VOW.DE - Volkswagen Aktiengesellschaft
| Previous close | 159.70 |
| Open | 159.55 |
| Bid | 159.95 x 22300 |
| Ask | 160.15 x 61000 |
| Day's range | 158.65 - 160.50 |
| 52-week range | 129.60 - 167.40 |
| Volume | 32,310 |
| Avg. volume | 62,956 |
| Market cap | 79.36B |
| Beta (3Y monthly) | 0.78 |
| PE ratio (TTM) | 6.54 |
| EPS (TTM) | 24.44 |
| Earnings date | 30 Oct 2019 |
| Forward dividend & yield | 4.80 (3.01%) |
| Ex-dividend date | 2019-05-15 |
| 1y target est | 195.40 |
- Bloomberg
California Vows Fight as Trump Takes Aim at Clean-Car Authority
(Bloomberg) -- President Donald Trump said he will revoke California’s authority to regulate greenhouse gas emissions from autos, his latest clash with the state that threatens to plunge the auto industry into protracted legal uncertainty.“This is the fight of a lifetime for us. We have to win this and I believe we will,” California Air Resources Board Chairman Mary Nichols said during a defiant press conference after Trump’s announcement Wednesday.Trump’s decision, announced on Twitter, adds to his long-running disputes with liberal California. As he began a two-day fundraising trip in the state Tuesday, Trump derided its homeless crisis while calling out the “tremendous taxes” its property owners pay. That comes on top of his criticism of the state’s management of immigration, forest fires and water policy.California, a heavily Democratic state that’s home to one in eight Americans, has filed more than 50 lawsuits and other protests over the president’s actions.Taking away California’s clean-car authority upends fuel-economy rules negotiated with the auto industry by President Barack Obama. Trump said his administration’s replacement efficiency standards, which are being finalized by federal agencies for cars built after 2020, will lead to greater vehicle production by reducing the cost of new vehicles.“Many more cars will be produced under the new and uniform standard, meaning significantly more JOBS, JOBS, JOBS! Automakers should seize this opportunity because without this alternative to California, you will be out of business,” Trump said in a tweet.Legal experts said the Trump administration may have a tough time defending a suit. A waiver has never been revoked in the 50-year-history of the Clean Air Act, said Julia Stein, a University of California at Los Angeles environmental law expert.“Ironically, even though the administration insists that it will be creating ‘one national standard’ by revoking California’s waiver, it will actually be doing the opposite,” Stein wrote in a blog post Thursday.California officials including Governor Gavin Newsom and Attorney General Xavier Becerra said in a press conference that the state has received roughly 100 waivers to combat air pollution and they would defend the one underpinning its vehicle rules.“This is such a pivotal moment in the history of climate change,” Newsom said, citing statistics on the role of transportation in greenhouse gas emissions. “This is our legacy moment.”With some 35 million vehicles in the state, and the transportation sector’s role as the top contributor of greenhouse gas emissions, Becerra said California’s ability to combat vehicle greenhouse gas emissions is critical to the state’s clean-air goals.“Our message to those who claim to support states rights: don’t trample on ours,” Becerra said. “Doing so would be an attempt to undo the progress we’ve made over the past decades.”Under Trump’s plan, the Environmental Protection Agency will revoke the so-called waiver underpinning the state’s ability to set tailpipe greenhouse-gas emissions standards that are more stringent, as well as the state’s electric vehicle sales mandate. The Transportation Department meanwhile will assert that the California rules are preempted by federal fuel-economy standards administered by the National Highway Traffic Safety Administration.EPA Administrator Andrew Wheeler and Transportation Secretary Elaine Chao have a “major policy announcement” planned at the EPA’s headquarters Thursday morning, the agency said in a statement following Trump’s tweet.Why Trump Attacks California’s Anti-Pollution Powers: QuickTakeDave Schwietert, interim president of the Alliance of Automobile Manufacturers, said the group will review the action and the still-pending federal emissions and fuel-economy standards for 2021 to 2026 to evaluate how they effect its member companies, employees and consumers.Predictable emissions and fuel economy standards are vital for automakers because as they plan production and model offerings several years in the future.“Automakers support year-over-year increases in fuel economy standards that align with marketplace realities, and we support one national program as the best path to preserve good auto jobs, keep new vehicles affordable for more Americans and avoid a marketplace with different standards,” Schwietert said in a statement.The move will shatter a nearly decade-long regulatory arrangement between NHTSA, EPA and the California Air Resources Board that has allowed automakers to satisfy fuel economy and efficiency standards administered by each agency with a single fleet of vehicles that can be sold nationwide.“Our viewpoint is that we want one national fleet” standard for fuel economy and emissions, said Art St. Cyr, vice president of auto operations at American Honda Morot Co. “We don’t want to have a split fleet.”Trump’s move “is bad for California and it’s bad for the country,” said California Democratic Senator Dianne Feinstein. “Revoking California’s authority will lead not only to more pollution, it will cost consumers billions of dollars a year in increased fuel consumption.”California’s Weak Case in Emissions War With Trump: Noah FeldmanThe Trump administration in August 2018 proposed stripping California’s authority as part of its broader plan to slash federal emissions and fuel-economy requirements enacted by the Obama administration.The plan initially recommended capping requirements after 2020 at a 37 mile-per-gallon fleet average, instead of rising each year to roughly 50 mpg. U.S. officials have since signaled that the final rule may require small annual improvements, but at levels far less than required under the current standards. Separating the attack on California’s authority allows that piece of the rule to proceed while federal agencies continue to finalize the new replacement requirements.CARB announced in July an accord with the Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG on compromise tailpipe greenhouse gas emissions regulations, drawing Trump’s ire.The carmakers agreed with the state’s clean-air regulator to boost the fuel efficiency of autos sold in the U.S through 2026.Earlier this month, Trump’s Justice Department opened an antitrust probe into the deal.Free-market groups that have been pushing the administration to roll back the standard cheered the move while environmentalists decried it.“Withdrawing the California waiver is great news for car buyers and drivers. The rapid increase in new car prices should slow down, which means more people will be able to afford to buy a new car,” said Myron Ebell, a director at the Competitive Enterprise Institute, who is one of the main proponents of revoking California’s waiver. “The decision also restores our federalist system. With the waiver, California was for practical purposes put in charge of deciding what kinds of cars people across the nation can buy.”Paul Cort, an attorney for the environmental group Earthjustice, said “It’s bad enough the administration won’t take any meaningful action to clean our air or fight the warming climate that threatens us all; now they want to prevent California and other states from filling that gap.”\--With assistance from Keith Naughton and Andrew Harris.To contact the reporters on this story: Ryan Beene in Washington at rbeene@bloomberg.net;Ari Natter in Washington at anatter5@bloomberg.net;Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
California Has a Weak Case in Emissions Fight With Trump
