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Peugeot CEO criticizes FCA's Renault offer; Nissan to 'respond carefully'

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Peugeot CEO criticizes FCA's Renault offer; Nissan to 'respond carefully'

TOP NEWS

* Peugeot SA CEO Carlos Tavares said Fiat Chrysler Automobiles NV's proposal to merge with Renault SA is a "virtual takeover." He said the Italian American carmaker chose Renault after its value plummeted over a governance scandal with its now-ousted Chairman Carlos Ghosn, Bloomberg News reported. Criticizing the deal, the executive said in a memo to its officials that FCA's proposal to merge with Renault seemed "particularly opportunistic, [and] largely to its benefit." Tavares said a potential deal could weaken or "even lead to an unwinding" of Renault's alliance with Nissan Motor Co. Ltd. Peugeot reportedly was looking for a tie-up with Fiat Chrysler, including plans to build a "super platform" to cut costs in Europe.

* Nissan Motor Co. Ltd. CEO Hiroto Saikawa said the company will consider FCA's merger proposal to Renault and will "respond carefully" depending on the contracts and how assets could be passed on, the Nikkei Asian Review reported. The executive also said he "need[s] to meet and talk directly with FCA Chairman John Elkann" and that Renault Chairman Jean-Dominique Senard "should not be concerned" about the fate of Nissan after a potential merger. Separately, Senard told Tokyo reporters that its merger with FCA will not involve plant closures or large-scale job cuts, Bloomberg News reported. Senard also expects the deal to secure regulatory approvals without trouble.

CARMAKERS

* Toyota Motor Corp. confirmed that it is building its first production facility in Myanmar, where it plans to produce the Hilux truck starting February 2021. To support the plan, the Japanese carmaker said it will spend $52.6 million to establish Toyota Myanmar Co. Ltd., its first production company in the country. Toyota will own 85% of the new entity, with its financing unit, Toyota Tsusho Corp., holding the remaining 15%.

* Indian carmaker Mahindra & Mahindra Ltd. posted a 20.54% year-over-year decrease in first-quarter income at 841.16 million rupees and a 19.73% decrease in diluted EPS at 7.12 rupees per share. The Mumbai-based company, which also builds tractors, attributed the declines to poor demand in both its agricultural segment, which fell 8.4% due to adverse weather, and its automotive segment, which faces a sluggish economy.

ELECTRIC AND AUTONOMOUS VEHICLES

* Tesla Inc. CEO Elon Musk emailed employees saying the company has "a lot of catching up" to do to meet its target for record deliveries in the second quarter, Electrek reported. Musk's leaked email also said Tesla received over 50,000 new orders for the quarter and that it needs to address the costs of "getting a car from our factory to the customer," which dents the carmaker's profit and makes it more difficult to break even. Musk in September 2018 said Tesla was facing delivery logistics hell.

Tesla will also revamp its factory in Fremont, Calif., to build its Model Y SUV and a minimalist version of its Model S, CNBC reported, citing employees. If the electric-car maker decides to build the Model Y in California, it would have to combine its Model S and Model X production into a single line, the insiders reportedly said.

* Tesla CEO Elon Musk said his net payout for 2018 was "net negative" after paying for an undisclosed amount of company expenses. Musk's tweet was in response to The New York Times study that Musk was the highest paid executive in 2018. He received nearly $2.3 billion in 2018, which was more than the next 65 highest-paid CEOs combined. In a follow-up tweet, the executive said that there is currently an active campaign to spread "fear, uncertainty and doubt" about Tesla.

* Google-backed self-driving startup Waymo LLC said it will resume testing its Chrysler Pacifica trucks on Arizona freeways. Waymo, which stopped testing the trucks in the area in 2017, said safety drivers will be present to take control if necessary.

MOBILITY SERVICES

* Uber Technologies Inc. will start deactivating riders with significantly below-average ratings under its updated guidelines. The company said its riders will receive tips on how to improve their ratings, such as behaving politely, refraining from leaving trash in the vehicle and avoiding requests for drivers to go beyond the speed limit.

* New York-based electric-scooter startup Revel said it launched a fleet of 1,000 new mopeds in New York City, Electrek reported. The mopeds travel at a top speed of 30 miles per hour and can be rented for 25 cents per minute.

* Transportation service provider Firstgroup PLC said it will sell off its U.S.-based intercity coach operator business Greyhound and London-based bus service First Bus in a bid to streamline its portfolio and focus on its school bus and shuttle services businesses. FirstGroup said it will also sell U.K.-based rail franchising business First Rail as part of the restructuring.

AUTO PARTS AND EQUIPMENT

* Goodyear Tire & Rubber Co. director Michael Morell will step down on May 31 to advise 2020 U.S. presidential candidates on national security issues.

AUTOMOTIVE RETAIL

* The U.K. saw car production declined 44.5% year over year in April to 79,971 vehicles as factory shutdowns took effect in many plants across the U.K., according to data by a local industry body. April's drop would be the 11th straight month of production decline as the British car manufacturing industry is hit by slowing demand in key international markets, including the EU, China and the U.S., as well as at home, the Society of Motor Manufacturers and Traders, or SMMT, said. Meanwhile, the U.K. commercial vehicle production dropped a whopping 70.9% to 2,162 automobiles because of the plant closures, SMMT said.

TRUCKS AND MOTORCYCLES

* Daimler AG said its truck arm will invest €500 million into self-driving trucks, with the aim of having level 4 self-driving trucks on the road within 10 years. Daimler Trucks also formed the Autonomous Technology Group to consolidate all its self-driving activities, including testing, production, and research and development for the trucks.

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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 lost 0.44% to 27,114.88, while the Nikkei 225 dropped 0.29% to 20,942.53.

In Europe, around midday, the FTSE 100 rose 0.51% to 7,221.79, and the Euronext 100 was up 0.47% to 1,027.79.

On the macro front

The GDP report, the international trade in goods report, the jobless claims report, the corporate profits report, the retail inventories [Advance] report, the wholesale inventories [Advance] report, the pending home sales index, the EIA natural gas report, the EIA petroleum status 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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