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VW brand to cut up to 7,000 jobs; Nissan's Infiniti to exit Western Europe


VW brand to cut up to 7,000 jobs; Nissan's Infiniti to exit Western Europe

TOP NEWS

* Volkswagen AG's namesake brand said it will cut up to 7,000 positions as part of a plan to save €5.9 billion annually and raise its operating margin to 6% by 2023. The passenger car brand said more than 9,000 employees have signed early retirement contracts and will leave the company by 2020, and it is in the process of hiring 2,700 people in the future-oriented business areas such as software development, connectivity and new mobility solutions. The company intends to use the cost savings from the plan, which includes measures such as reducing operational and product complexity and material costs, to implement its digital transformation and boost its electrification efforts. Under the 'Pack for the Future' plan, the brand said it has earmarked €19 billion in the electrification of its cars and digitalization of the company through 2023, €8 billion more than initially planned.

* Infiniti, Nissan Motor Co. Ltd.'s luxury division, said it will withdraw from Western Europe in early 2020 to help the brand focus on its North American and Chinese markets. Production of the Infiniti Q30 and QX30 crossover models will end by mid-2019 at the automaker's manufacturing plant in Sunderland, U.K. In North America, Infiniti will focus on its SUV lineup. In China, the automaker will add five vehicles over the next five years. Nissan previously abandoned plans to make its X-Trail crossover at the plant over uncertainty surrounding Brexit and reportedly is considering reducing production of its Qashqai and Leaf vehicles.

CARMAKERS

* Mitsubishi Motors Corp. said COO Trevor Mann will exit the company, effective April 1, and will be replaced by Ashwani Gupta, while Nissan Motor Co. Ltd. said Arun Bajaj, its senior vice president for human resources, left the company March 11. Bajaj previously was sent on leave as the carmaker investigated former chairman Carlos Ghosn. The management reshuffles at the two Japanese companies come a day after the formation of a new four-member alliance board to be led by Renault SA Chairman Jean-Dominique Senard.

* Ford Motor Co. expects to incur over $1 billion in health insurance costs for its 56,000 U.S. workers in 2020, Bloomberg News reported, citing a source close to the matter. The estimate could further complicate Ford's contract negotiations with the United Auto Workers over its $11 billion restructuring plan, which involves slashing shifts and about 20,000 job cuts globally.

* The joint venture between General Motors Co. and China's SAIC Motor Corp. Ltd. expects to launch 60 new or redesigned models by 2023-end, with 18 models to be launched in 2019. SAIC-GM also aims to make more than nine new domestic plug-in or pure electric vehicles covering passenger cars, SUVs and luxury cars during the period. Separately, SAIC Motor's February sales dipped 21.23% year over year to 362,945 units, hurt by falling sales at its JVs with GM and Volkswagen AG, Gasgoo reported.

* Hyundai Motor Co. plans to invest 36.6 billion South Korean won for expanding its Brazilian production by 14% to meet rising demand, Yonhap News Agency reported, citing a company spokesman. Hyundai reportedly aims to raise annual production at its Sao Paulo plant to 210,000 vehicles from 180,000 vehicles.

ELECTRIC AND AUTONOMOUS VEHICLES

* A federal judge granted the SEC permission to respond by March 19 to Tesla Inc. CEO Elon Musk's claim that he should not be held in contempt. Federal Judge Alison Nathan wrote in the court documents that the SEC and Musk have until March 26 to decide on an evidentiary hearing. On March 11, Musk refuted the SEC's claim that his Feb. 19 tweet about Tesla's production numbers violated an agreement between the two parties.

* Volkswagen AG's luxury car brand Porsche AG said it is investing more than €600 million to expand its Leipzig, Germany-based facility, which will produce Porsche's Macan series of fully electric cars from the beginning of the next decade. As part of the investment, Porsche laid the foundation of a new body shop having a total area of 75,500 square meters.

* An International Energy Agency expert has told battery minerals hopefuls at a Perth, Western Australia, mining conference that electric cars will reach price parity with internal combustion engine cars in five years, but limited driving range, charge infrastructure and high purchase costs remain as barriers.

