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Uber Q1 loss beats Street; Asian carmakers suffer as US vows tariffs on Mexico

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Uber Q1 loss beats Street; Asian carmakers suffer as US vows tariffs on Mexico

TOP NEWS

* Uber Technologies Inc. posted a narrower-than-expected quarterly net loss in its first earnings report as a public company. Net loss for the quarter ending March 31 came in at $1.01 billion, as compared to a net income of $3.75 billion in the year-ago period. Analysts expected the company to post a net loss excluding exceptions of $1.06 billion for the quarter, according to S&P Global Market Intelligence. The loss figure was also in line with company expectations. In a filing ahead of its IPO, Uber said it was expecting to report a net loss of $1 billion to $1.11 billion. San Francisco-based Uber's shares were up 0.85% to $40.14 in after-hours trading.

* Shares of Asian carmakers and suppliers tumbled as the U.S. said it will impose a 5% tariff on all imports from Mexico beginning June 10 and will gradually raise the rate to 25% by October if the Latin American country fails to take steps to "dramatically reduce or eliminate the number of illegal aliens" crossing the border. Japan's top automakers and suppliers have been building vehicles and parts in Mexico for decades. Following the announcement, Toyota Motor Corp.'s stock was down nearly 3%, Nissan Motor Co. Ltd. was down 5.3%, Honda Motor Co. Ltd. was down 4.2%, Mazda Motor Corp. was down 7.2% and DENSO Corp. was down 4%. South Korea's Hyundai Motor Co. and Kia Motors Corp. also fell. The duties will be maintained at 25% "unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory," according to the White House.

CARMAKERS

* Nissan Motor Co. Ltd. could leverage its advanced platforms and electric powertrains to negotiate better terms in a potential merger between Renault SA and Fiat Chrysler Automobiles NV, Reuters reported, citing sources. Renault uses connected platforms and electrification technologies developed by Nissan and Mitsubishi Motors Corp. for a royalty fee. A merged Renault-FCA reportedly may have to renegotiate terms for use of these critical technologies. Nissan holds a 15% non-voting stake in Renault and would see that diluted to 7.5% after the FCA deal, but with voting rights. Nissan did not immediately respond to requests for comment. Separately, FCA Chairman John Elkann sent a letter to Nissan President and CEO Hiroto Saikawa and Mitsubishi Chairman and CEO Osamu Masuko requesting a meeting to allay concerns over the proposed merger, the Nikkei Asian Review reported.

* Italy's Economy Minister Giovanni Tria does not think the country needs to financially back Fiat Chrysler for its potential merger with France's Renault, Reuters reported. The statement comes days after Italy's Deputy Prime Minister Matteo Salvini said it "would be absolutely appropriate" if the country had to take a stake in the merged company. The French government currently owns 15% of Renault.

* Fiat Chrysler CEO Mike Manley sold 250,000 of his company shares for an average price of $13.85 each, or a total consideration of $3.5 million. The executive sold his shares May 28, a day after the carmaker proposed a merger with Renault.

* General Motors Co. plans to invest $24 million in its Fort Wayne assembly plant in Indiana to boost the production of new Chevrolet Silverado 1500 and GMC Sierra 1500 pickups. The Michigan-based automaker will also enhance the plant's conveyors and other tooling to support the increased production.

ELECTRIC AND AUTONOMOUS VEHICLES

* Tesla Inc.'s China arm said it will price the locally made Model 3 from 328,000 Chinese yuan, 13% lower than those it imports, Reuters reported. The electric-car maker will begin deliveries in six to 10 months. The top-end premium Performance variant will retail at 522,000 yuan. Separately, Tesla opened preorders for its Model 3 in Australia, Hong Kong, Japan, New Zealand, Ireland and Macao, with a separate tweet from a customer saying delivery could be scheduled for August.

* Germany will extend its €1.2 billion electric-car incentive scheme through 2020, Reuters reported. The scheme grants buyers cashback of up to €4,000 on new electric cars and offers trade-in premiums for users turning in older vehicles.

AUTO PARTS AND EQUIPMENT

* Goodyear Tire & Rubber Co. said it teamed up with electric-car subscription startup Borrow to provide servicing solutions to the latter's fleet. The tire-maker will use its predictive tire service solution to forecast and schedule maintenance for Borrow. The California-based startup operates a short-term leasing service for electric cars.

* Engine manufacturing in the U.K. dropped 23.4% year over year in April to 177,925 produced as "Brexit upheaval" continues to hurt the industry. Industry body Society of Motor Manufacturers and Traders said the U.K. auto industry needs to secure a favorable deal quickly to turn the situation around.

COMMERCIAL VEHICLES

* Japanese automaker Isuzu Motors Ltd. and U.S.-based engine-maker Cummins Inc. will team up to develop advanced diesel powertrains for commercial vehicles and industrial applications. In October 2018, the pair agreed to collaborate on a power source business.

AUTOMOTIVE RETAIL

* EBay partnered with vehicle repair and maintenance platform CarAdvise, in order to expand its tire installation program, eBay Motors. The program has 9,000 installation sites across the U.S. and ships customers' online tire purchases directly to a nearby automotive repair shop.

The day ahead

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

In Asia, the Hang Seng was down 0.79% to 26,901.09, and the Nikkei 225 fell 1.63% to 20,601.19.

In Europe, around midday, the FTSE 100 was down 0.92% to 7,151.63, and the Euronext 100 was down 1.58% to 1,014.46.

On the macro front

The personal income and outlays report, the Chicago PMI, the consumer sentiment report, the farm prices report and the Baker-Hughes Rig Count 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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