(Bloomberg Opinion) -- The Trump administration is gearing up for its next big legal fight, taking on California’s long-established authority to set vehicle emission standards for new cars. Because the state is so large, this effectively creates national miles-per-gallon targets for any manufacturer selling vehicles in the U.S. Trump would like to take this power away from California and set lower national MPG standards.The question is, can he do it? Or is this just another example of presidential overreach in an administration that specializes in going too far?The answer turns out to be more complicated than you might think. California’s practices do have a strong basis in a federal law created to let the state fight smog. Yet California may have gone beyond this original mandate and become a regulator acting on par with the federal government — a strange deviation from the norms of U.S. federalism. The issue may eventually make its way to the Supreme Court, and with its current conservative majority, the court could very well decide in favor of Trump.The origin of California’s unusual powers goes back to the Clean Air Act of 1963. The law gives the Environmental Protection Agency authority to set emission standards, and bars states and local governments from setting standards of their own. But Section 209 allows California to apply for a waiver from that ban to allow it to set its own emission standards. The EPA is required to grant California’s waiver unless it finds that California doesn’t need the standards “to meet compelling and extraordinary conditions” or that California was “arbitrary and capricious in its finding that its standards are, in the aggregate, at least as protective of public health and welfare as applicable federal standards.”The reason California got this special treatment back in 1963 was that Congress recognized that the terrible smog in Southern California was largely a product of vehicle emissions. The idea was that California could clean up its air by requiring things like catalytic converters and “check engine” systems to limit tailpipe emissions.It worked, more or less, and California’s skies got somewhat cleaner. And because California was and remains such a huge auto market, manufacturers came to treat the California standards as their de facto requirements for the whole country.The Trump administration is targeting California’s power because of a fight over a proposed EPA rule that reduces 2026 mileage targets of 51 MPG established under the Obama administration. After the Trump administration proposed lowering the standard to 37 MPG, California signed a separate deal with Ford, Honda, Volkswagen, and BMW in which the automakers said they would aim to meet the original target.As far as California is concerned, it’s still simply limiting carbon dioxide emissions and attempting to fight smog … but it’s doing so by setting mileage standards. The Trump administration is poised to argue that California has used its waiver to get into the business of regulating carmakers generally — not just to keep the skies clear over California. Effectively, the Trump demonstration says, California is competing with the EPA as a policymaker setting national standards.If you care about climate change, you might think that’s perfectly fine, especially because California can only set standards that are tougher than the federal government’s, not weaker.But from the standpoint of government design, it’s pretty strange that one state can thwart the will of the executive branch. The governor of California represents Californians; the U.S. president represents the entire country. Even if you don’t like Trump’s policies, you should be willing to admit that he’s the elected president.The technical name for a situation where one state has special powers is “asymmetrical federalism.” The Clean Air Act waiver is one of those highly unusual cases where the U.S. Congress has given asymmetrical powers to one state. Lots of other states have pledged to follow California’s standards; but they don’t have the same legal authority to set standards of their own.When conservative courts come to consider whether California’s mileage standards go too far, expect them to analyze the issue against the backdrop of federalism. Sure, conservatives like states’ rights. But they may not like the idea that one state out of all the others has the capacity to compete with the federal government to make policy. And frankly, if it were not for the environmental twist, many liberal judges would also be skeptical of a state pushing the boundaries of its unique powers.The legal fight is just getting started, and it will take years to wend its way through the courts. If Donald Trump isn’t re-elected, the whole issue will probably go away. If he is, however, we are very likely to see a lengthy fight over federalism, the environment, and just how unique California really is.To contact the author of this story: Noah Feldman at nfeldman7@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Feldman is a Bloomberg Opinion columnist. He is a professor of law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. His books include “The Three Lives of James Madison: Genius, Partisan, President.” For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
European Car Sales Plunge, Deepening Industry Woes
(Bloomberg) -- European car sales fell sharply in August, deepening the woes of an industry battling sluggish demand in key markets and the challenge of rolling out electric vehicles.Registrations dropped 8.4%, the steepest monthly decline this year, according to the European Automobile Manufacturers Association. The fall was partly due to exceptionally high growth a year earlier as manufacturers rushed out models ahead of tough new emissions-testing rules. Volkswagen AG shares lost 0.4% in early trading in Frankfurt and BMW AG was 0.3% lower.In addition to the risk of a recession in Germany, carmakers are also facing a slowdown in the Chinese car market. European sales over the year to date are down 3.2% and the continent’s five biggest markets all contracted in August, with Spain and France posting the biggest slowdowns. The drop last month brought registrations down to 1.04 million units.Nissan Motor Co. and Fiat Chrysler Automobiles NV saw the biggest slowdown in August sales at 47.5% and 26.5% respectively.The industry’s predicament took center stage at the Frankfurt auto show, where thousands of protesters demanded political and industry action to combat climate change. The head of Germany’s auto lobby group also unexpectedly announced his resignation last week.Carmakers at the show displayed their new electric models, which will become crucial in coming months as the companies race to meet new European carbon-dioxide emissions rules. Carlos Tavares, head of the ACEA and chief executive officer of Groupe PSA, last week called for more charging infrastructure to encourage consumers to buy the vehicles.After the August 2018 boost, auto sales dropped dramatically overall and have failed to pick up since, with the association forecasting a 1% drop for the year.While the ongoing issues in the car industry are hitting Germany in particular, there are signs of weakness in manufacturing across Europe. Euro-area economic growth is forecast to slow to 1.1% this year from 1.9% in 2018, which would be its worst performance in six years.The weakness in industry hasn’t had a dramatic impact on the labor market so far. If that changes, and unemployment starts to rise, that would mark a step up in the seriousness of the slowdown. It would also further hurt car sales as consumers rein in big-ticket purchases.Europe’s July sales increase, one of only two monthly gains in 12 months, was almost entirely down to Central European countries, the association said. Only Germany showed positive growth that month among Western European countries.(Adds shares in second paragraph.)\--With assistance from Fergal O'Brien.To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.netTo contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Will Purdue’s Bankruptcy Engulf Its Owners?