* Ramzi Hermiz, CEO of Shiloh Industries Inc. that supplies parts to Tesla Inc., said during a post-earnings call that the company is working with the U.S. electric-car maker to help lighten the Model 3 sedan.

* Geely Automobile Holdings Ltd. is set to release the GE11, or Jihe A, its first battery-electric vehicle intended for global markets, on April 11 in Singapore with an expected price range between 150,000 Chinese yuan and 170,000 yuan, Gasgoo reported.

POLICY, REGULATIONS AND SAFETY

* The U.K. government said it would exempt tariffs on 87% of total imports into the country in case of a no-deal Brexit. The government, however, would retain a number of tariffs on finished vehicles under its Temporary Tariff Regime published after the Parliament voted down Prime Minister Theresa May's Brexit deal with the European Union, paving the way for votes on a no-deal Brexit and potentially on a delayed departure from the bloc. The temporary order added that carmakers dependent on EU supply chains would not face additional tariffs on parts imported from the bloc. Mike Hawes, the chief executive of the U.K.'s largest auto trade group, SMMT, said the tariffs announcement "does not resolve the devastating effect" a no-deal Brexit. "No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from 'no deal.' It's staggering that we are in this position with only days until we are due to leave," he said.

* U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee that he hopes trade talks with China are in the final weeks but cautioned that major issues still must be resolved to reach a ceasefire in the crippling trade war.

AUTO PARTS AND EQUIPMENT

* Ford Motor Co. is looking to cement supply deals with lithium producers to gain access to the metal, a key ingredient of electric-vehicle batteries, Reuters reported. The company is "looking at the entire supply chain," executive chairman Bill Ford reportedly said, without naming a specific company.

* South Korean proxy adviser KCGS recommended Hyundai Mobis Co. Ltd. shareholders to vote against Elliott Management Corp.'s proposals for the parts-maker, which are part of the U.S. activist investor's larger shake-up plans for parent Hyundai Motor Group, Reuters reported. KCGS reportedly said Elliott seems to be focusing on short-term gains instead of considering future challenges.

* Hyundai Mobis invested 5.5 billion South Korean won in Chinese artificial intelligence startup Beijing DeepGlint Technology Ltd. to help develop future vehicle technologies, Yonhap News Agency reported. Mobis aims to further invest in overseas companies dealing with future vehicle technologies like autonomous and connected cars, a company spokesman reportedly said.

AUTOMOTIVE RETAIL

* China ZhengTong Auto Services Holdings Ltd's luxury-car financing unit, Shanghai Dongzheng Automotive Finance Co., is looking to raise as much as $428 million in a Hong Kong IPO, Bloomberg News reported. The unit, which is offering 533.3 million shares at HK$4.20 to HK$6.30 apiece, reportedly expects to price the offering March 19 and start trading March 26.

* Uber Technologies Inc. added six more investment banks to its list of IPO underwriters and plans to hire more banks in the coming weeks, ahead of its stock market debut, Reuters reported, citing sources familiar with the matter. Bank of America Corp., Barclays PLC, Citigroup Inc., Allen & Co. Inc., Deutsche Bank AG and JMP Securities LLC will join Morgan Stanley and Goldman Sachs Group Inc., which the California-based ride-hailing service hired in 2018 to lead the IPO. Separately, the ride-hailing firm settled for $20 million a 2013 lawsuit brought about by drivers in California and Massachusetts who sought to be recognized as employees instead of independent contractors, Reuters reported.

* Volkswagen AG's namesake brand posted a 2.2% year-over-year fall in February worldwide deliveries of 398,100 vehicles as Jürgen Stackmann, VW sales board member, said the situation in its largest market, China, "remains the greatest uncertainty" for the company in 2019. Deliveries in Europe rose 1.8% year over year to 130,900 units in the month, offset by an 8.6% decrease in Asia-Pacific deliveries of 183,900 vehicles.

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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 was down 0.39% to 28,807.45. The Nikkei 225 fell 0.99% to 21,290.24.

In Europe around midday, the FTSE 100 was up 0.05% to 7,154.95 and the Euronext 100 was 0.24% higher at 1,023.73.

On the macro front

The durable goods orders, PPI-FD, construction spending, e-commerce retail sales and EIA petroleum status reports 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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