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GM, Honda to jointly make EV batteries; US trade watchdog to probe Toyota, Denso

TOP NEWS

* General Motors Co. and Honda Motor Co. Ltd. entered into an agreement to develop a new battery system that will ramp up both companies' plans for all-electric vehicles. The auto manufacturers said they will build advanced chemistry battery components, including the cell and module, intended chiefly for the North American market.

* The U.S. International Trade Commission said it would investigate Japanese companies Toyota Motor Corp., DENSO Corp., Panasonic Corp., Renesas Electronics Corp. and Japan Radio for alleged patent infringement in certain infotainment systems, components, and automobiles containing such systems. Meanwhile, President Donald Trump said Japanese Prime Minister Shinzo Abe told him during a White House meeting that Japanese investors will open new plants and factories in the U.S., Reuters reported. The news comes as Japan Automobile Manufacturers Association said it is "gravely concerned" about the U.S. probe into auto import duties.

CARMAKERS

* Volkswagen AG's labor council will oppose any proposal by CEO Herbert Diess to spin off the German automaker's noncore assets, Reuters reported, citing VW works council chief Bernd Osterloh. The council, which occupies half of the company's supervisory board that decides on investment strategies, plant closures and executive appointments, will reportedly further discuss how to develop VW's engineering operations.

* Nissan Motor Co. Ltd. rejigged its internal governance structure that aims, among other measures, to appoint independent regional compliance officers and reserving one-third of its board for independent directors, as part of a broader sustainability 2022 strategic plan. The Japanese carmaker also aims to cut CO2 emissions by 40% from its new vehicles by fiscal 2022, compared with fiscal 2000 levels, and to decrease CO2 emissions by 30% from its production and corporate activities by 2022 as compared with 2005 levels.

ELECTRIC AND AUTONOMOUS VEHICLES

* John Krafcik, CEO of Alphabet Inc.'s self-driving car unit Waymo LLC, said at an event in Italy that he sees an opportunity to foray into Europe, possibly by teaming up with a more established partner, across different products and maybe even with different go-to-market strategies, Cnet Roadshow reported. Waymo, which expanded an existing fleet contract with Fiat Chrysler Automobiles NV, reportedly is very close to launching its self-driven car service in San Francisco Bay area and Phoenix, Ariz.

* Ford Motor Co.'s commercial fleet business Ford Commercial Solutions launched two new data-focused products to collect vehicle information such as the car's GPS location, mileage, fuel use data, carbon dioxide emissions, driver seatbelt usage and vehicle health alerts and offer to fleet services and law enforcement agencies later in 2018.

REGULATIONS AND SAFETY

* White House economic adviser Larry Kudlow said he expects "important" bilateral meetings as President Donald Trump and Canadian Prime Minister Justin Trudeau are slated to meet at the G-7 Summit on June 8-9, even as he previously declined to speculate on the prospects for NAFTA being renegotiated in 2019. However, he did say that "communication lines are open" amid tit-for-tat tariffs between the U.S., Mexico and Canada that have muddied the waters of an already troubled NAFTA negotiation.

* The U.S. National Transportation Safety Board, investigating the fatal Tesla Inc. Model X crash in California, said in its preliminary report that the driver did not have his hands on the steering wheel six seconds before the crash despite multiple alerts by the Tesla car prior to the crash. The report confirmed that Tesla's autopilot driver-assistance system was activated at the time of the crash.

AUTO PARTS AND EQUIPMENT

* Cosworth Chairman Kevin Kalkhoven said the U.K.-based auto engine maker expects to file for an IPO on the New York Stock Exchange as early as the end of the first quarter of 2019, Reuters reported. The timing reportedly would allow Cosworth, which recently diversified into making powertrain and electronics technology, to show its "new product revenue and profit potential in real terms." Cosworth, which had sales of $72.5 million in 2017, forecasts making a "significant investment" in its first U.S. plant in the Detroit area, with $50 million to be spent initially on manufacturing equipment set-up in the plant, Reuters reported.

* Genuine Parts Co. said it agreed to acquire German light and commercial vehicle parts supplier Hennig Fahrzeugteile Group through its wholly owned automotive distribution company, Alliance Automotive Group. The buyer said it expects Hennig to produce annual revenues of about $190 million, and subject to customary conditions, the deal is scheduled to close Aug. 1.

* BorgWarner Inc. promoted current Executive Vice President and COO Frederic Lissalde as president, CEO and a director of the company. He will succeed James Verrier, who is retiring as president and CEO but will serve as a nonexecutive advisor to the board and the CEO until his retirement in February 2019.

AUTOMOTIVE RETAIL

* Volkswagen's namesake brand delivered 539,700 vehicles in May, up 5.1% year over year, driven by strong sales in South America and Europe.

* Jaguar Land Rover Ltd., a subsidiary of Indian automotive company Tata Motors Ltd., posted a 6.1% gain year over year in May car sales to a total of 48,281 units during the month. The increase was driven by new models, including the Range Rover Velar, Land Rover Discovery and Jaguar E-PACE, the company said in a statement.

* The interest rate on auto loans climbed to 4.11% year over year in May from 3.93% a year ago, while the rate for a used car loan increased to 4.29% from 4.12% in the corresponding period, an S&P Global Market Intelligence analysis found. Also, overall seasonally adjusted U.S. vehicle sales for the period fell to 5.2 million units on an annualized basis, versus 5.99 million units a year ago.

The day ahead

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

In Asia, the Hang Seng declined 1.76% to 30,958.21, and the Nikkei 225 decreased 0.56% to 22,694.50.

In Europe, around midday, the FTSE 100 was down 0.66% to 7,653.51, and the Euronext 100 was down 0.40% to 1,053.12.

On the macro front

The wholesale trade report and the Baker-Hughes Rig Count report are due out today.

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