(Bloomberg Opinion) -- The bankruptcy of Purdue Pharma LP lays bare a distinction that the internet is making it more and more difficult to maintain: that between a company and the people who own or founded it.The Sackler family owns Purdue Pharma, the maker of the opioid OxyContin, which has contributed to a crisis that has resulted in the deaths of hundreds of thousands of Americans. There are numerous charges and more than 2,000 lawsuits against the company and its owners, and some recent joint settlements. The company has now declared bankruptcy, and wants to give control of Purdue to a trust run by the states, cities and counties that have filed suit against it.But what about the personal fortune of the Sacklers, estimated at $13 billion or more? Under traditional corporate theory, there is a clear distinction between the assets of the corporation and those of the owners. The limited liability company can go under, but the assets of the company owners are safe — just as, say, holding shares of Volkswagen in your mutual fund did not expose you to any personal liability for the automaker’s actions in falsifying emissions data.It turns out that this distinction is harder to uphold, if only in the eyes of the public, when a single family owns and runs a company. Last week New York State alleged that the Sackler family drained at least $1 billion from Purdue for the purpose of avoiding penalties against the corporation and thus shielding its wealth. If it looks like the Sackler family was trying to avoid legal penalties and fines, there will be strong political pressure, possibly backed by public opinion, to go after those additional funds.More generally, if a company is endangered by lawsuits, and the suits are not settled, its owners have a rationale to extract money from the company and stash it far away. But doing so will elicit a legal and public response, and the distinction between the personal and the corporate will not always be respected.Consider the Federal Trade Commission’s recent settlement with Facebook, under which some of founder Mark Zuckerberg’s personal assets are potentially on the line if Facebook does not respect its privacy agreements with the federal government. Some FTC commissioners suggested harsher treatment yet for Zuckerberg’s personal assets.Or, to give another example, Senator Elizabeth Warren has been promoting the notion of personal criminal liability for corporate CEOs if the firms engage in wrongdoing. Her bill would extend corporate liability beyond the company itself, and of course most CEOs of major companies are also shareholders to some extent. Maybe the goal is to punish these individuals in their roles as executives rather than as shareholders. But such penalties would blur these distinctions in the mind of the public — and eventually, perhaps, under the law.So how does the internet matter in all this? First, social media is very effective at drumming up outrage, and negative news seems to have a longer lifespan than positive news. The media’s pre-existing negative bias has been amplified, creating further animosity against any actual or supposed corporate villain.More important, social media personalizes agency — in effect, making it easier to accuse particular individuals of wrongdoing. Mark Zuckerberg, Jeff Bezos, and the Koch brothers all have images or iconic photos that can be put into a social media post, amplifying any attack on their respective companies. It is harder to vilify Exxon, in part because hardly anyone can name its CEO (Darren Woods, since 2017), who in any case did not create the current version of the company. Putting the Exxon logo on your vituperative social media post just doesn’t have the same impact. With Bill Gates having stepped down as Microsoft CEO in 2000, it is harder to vilify that company as well.This personalization of corporate evil has become a bigger issue in part because many prominent tech companies are currently led by their founders, and also because the number of publicly traded companies has been falling, which means there are fewer truly anonymous corporations. It’s not hard to imagine a future in which the most important decision a new company makes is how personalized it wants to be. A well-known founder can spark interest in the company and its products, and help to attract talent. At the same time, a personalized company is potentially a much greater target.The more human identities and feelings are part of the equation, however, the harder it will be to keep the classic distinction between a corporation and its owners. As the era of personalization evolves, it will inevitably engulf that most impersonal of entities — the corporation.(Corrects second paragraph to say that hundreds of thousands of deaths have resulted from the opioid crisis, not the opioid OxyContin, in article published Sept. 16.)To contact the author of this story: Tyler Cowen at tcowen2@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "Big Business: A Love Letter to an American Anti-Hero."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
GM Strike Is the Right Idea in the Wrong Place
(Bloomberg Opinion) -- The United Auto Workers union has gone on strike against General Motors Co., demanding much higher pay, more benefits, more job security and a greater share of profits. One analysis suggested that the work stoppage could cost the auto manufacturer $50 million a day in lost earnings. But there might be another, bigger cost for GM and its workers if the strike drags on.On the positive side, the GM work stoppage, the first in 12 years, has the potential to help revitalize a moribund U.S. labor movement. In recent years there has been a spate of strikes in the country, but they look small in historical context:The iconic nature of the current struggle makes it a potent symbol. It was a 1945 UAW strike against GM that resulted in the so-called Treaty of Detroit in 1950, which resulted in the generous packages of pay and benefits that defined good manufacturing jobs in the postwar U.S. The U.S. has largely shifted to service jobs, but a UAW victory against GM could inspire service workers to organize as well. That would be a step toward rebuilding the American middle class.But there are several reasons why a strike against GM might not be the most effective way to kick off a reborn labor movement. The nature of the industry, the evolution of the global economy since 1950, and the pressures of climate change mean that even if the walkout ends in victory over GM’s management, the UAW strike might end up backfiring.Internationally competitive export industries are not ideal for the kind of aggressive bargaining the UAW is engaging in. When the U.S. was practically the entire market for GM’s cars after World War II, management could accommodate labor’s demands simply by lowering profits, raising prices and increasing wages and benefits without hurting sales. But now, even if Ford joins whatever deal GM eventually reaches with its union, U.S. manufacturers are facing a global market and a slew of overseas competitors.Today, GM isn’t even close to being the world’s biggest auto manufacturer, producing fewer than 7 million vehicles in 2018 compared to more than 10 million at Toyota and Volkswagen. In terms of worldwide revenue, Ford and GM come in fourth and fifth, respectively:At their U.S. factories, these foreign companies generally pay workers substantially less than GM and Ford. Auto workers in Germany and South Korea earn more, but have higher productivity that more than makes up for it. Notably, German unions have often pursued a policy of wage restraint, agreeing to hold down pay increases so that their employers can gain market share. GM and Ford are thus facing an uphill battle against rivals that can produce and sell cars more cheaply.Government policy could help shield GM and Ford from some of that competition. The U.S. could enact high tariffs to protect its markets, and it could mandate that foreign companies use unionized workers (though the latter is highly unlikely to happen unless Democrats win a lot of elections).But even then, there would be international competition to think about. GM now sells more cars and earns more revenue in China than it does in the U.S. Overseas markets have been the main source of growth for American car companies in recent years, with no growth in U.S. vehicle sales in the past four years. And in those crucial overseas markets, GM and Ford are competing with Toyota, Volkswagen and the rest, and tariffs won’t help. Export subsidies might do some good, but other governments can match those.The UAW’s demands could thus force U.S. automakers’ costs to levels that will render GM and Ford uncompetitive in their most important markets. That would lead to loss of market share, resulting in more plant closings and fewer jobs. When the next recession comes, a weakened GM could struggle to survive or even require a bailout like the one needed in the 2008-09 financial crisis.The demands of the global environment may be a negative for GM as well. With anxiety over climate change rising, various presidential candidates are proposing bold plans to switch the U.S. entirely over to electric vehicles within a short space of time. That would upend GM’s core business and make many of its factories obsolete. For GM and Ford to survive in a new green-energy world, they would have to very quickly retool to make electric vehicles. Higher labor costs and pension commitments could make that retooling much more difficult.Although the UAW strike may be inspiring for some, and may have positive consequences for the American labor movement, it may end up being a self-destructive move for GM workers themselves. The UAW should abandon the confrontational approach that worked in 1950 for the more cooperative, pragmatic strategy employed by its counterparts in Germany. It’s in the vast domestic service sector, which is less subject to foreign competition, where unions hold much more promise for wringing big concessions from management.To contact the author of this story: Noah Smith at nsmith150@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters
Volkswagen agrees to Australian settlement over diesel cheating
Volkswagen said on Monday it had agreed to pay up to A$127 million ($87.3 million) to settle lawsuits brought on behalf of thousands of Australian customers caught up in its global diesel emissions cheating scandal. The German automaker said it would pay about A$1,400 each to owners of affected Volkswagen, Audi and Skoda EA189 diesel vehicles who opted into the lawsuit. "This is a significant step toward fully resolving the diesel lawsuits in Australia," a Sydney-based Volkswagen spokesman said in an emailed statement.
