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Trump orders security probe on auto imports; Apple, VW sign taxi pact

TOP NEWS

* China criticized the Trump administration's decision to launch a national security probe that could lead to a 25% U.S. tariff on auto imports, calling it an "abuse of national security clauses," Reuters reported. Japan warned that such a measure "would be an extremely far-reaching trade sanction that would put the global market into turmoil," according to the Associated Press. Mazda Motor Corp., Subaru Corp., Mitsubishi Motors Corp. and Tata Motors Ltd.-owned Jaguar Land Rover Ltd., which import all their vehicles in the U.S., as well as German carmakers Volkswagen AG and BMW Group are expected to be hit hard by the potential tariffs, Bloomberg News reported.

* Apple Inc. partnered with Volkswagen AG to modify some of the German automaker's T6 Transporter vans as self-driven, electric vehicles to ferry the iPhone maker's employees between two of its Silicon Valley, Calif. offices, The New York Times reported, citing five people familiar with the matter. Apple picked VW reportedly after talks with other automakers like BMW Group, Daimler AG-owned Mercedes-Benz, Japan's Nissan Motor Co. Ltd. and China's BYD Co. Ltd. failed to yield any outcome. The two companies will modify the vans at a facility in Turin, Italy, run by VW unit Italdesign, where Apple will put in a new dashboard, seats, sensors and a large electric battery into the vans, the newspaper reported.

CARMAKERS

* Tata Motors Ltd. said net profit attributable to shareholders for the fourth quarter ended March 31 reached 21.25 billion Indian rupees, or 6.24 rupees per share, down from 42.96 billion rupees, or 12.63 rupees per share, in the prior-year quarter largely caused by a one-time charge of 12.29 billion rupees in the fourth quarter. Net profit for Tata Motors in fiscal 2018 came in at 89.89 billion rupees, or 26.45 rupees per share, compared with 74.54 billion rupees, or 21.93 rupees per share, a year earlier. Separately, the company is looking to sell off its noncore businesses in defense and aerospace, as well as a construction machinery joint venture with Hitachi Ltd., to focus on its core operations, Business Standard reported, citing company CFO P.B. Balaji.

* Tata Motor's flagship British luxury brand Jaguar Land Rover Ltd. said it will spend about £4.5 billion in the current fiscal year on new models and technologies as it looks to spur sales that grew at a slower pace during the fiscal year ended March 31. Sales of Jaguar Land Rover grew 1.7% year-over-year to 614,309 cars, largely driven by sales growth of 19.9% in China and 4.7% in North America, but was offset by a 12.8% drop in the U.K. and 5.3% decline in Europe due to a volatile market related to diesel cars.

* Volvo Cars expects to boost production of its XC40 model at the company's Ghent, Belgium, and Luqiao, China, plants in the first half of 2019 on increased demand for the small SUV. The XC40, which "surpassed" the Geely Automobile Holdings Ltd.-owned company's "highest expectations" after logging 80,000 bookings to date, will be used as a springboard to make newer, smaller models based on Volvo's compact modular architecture. The new models will include fully electric vehicles and will be sold globally, the company added.

* Russian automaker OAO Avtovaz's majority shareholder Alliance Rostec Auto BV, a joint venture between state conglomerate Rostec and Renault SA, filed documents for approval from the country's central bank to launch a mandatory tender offer for shares owned by Russian car manufacturer Avtovaz's minority shareholders. Alliance Rostec triggered the mandatory threshold of 75% after a closed subscription increased its stake in the automaker to 83.5%.

ELECTRIC AND AUTONOMOUS VEHICLES

* Toyota Motor Corp. said it will build a new facility at its Honsha Plant in Toyota City to mass-produce fuel cell stacks, a key component of fuel cell vehicles, as part of its plan to ramp up production of fuel cell electric vehicles after 2020. The company will also start a new production line at its existing Shimoyama Plant, No. 3, in Miyoshi City to make high-pressure hydrogen tanks. Both facilities are scheduled to begin operations around 2020. The Japanese automaker forecasts fuel cell electric vehicle sales to reach at least 30,000 globally after 2020 from 3,000 in 2018.

* Uber Technologies Inc. is winding up its self-driving car trials in Arizona following a fatal crash involving one of its vehicles and will now carry out limited testing in Pittsburgh, Pa., as well as San Francisco and Sacramento, Calif., Reuters reported, citing an Uber spokeswoman. Affected Uber employees in Arizona reportedly will be offered help to find other opportunities. The ride-hailing service provider is yet to obtain clearance from California regulators and needs to undergo a federal review before resuming tests in Pittsburgh.

REGULATIONS AND SAFETY

* California Air Resources Board Chair Mary Nichols met with auto industry and federal officials in Washington over the proposed easing of national vehicle emission norms, Bloomberg News reported. Both sides said they will continue the talks, while two auto industry lobby groups, the Alliance of Automobile Manufacturers and the Association of Global Automakers, said the industry supported "continuous, year-over-year improvements in fuel economy" that takes into account "marketplace realities," Bloomberg News reported.

* Kia Motors Corp., Renault Samsung Motors Co. Ltd., Daimler AG-owned Mercedes-Benz's South Korean unit, Volvo Korea and Volkswagen AG-unit Porsche's South Korean unit will voluntarily recall nearly 290,000 cars across 30 different models in the country to fix defective parts, Yonhap News Agency reported, citing a release by the Ministry of Land, Infrastructure and Transport. Car models like the Kia Carnival minivan, the Mercedes-Benz GLC 220d 4MATIC coupe and Volvo's XC90 SUV reportedly are being recalled to correct problems ranging from a defective sliding door system to a coolant leakage.

AUTO PARTS AND EQUIPMENT

* French auto parts maker Autodis SAS decided to put off its planned IPO due to a "cautious" market environment, Reuters reported. The Bain Capital-owned company, reportedly valued by bankers at more than €1.2 billion, said it will strengthen its expansion initiatives in Western Europe.

AUTOMOTIVE RETAIL

* South African internet and media company Naspers Ltd.'s classifieds business OLX invested $89 million in Berlin-based used car online marketplace Frontier Car Group, or FCG, to help the startup expand into emerging markets like Kenya, Ghana and elsewhere, the Financial Times reported. FCG, which already runs in six countries including Nigeria, Mexico, Chile and Pakistan, reportedly would now focus on Naspers' home market of South Africa across Johannesburg, Cape Town and Pretoria.

TRUCKS AND MOTORCYCLES

* Volkswagen Truck & Bus GmbH's Scania truck brand said it forecasts commercial transport system to become fossil-free by 2050, helped by better routing and load management initiatives and a switchover to biofuels and electrified vehicles. To that effect, the company formed a coalition with German utility company E.ON SE, engineering company Siemens AG and Swedish apparel retailer H&M Hennes & Mauritz AB that will identify areas of innovation and partnerships within their respective operations toward sustainable commercial transport practices.

The day ahead

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

In Asia, the Nikkei 225 dropped 1.11% to 22,437.01, while the Hang Seng was up 0.31% to 30,760.41.

In Europe, around midday, the FTSE 100 slid 0.01% to 7,787.43, and the Euronext 100 rose 0.44% to 1,080.45.

On the macro front

The jobless claims report, the FHFA House Price index, the existing home sales report, the EIA natural gas report, the Kansas City Fed Manufacturing index, the Fed balance sheet and the money supply report are due out today.

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