by 0.5% year over year.

* European passenger car sales dropped 8.4% year over year in August to 1.04 million vehicles, with Spain and France suffering the largest declines as the countries saw sales drop 30.8% and 14.1% to 74,490 and 129,257 vehicles, respectively. Daimler posted the strongest sales increase at 71,736 vehicles, up 23.2%. Renault SA saw sales fall 23.6% to 106,978, while Fiat Chrysler Automobiles NV's sales plunged 26.6% to 52,855.

* U.K. car dealer Pendragon PLC saw shares drop 13% to 9.50 pence after it canceled its dividend and issued a forecast of an annual loss at the bottom of its expectations. Pendragon, which will also shut down 22 stores, named Bill Berman its interim executive chairman, effective Oct. 1, as it continues the search for a new CEO. For the first half, Pendragon reported a £32.2 million loss, from a profit of £28.4 million in the prior-year period on weaker sales and Brexit tensions.

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The day ahead

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

In Asia, the Hang Seng lost 0.13% to 26,754.12, and the Nikkei 225 declined 0.18% to 21,960.71.

In Europe, around midday, the FTSE 100 rose 0.05% to 7,324.54, and the Euronext 100 was up 0.16% to 1,089.03.

On the macro front

U.S. housing starts, the U.S. Energy Information Administration Petroleum Status Report, the Federal Open Market Committee meeting announcement, the FOMC forecasts and the Fed chair press conference 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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