- Reuters
BMW engine development expert Duesmann set to become Audi chief in April: report
BMW's engine development and purchasing expert, Markus Duesmann, is set to become the CEO of Volkswagen's Audi premium brand, after BMW dropped its opposition to his early departure, a German newspaper reported on Saturday. The Frankfurter Allgemeine Zeitung cited a person with knowledge of the appointment as saying Duesmann will start as Audi chief on April 1.
- Bloomberg
Michael Bennet Makes First His Ad Buy: Campaign Update
(Bloomberg) -- Michael Bennet, who didn’t make the cut for Thursday’s Democratic debate in Houston, is taking to the airwaves in Iowa with his first media buy of the campaign.The presidential candidate and Colorado senator reserved at least $32,891 in the Des Moines and Ceder Rapids markets, according to Advertising Analytics, which tracks political advertising. The ads are slated to air starting Tuesday.Bennet failed to meet either requirement set by the Democratic National Committee for making the debate stages. The 10 candidates who participated had at least 130,000 unique donors and reached 2% in four national polls. Bennet will need to reach those marks by Oct. 1 to make the cut for the next round, scheduled to begin Oct. 15 in Westerville, Ohio.Spending on ads can boost a candidate’s standing in the polls, but they’re expensive. Billionaire Tom Steyer, who qualified for the October debate after entering the race in July, has spent about $14.3 million on broadcast and cable spots. That’s four times the amount Bennet’s campaign has raised.Democrats Set Next Debate for Oct. 15 in Ohio (2:36 p.m.)The Democratic National Committee announced Friday that the fourth debate of presidential candidates will take place Oct. 15, possibly with a second night on Oct. 16, depending on how many candidates qualify.The forum at Otterbein University in Westerville, Ohio, will be co-hosted by the New York Times and CNN. Eleven candidates have already met the criteria: the 10 who participated in the third debate on Thursday, along with billionaire Tom Steyer, who only qualified recently.To qualify for the debate, candidates must receive at least 2% support in four approved polls conducted nationally or in Iowa, New Hampshire, South Carolina and Nevada. They must also raise money from a minimum of 130,000 unique donors, including 400 contributors in each of at least 20 states by Oct. 1.The October debate will be moderated by CNN’s Anderson Cooper and Erin Burnett and Marc Lacey from the Times. The format has not yet been announced. -- Ryan Teague BeckwithHarris Asks for Inquiry into Probe of Carmakers (11:44 a.m.)Senator Kamala Harris asked the Justice Department’s internal watchdog to investigate the legal underpinnings of an antitrust probe into four automakers that agreed to meet compromise tailpipe emissions targets offered by California regulators.In a letter to the department’s inspector general released Friday by her office, the California Democrat and presidential candidate said the antitrust inquiry “raises serious concerns about whether federal law enforcement is being used to coerce” the companies into abandoning efforts to produce lower-emitting vehicles. The probe also raises questions about whether the Justice Department is being used for political purposes, she wrote.At issue is a July agreement by Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG to meet future vehicle greenhouse gas emissions targets offered by California regulators that are more stringent than under a rollback proposed by the Trump administration but easier than rules adopted by the Obama administration in effect today.Harris’ request comes after other congressional Democrats have vowed to scrutinize the probe, revealed last week. The House Judiciary committee on Monday said it planned to hold hearings and request documents from the White House and Justice Department related to the antitrust probe. -- Ryan BeeneCastro Denies Slap at Biden’s Memory Was Unfair (8:02 a.m.)Julian Castro said he has no regrets about questioning former Vice President Joe Biden’s memory during the 2020 Democratic presidential debate in Houston on Thursday -- a moment that drew boos from the crowd.“I wouldn’t do it differently,“ the former Housing and Urban Development secretary told CNN in an interview early Friday. “That was not a personal attack, this was about a disagreement over what the vice president said regarding health-care policy.“Castro, a former Obama administration colleague of Biden’s, argued during the debate that his health-care proposal was better than Biden’s because people who qualified would automatically be enrolled, rather than having to opt in to Biden’s Medicare plan.“They wouldn’t have a buy in,” Castro said during the debate.When Biden shot back, “They do not have to buy in,” Castro pounced. “Are you forgetting what you said two minutes ago?” he said. “You’re forgetting that?”Castro defended his comments in his CNN interview, saying it’s necessary to highlight the policy differences between Democratic presidential contenders. “The vice president has been around for a long time,“ he said. “When we’re up there, we’re up there to debate.“ -- Kathleen MillerCOMING UPElizabeth Warren will appear Saturday at the Massachusetts Democratic Convention in Springfield.Biden will speak Sunday at the 16th Street Baptist Church in Birmingham, Alabama, to commemorate the 56th anniversary of a bombing that killed four girls and injured 22 other people.On Monday, Biden, Bernie Sanders, Amy Klobuchar, Tulsi Gabbard, Pete Buttigieg and Bill DeBlasio will attend the Galivants Ferry Stump in South Carolina.Also on Monday, Warren will speak at a rally in New York City’s Washington Square Park.Many candidates will appear at the LGBTQ Presidential Forum in Cedar Rapids, Iowa, on Friday. Contenders who have confirmed they will attend are: Biden, Cory Booker, Buttigieg, Castro, Gabbard, Kamala Harris, Klobuchar, Joe Sestak, Warren and Marianne Williamson.\--With assistance from Kathleen Miller, Ryan Beene and Ryan Teague Beckwith.To contact the reporter on this story: Bill Allison in Washington DC at ballison14@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
VW CEO shifts strategy from empire building to efficiency
Volkswagen has abandoned its decades-old obsession with empire building and no-expense-spared engineering to free up resources for the development and mass production of electric cars, its CEO Herbert Diess told Reuters. A global clampdown on toxic exhaust fumes has triggered a new wave of consolidation in the auto industry as carmakers look for ways to slash development costs for low-emission and self-driving technologies. While rivals such as FiatChrysler and Renault explore a $35 billion deal to bulk up, Volkswagen is taking the opposite approach: slimming down.
- Market Realist
Tesla Gets Support from Rivals: Are Bears Listening?
Volkswagen CEO Herbert Diess has shared optimistic views on Tesla (TSLA), and Volvo has heaped praise on Tesla’s energy efficiency.
- Bloomberg
Merkel Offers to Help Germany’s Carmakers With ‘Herculean Task’
(Bloomberg) -- Chancellor Angela Merkel wants to help offset the higher costs of cleaner vehicles by putting a price on carbon-dioxide emissions, potentially offering a lift to Germany’s vital auto industry as it grapples with the high-risk transition away from the combustion engine.Germany and its automakers are facing a “Herculean task,” Merkel said Thursday at a ceremony opening the Frankfurt car show to the public. While short on specifics, the German leader backed efforts to encourage consumers to buy more environmentally friendly products such as battery-powered cars fueled by renewable power.“We want to direct the behavior of people in a certain direction,” she said. “The pricing of CO2 is the right way to make clear that all innovations should follow the goal of emitting less CO2. If we do this in a long-term and accountable way, there will be the incentives to move innovation in the right direction.”Volkswagen AG, Daimler AG and BMW AG are facing tough times. Pollution concerns -- intensified by VW’s 2015 diesel-cheating scandal -- have tarnished the industry’s image and triggered massive investment in electric vehicles. Those costs had already started squeezing earnings when almost a decade of uninterrupted industry growth led by China came to a halt. The consequence is Germany’s car production slumping to the lowest level since at least 2010.The looming end of the combustion-engine era and the dramatically-increasing importance of digital technologies in cars, pose an unprecedented threat to the industry’s traditional business model. A slew of profit warnings from manufacturers like Mercedes-Benz maker Daimler to parts makers like Continental AG provided fresh evidence that times have become rough.Merkel spoke after John Krafcik, the chief executive officer of Waymo. The Alphabet Inc. unit is widely regarded as the global leader in self-driving technology and represents a risk to the country’s car brands, which are largely focused on motoring thrills. Krafcik offered a cooperative tone, even though German manufacturers are wary of allowing the Google parent access to sensitive customer data.“It’s not about competing with car companies. It’s to enable, not disrupt companies in the automotive space,” said Krafcik. “Developing self-driving technology takes a lot of time. There are no shortcuts. We can’t do this on our own.”Germany is teetering on the brink of recession, and the auto industry is pivotal to the economy’s health. Carmakers such as Volkswagen, Daimler and BMW as well as parts suppliers like Robert Bosch GmbH and Continental employ about 830,000 people in the country and support everything from machine makers to advertising agencies and cleaning services.Germany’s auto industry is trying to respond. Electric cars, such as the flashy Porsche Taycan and more affordable VW ID.3, dominated media presentations this week at the Frankfurt trade fair and more models are in the pipeline.Daimler CEO Ola Kallenius backed Merkel’s CO2 pricing plan, saying at panel discussion in Frankfurt that there are costs related to fossil-fuels and it would make sense for a global plan to help fight climate change.For the auto industry, any signs of support would be welcome. Demand for electric cars has been sluggish, and Merkel had to surrender her goal to have 1 million electric cars on German roads by 2020. Sales of hybrid and electric cars in the country last year totaled a mere 55,000 vehicles, or 1.6% of the market.In addition to boosting efficient technologies, the country needs to accelerate the roll-out of charging stations to ease consumer concerns, she said.“If one believes that climate protection is a task for mankind, and I believe it is, then we must pay this price because otherwise we will have to pay a totally different price,” Merkel said.(Adds comment from Daimler CEO in 10th paragraph)To contact the reporters on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net;Arne Delfs in Berlin at adelfs@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Raymond ColittFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
The Electric Cars Are Here. Now How About Selling Them
(Bloomberg) -- It only took a decade for traditional automakers to take electric cars seriously and offer more than a smattering of test-the-water models.Now comes the hard part: Getting consumers to buy them.At Frankfurt’s 2019 car show, Volkswagen AG Chief Executive Officer Herbert Diess laid it on thick, calling on governments to give up coal-fired power as he unveiled the electric ID.3 car-for-the-masses. At the Mercedes-Benz stand, where the Daimler AG brand was showing the prototype of an electric S-Class sibling, real beech trees framed massive screens displaying schools of digital fish.The message to environmentally conscious consumers: we’re with you. But a marketing blitz alone won’t wash away the deep uncertainties facing electric cars -- obstacles little changed since carmakers’ initial forays with models like the Nissan Leaf and BMW AG i3. Customers don’t like paying up for new technology they’re unsure about, and they’re worried they won’t reliably get to where they want to go.“The next big thing is not going to be about the cars, because they will come,” Carlos Tavares, president of the European Automobile Manufacturers Association and CEO of Groupe PSA, said Wednesday. “The next big thing is about affordable mobility. The next big thing is about how we make this work for the biggest number of people.”So far, electric cars have only proliferated in countries with significant sweeteners. Once they go, sales of battery models crater. Demand in China, the world’s biggest electric car market, fell 16% in August -- its second straight decline -- after the government scaled back subsidies. Carmakers can reduce prices, but then only cut into profitability that in most cases has been nonexistent.Consumers are similarly sensitive elsewhere. Demand in Denmark collapsed when the government phased out tax breaks in 2016.“We’ve been talking about EVs for years, but this year the real production cars showed up,” Max Warburton, an analyst at Sanford C. Bernstein, wrote in a note. “Should we be celebrating these cars, given the poor margins that most will have?”Across Europe, sales of new plug-in hybrids and fully-electric cars last year made up 2% of total registrations. That’s a tiny market to tussle over for the likes of VW’s ID.3, with a price point below 30,000 euros ($33,009), Tesla Inc.’s Model 3 and Mercedes’s gleaming lineup of plug-ins. Yet carmakers have little choice but to boost their offering to keep pace with regulation, or face fines.Consumer demand “can’t be mandated,” Daimler CEO Ola Kallenius said at the show. Mercedes-Benz is adding at least 10 purely battery-powered cars through 2022 at a cost of more than 10 billion euros, starting with last year’s EQC SUV, so the carmaker’s lineup can to meet stricter emission limits.A lot of factors are moving in the right direction. The ID.3’s price point and basic range of 330 kilometers (205 miles) sets the car apart from previous efforts that needed meticulous pre-planning for longer trips. At the top end, there’s now the $185,000 Porsche Taycan Turbo S, and a mid-range that’s rapidly filling out from SUVs like the Jaguar I-Pace and Audi e-tron.Patchy charging infrastructure is improving too. Ionity, a consortium of Daimler, VW, Ford Motor Co., BMW and now Hyundai Motor Co., is on track to finish building a network of 400 European fast-charging stations by next year to make long-distance travel easier.Lean YearsFor carmakers, this will mean some lean years -- at least to 2025 when battery prices are expected to come down -- during which lucrative conventional SUVs must subsidize poor returns from their electric cousins. VW will need “patience” until the ID.3 brings significant profit “joy,” Chairman Hans Dieter Poetsch said.To bridge the gap, the industry is lobbying hard for governments to step up incentives to get to the oft-cited tipping point where driving without a combustion engine becomes normal. In Germany, home to VW, Mercedes and BMW as well as world-leading suppliers like Continental AG, the government sits down next week to discuss broad climate measures. Carmakers are hoping for a bigger slice of subsidies than they got so far.The ACEA on Wednesday called on national governments to boost charging points in Europe to 2.8 million by 2030, a 20-fold increase from 2018.“We need strong support, because if we don’t do it,” simply offering electric cars won’t be enough for sales to take off, PSA’s Tavares said.\--With assistance from Richard Weiss.To contact the reporters on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net;Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Market Realist
Should Tesla See Volkswagen’s ID.3 as a Threat?
Volkswagen unveiled its all-electric ID.3 at the Frankfurt auto show. The model’s name is conspicuously similar to the Tesla Model 3.
- Bloomberg
VW Warns Trade War Gloom Is Getting ‘Scary’ as Car Sales Slow
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Volkswagen AG and other carmakers warned that trade tensions risk dragging the global economy into a recession as the fallout starts to hit consumers.The gloom of the U.S. and China’s tit-for-tat tariffs cast a shadow over the Frankfurt Auto Show this week, where carmakers were seeking to whip up interest in critical new electric models. The geopolitical volatility adds another layer of uncertainty to an industry in the midst of a radical overhaul as the end of combustion-engine era looms.“We come now into a situation where this trade war is really influencing the mood of the customers, and it has the chance to really disrupt the world economy,” Volkswagen Chief Executive Officer Herbert Diess said in an interview with Bloomberg TV. “China is basically a healthy market, but because of the trade war, the car market is basically in a recession. So that’s a new situation. That’s scary for us.”Concerns about global trade have reached nearly 10 times the peaks seen in previous decades and could shave about 0.75 percentage points off world economic growth this year, according to data compiled by the International Monetary Fund. The auto industry is particularly exposed because of its global network of assembly plants and parts suppliers. Daimler AG, for instance, makes many of its Mercedes-Benz’s SUVs in Alabama and exports them to China and other markets.“What will happen in 2020 will very much depend on what happens with the U.S. and China in the coming weeks,” BMW AG Chief Financial Officer Nicolas Peter said in an interview with Bloomberg TV at the Frankfurt show, Germany’s premier auto exhibition. The German manufacturer assembles most of its sport utility vehicles in South Carolina.After months of talks, the tensions between the U.S. and China remain high. Ted McKinney, the top trade official in U.S. President Donald Trump’s Agriculture Department, called Chinese President Xi Jinping a “communist zealot” in the mold of Mao Zedong. After a summer of bombast and tariff escalation, the two sides have agreed to hold face-to-face working-level staff talks in the coming weeks and a ministerial meeting in Washington in early October.“Everyone is affected by the industry downturn, everyone is suffering,” Continental AG CEO Elmar Degenhart told reporters Tuesday in Frankfurt. Europe’s second-largest auto supplier plans to finalize a review of its sprawling global manufacturing network by the end of this year and doesn’t rule out factory closures or layoffs as part sweeping restructuring plans.Outside the car show, other German industry leaders voiced their concerns about trade risks. Siemens AG Chief Executive Officer Joe Kaeser urged the European Union to assert its voice in the trade conflict between the U.S. and China, saying the specter of a “decoupling” of political and economic systems would break with decades of integration and ultimately risk a global slowdown.“Europe would be well advised to avoid this bilateral decoupling, but it can only achieve this when it is heard as a third force in the world, and that’s not the case at the moment,” Kaeser told journalists in Berlin. There’s a sense that the world is reorganizing into new economic spheres, making it harder for export-oriented companies to do business and creating the risk of “having to decide between friend and foe,” said the executive, who recently returned from a trip to China with German Chancellor Angela Merkel.‘Good Sense’ BrexitOn top of the U.S.-China spat and Trump’s recurring threat to impose levies on European car imports, the industry is bracing for the potential of the U.K. crashing out of the EU without a deal in a few weeks. BMW, which owns the British-based Mini and Rolls-Royce car brands, has set up a 300 million-euro ($330 million) fund to deal with a possible hard Brexit and would reduce output at its plant in Oxford, England, by eliminating a work shift if that happens, CFO Peter said.“We’d have to increase prices, and we have to curtail production to react to such a development,” Peter said on BMW’s contingency preparations for a crash British exit. “The plans are in the drawer.”In a Bloomberg TV interview, PSA Group CEO Carlos Tavares called the prospect “not acceptable” on ethical grounds and appealed to European and British leaders to show “good sense” and avoid a no-deal Brexit.Ralf Speth, the CEO of Jaguar Land Rover, laid out the complexity of an abrupt disruption to trade flows, saying the British manufacturer needs as many 25 million parts a day to be delivered on time and requires six to eight weeks to decide on ordering components. With Prime Minister Boris Johnson insisting that the U.K. will leave the EU on Oct. 31 “do or die,” the auto industry is facing its Brexit crunch time now.“Free and fair trade is best for society. Currently we’re falling back on that,” said Speth, who unveiled a resurrected version of the Land Rover Defender offroader in Frankfurt. “It’s so critical to prepare in the very best way for alternatives. But in the end, no one really knows.For the auto industry, the trade squeeze clouds efforts to show off slick new models like the Porsche Taycan and VW ID.3 as German brands ramp up electric offerings to meet increasingly stringent environmental regulations. Demand disruptions threaten to squeeze profits needed to fund the high-risk rollout.“We hope there won’t be any recession in the mid term or long term, because it would be a self-made recession,” Diess said.(Adds comments from Jaguar Land Rover CEO in third-to-last paragraph.)\--With assistance from Matthew Miller, Benedikt Kammel and Elisabeth Behrmann.To contact the reporters on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net;Oliver Sachgau in Frankfurt at osachgau@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Chad ThomasFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
VW Unveils New Logo, Affordable E-Cars in Show of New Era
(Bloomberg) -- Volkswagen AG is unwrapping not just new models at the Frankfurt auto show, but a tweaked logo as the world’s biggest carmaker ushers in the electric era.Little-changed since World War II, the new VW emblem was uncovered atop its headquarters in Wolfsburg on Monday. And in Frankfurt, the manufacturer showed the VW brand’s battery-powered ID.3, the first model in an unprecedented $33 billion push to make electric vehicles for the masses.The twin steps -- both heavy with symbolism -- reflect the high stakes involved in Volkswagen’s ambitions to become the world’s electric-car leader just four years after the diesel-cheating scandal plunged it into the worst crisis in its history. The carmaker aims for the ID.3 hatchback, priced under 30,000 euros ($33,200) to become a trendsetter and take on similar status as its iconic Beetle.“This evening is a decisive moment for us,” Chief Executive Officer Herbert Diess said from the podium. The ID.3 is meant to “take the electric car from being a niche product to the mainstream, making it accessible for everyone.”VW is pulling out all the stops as it seeks to reshape its image. In Frankfurt, the gathered crowd was treated to vegan sliders with green buns and herbal concoctions garnished with thyme.Diess called for the end of coal-generated electricity, among other planet-saving measures. “How can we save the world for our children?” read a query emblazoned on an entryway wall.If things work out as planned, the ID.3’s technical underpinnings, dubbed MEB, will emerge as a new industrial standard for battery-powered cars, giving Volkswagen economies of scale that rivals would struggle to match. U.S. peer Ford Motor Co. has already agreed to use the technology for a high-volume car in Europe and is considering adding a second model. Diess sees nearly 50% of the group’s sales in Europe and China being electric in 10 years.But if consumers remain on the fence about the cars because of range, charging and cost concerns, VW could find itself stuck with sunk costs, redundant factories and excess workers.“VW’s bold electric vehicle plans scare this analyst given their huge near-term costs and uncertain demand,” Max Warburton, a London-based analyst with Sanford C. Bernstein, said in a note. Former patriarch Ferdinand Piech, who died two weeks ago, “would have argued that expensive investments in new technology tend to pay off in the very long run.”The time for VW’s effort to reinvent itself is hardly favorable. A decade of almost uninterrupted growth for the industry -- fueled mainly by China -- has come to a grinding halt. Global demand for new vehicles contracted last year, and the trade war between the U.S. and China and uncertainty over Brexit is serving up yet more challenges.“We really now come into situation where the trade situation starts to influence the mood of customers, and that could disrupt the market,” Diess said in a Bloomberg Television interview. “We hope there won’t be a recession.”VW is tapping the brakes already, even as it still generates vast amounts of cash and profits. The manufacturer has scaled back production plans by some 450,000 cars for this year and has pledged to lower output further if necessary. VW’s cut roughly equals the annual output of one its 122 factories worldwide and exceeds Tesla Inc.’s delivery target for 2019 of between 360,000 and 400,000 cars.Separately, the German giant has started to make gradual progress toward untangling its unwieldy corporate structure. It regrouped its car brands to focus on luxury cars and mass-market vehicles, and after some back-and-forth eventually completed a public listing of trucks unit Traton SE earlier this year.In May, VW announced plans to review strategic options -- including a possible sale -- for the industrial machinery units Renk AG and MAN Energy Solutions. Analysts have urged VW to consider deeper changes including an initial public offering of the high-margin Porsche brand to unlock value. The sports-car unit, which is VW group’s most profitable division, will show off its electric Taycan model at the Frankfurt show after unveiling it last week.Despite these efforts, investors are doubting VW and other carmakers’ ability to master the technological shift toward electric and self-driving cars. Diess has stressed the importance of reviving VW’s weak market value to help bolster the company’s case for acquisitions and partnerships.(Updates with price in third paragraph)\--With assistance from Matthew Miller.To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Craig TrudellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Yahoo Finance UK
Volkswagen rebrands and wheels out its new mass-market car
VW intends the ID.3 to have the same impact as the Beetle and the Golf.
- TechCrunch
Volkswagen reveals its mass-market ID.3, an electric car with up to 341 miles of range
Volkswagen introduced Monday the ID.3, the first model in its new all-electric ID brand and the beginning of the automaker's ambitious plan to sell 1 million EVs annually by 2025. The ID.3 debut, which is ahead of the IAA International Motor Show in Frankfurt, is an important milestone for Volkswagen. Now, four years later, VW is starting to show more than just concept vehicles for its newly imagined electric, connected and carbon-neutral brand.
- Bloomberg
BMW & Co Are Losing Their Allure, and That’s Got Germany Worried
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Germany is at a crossroads, and nowhere will that be more evident than at the Frankfurt auto show this week.Despite sleek new electric models like the Porsche Taycan, the traditional showcase of German automotive excellence risks becoming a platform for protest rather than preening, drawing attention to a generation of young consumers more likely to demonstrate against the car’s role in global warming than shop for a new VW, BMW or Mercedes-Benz.Autos have made Germany into a global manufacturing powerhouse, but pollution concerns -- intensified by Volkswagen AG’s 2015 diesel-cheating scandal -- have sullied the reputation of a product that once embodied individual freedom. More recently, trade woes and slowing economies have hit demand. The consequence is Germany’s car production slumping to the lowest level since at least 2010.“Investors have been fearful about the industry’s prospects for a number of years, and the list of things to worry about doesn’t seem to be getting shorter,” said Max Warburton, a London-based analyst with Sanford C. Bernstein. “There is a general sense that things are about to get worse.”The end of the combustion-engine era and car buyers more interested in data connectivity than horsepower threaten Germany’s spot at the top of the automotive pecking order. Signs of trouble abound. In addition to numerous profit warnings this year, Mercedes maker Daimler AG delayed a plan to expand capacity at a Hungarian factory, parts giant Continental AG has started talks to cut jobs, and automotive supplier Eisenmann filed for insolvency.The car’s fragile standing was evident in the reaction to a deadly accident in Berlin on Friday evening when a Porsche SUV crashed into a group of pedestrians. Stephan von Dassel, the mayor of the district where the incident took place, said on Twitter that “such tank-like vehicles” should be banned in the city.Germany is teetering on the brink of recession, and the auto industry is pivotal to the economy’s health. Carmakers such as Volkswagen, Daimler and BMW AG as well as parts suppliers like Robert Bosch GmbH and Continental employ about 830,000 people in the country and support everything from machine makers to advertising agencies and cleaning services. With factories from Portugal to Poland, the importance of the sector radiates across Europe as well.With emissions regulations set to tighten starting next year, concerns are mounting that companies across the country’s industrial landscape are ill-equipped to deal with the technology transition resulting from climate change and increasing levels of digitalization. IG Metall organized a demonstration in June, with more than 50,000 people rallying in Berlin, to draw attention to the risk of widespread layoffs from what Germany’s biggest industrial union calls “the transformation.”“Far too many companies stick their heads in the sand and rest on their laurels,” IG Metall Chairman Joerg Hofmann said. “If companies continue to act so defensively, they’re playing roulette with the futures of their workers.”The concern is that the future of Germany’s car towns could look something like Ruesselsheim. The home of the Opel brand, which once rivaled VW as the German leader, has faded along with the carmaker’s performance. After years of losses, it was sold in 2017 by General Motors Co. to France’s PSA Group, which is slashing the Opel’s 20,000-strong German workforce by nearly a fifth.“Everybody in Ruesselsheim is worried,” said Servet Ibrahimoglu, owner of a kebab restaurant down the street from Opel’s factory, adding that his business has dropped by a third. “Before at lunchtime, this place was full. Now there’s no one.”The auto industry’s efforts to adapt to the risks will be on display in Frankfurt, and the stakes couldn’t be higher for models like the VW ID.3. The battery-powered hatchback is the auto giant’s first effort in an aggressive push into electric cars, which will make its debut at the Germany’s premier auto exhibition.Under bright lights and blaring music, the show is a throwback to the auto industry’s glory days, but it’s fading as public interest in old-school car show wanes. Toyota, Volvo and Ferrari are among the 30 brands skipping the show. For those still there, the displays will predominantly feature traditional gas guzzlers and other cash cows. Land Rover will unveil a resurrected version of the Defender, the British brand’s iconic offroader.“Instead of presenting new mobility concepts for the future, we’ll see lots of SUVs on stands that have become few and far between,” said Ferdinand Dudenhoeffer, director of the University of Duisburg-Essen’s Center for Automotive Research. “The recession in the global auto business is forcing savings cuts for car manufacturers and suppliers, along with a rapid loss of attractiveness of the classic ‘analog’ car shows.”Make or BreakWhere German brands once tried to outdo one another with outlandish displays like indoor tracks and multistory exhibition spaces, the main drama may take place outside Frankfurt’s sprawling fairgrounds. Greenpeace and Germany’s BUND have called for a mass march on the site on Saturday, joined by groups of cyclists setting off from around Frankfurt to underscore their call for the end of the combustion engine. Organizers are expecting at least 10,000 people. “We’re in the middle of a climate crisis,” said Marion Thiemann, transport-policy expert at Greenpeace. “The biggest problem is the automobile industry.”Despite doubts from environmentalists, automakers have gotten the message that they’re facing a make-or-break moment. The industry is spending billions of euros to develop cleaner vehicles and counter the emergence of ride-sharing services like Uber Technologies Inc., which has a market value equivalent to Daimler, the inventor of the automobile.“I’m absolutely convinced that carmakers will adapt to the situation,” BMW’s labor head Manfred Schoch said during a testy panel discussion with activists in Berlin last week. “Those that don’t will go out of business.”(Adds comment from activist in third-to-last paragraph)\--With assistance from Kristie Pladson, Andrew Blackman and William Wilkes.To contact the reporters on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net;Carolynn Look in Frankfurt at clook4@bloomberg.net;Elisabeth Behrmann in Munich at ebehrmann1@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christoph Rauwald, Chris ReiterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Yahoo Finance
2019 BMW X5 xDrive50i - a beastly SUV that’s also a tech marvel
For the 2019 model year, the BMW X5 is all new, and that is a very good thing. '2 Dudes in a Car' takes the new X5 for a spin.
- Reuters
U.S. launches antitrust probe into California automaker agreement
The U.S. Justice Department is investigating whether the decision of four automakers in July to reach a voluntary agreement with California to adopt state emissions standards violated antitrust law, people briefed on the matter said on Friday. The antitrust division's chief, Makan Delrahim, sent Aug. 28 letters to the four automakers saying the government was concerned the agreement "may violate federal antitrust laws" but adding it had "reached no conclusions," according to documents seen by Reuters. The disclosure comes as the Trump administration has ramped up its opposition to automakers seeking to sidestep it on rolling back Obama era fuel-efficiency rules.
- Bloomberg
Merkel Says Germany Open to Chinese Business as Stance Hardens
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. German Chancellor Angela Merkel told Chinese Premier Li Keqiang that Germany remained open to business even as her government raises barriers to investments in sensitive areas.Germany’s tightened investment rules are meant to vet outside investors in strategic sectors, Merkel told reporters at a joint press conference with her Chinese counterpart in Beijing on Friday at the start of a two-day visit to China. Li pledged that China would further open its economy.“Not every assessment means that every investment is blocked, rather in strategic or sensitive areas that have to be looked after -- still, Chinese investors are welcome,” Merkel said. She also urged an end to the China-U.S. trade war to return calm to global markets.The chancellor faces a delicate set of policy objectives during the visit, in which she’s being accompanied by a delegation of some 25 business leaders, including executives from Volkswagen AG, Deutsche Bank AG and Siemens AG. The German leader is seeking to maintain a tougher stance with Beijing while urging a resolution of the trade war and continuing to press for reciprocal access to China’s lucrative market.Germany is toughening its policy toward China on matters such as investment and intellectual property, joining governments from Japan to Canada and Australia taking a harder line on China as President Donald Trump steps up his trade war. But it’s an especially high-risk strategy for Berlin at a time when its export-dependent economy is flirting with recession.The German leader said her goal is for trade relations with China to be an example for multilateral trade amid tensions in the global order. She cited the “urgency” of clenching an investment accord by the second half of 2020. That’s when Germany plans to host a an EU-Chinese leaders’ summit.Indicative of Merkel’s balancing act is her approach to the unrest in Hong Kong. While her administration urged Beijing to engage in dialog and respect the rule of law, Merkel has declined an invitation to meet with protesters.Hong Kong citizens’ “rights and freedoms must of course be guaranteed,” Merkel said alongside Li on Friday.The visit got off to a bumpy start when Chinese authorities initially blocked German media based in Beijing from attending the Merkel-Li press conference, a government spokeswoman in Berlin confirmed. Only after the German government intervened were four local journalists allowed in, she said. Adding to the awkwardness was the protocol during the military ceremony in front of the Great Hall of the People. While Merkel sat during the playing of the Chinese anthem, Li rose from his seat.After a series of shivering fits during the summer, Merkel has resorted to sitting during military parades. All other leaders she has received since then, including U.K. Prime Minister Boris Johnson, had also remained seated.Chinese state media advocated more open markets between Germany and China, stressing opportunities for cooperation ahead of Merkel’s visit, including areas such as climate change and trade.“There is an urgent need for Germany and China to safeguard an open global economy and ensure that normal international trade should not be disrupted by protectionist tariffs,” the official Xinhua News Agency said in a commentary.Merkel later met with Chinese President Xi Jinping, who hosted a dinner for the German leader. Xi told Merkel that China would continue to open its economy in sectors including manufacturing, services and finance, according to Xinhua.(Adds German spokesman in ninth paragraph.)\--With assistance from Jihye Lee.To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net;Dandan Li in Beijing at dli395@bloomberg.net;Arne Delfs in Berlin at adelfs@bloomberg.netTo contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Raymond ColittFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
