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European and APAC equity markets closed mixed, while US markets
closed lower on the day. European benchmark government bonds were
mixed, while US government bonds and the US dollar ended the day
higher on the weakness in US equities. iTraxx and CDX indices ended
the day modestly wider across IG/high yield and oil also closed
lower. The US initial claims for unemployment insurance came in
worse than expected, although it was relatively unchanged from last
week.
Americas
US equity markets opened modestly higher, but shifted course
before noon and closed lower on the day; Nasdaq -2.0%, S&P 500
-1.8%, DJIA -1.5%, and Russell 2000 -1.2%.
10yr US govt bonds closed -3bps/0.68% yield and 30yr bonds
closed -4bps/1.42% yield. 10yr bonds reached the lowest point
(0.72% yield) of the day at approximately 11:30am EST and rallied
4bps from that time through 3:30pm EST.
CDX-NAIG closed +3bps/69bps and CDX-NAHY +6bps/377bps.
The chart below compares today's S&P 500 and CDX-NAHY
intraday changes versus yesterday's close (note the change in
CDX-NAHY axis is in reverse order). The data shows CDX-NAHY was
tighter for most of the day until the S&P 500 fell below -0.5%,
which led to almost 10bps of widening between 2:15-3:15pm EST.
DXY US dollar index closed near the highs of the day at
+0.1%/93.35 on the late-day flight to quality.
Gold closed +0.5%/$1,964 per ounce.
Crude oil closed -2.0%/$37.30 per barrel.
US seasonally adjusted initial claims for unemployment
insurance, at 884,000 in the week ended 5 September, remained at
historically high levels, although well below the all-time high of
6,867,000 in the week ended 28 March. (IHS Markit Economist Akshat
Goel)
The seasonally adjusted number of continuing claims (in regular
state programs), which lags initial claims by a week, rose by
93,000 to 13,385,000 in the week ended 29 August. The insured
unemployment rate in the week ended 29 August ticked up 0.1
percentage point to 9.2%.
There were 838,916 unadjusted initial claims for Pandemic
Unemployment Assistance (PUA) in the week ended 5 September. In the
week ended 22 August, continuing claims for PUA rose by 1,021,294
to 14,591,621.
In the week ended 22 August, 1,422,483 individuals were
receiving Pandemic Emergency Unemployment Compensation (PEUC)
benefits.
The Department of Labor provides the total number of people
claiming benefits under all its programs with a two-week lag. In
the week ended 22 August, the unadjusted total rose by 380,379 to
29,605,064. Even as the number of continuing claims in regular
state programs continues to decline, the number of people claiming
benefits under all programs remains stubbornly high and has
averaged 30.1 million since peaking at 32.4 million in
mid-June.
The US total producer price index (PPI) for final demand rose
0.3% in August, but remained 0.2% below a year earlier.
Pandemic-related price swings, mostly drops, are washing out of the
supply chain. (IHS Markit Economist Michael Montgomery)
Total goods prices rose 0.1% with food down 0.4% and fuels off
0.1%. Core goods posted a moderate 0.3% firming, even though most
prices were softer than this.
Food prices in August were 0.2% above a year earlier (y/y). As
food prices go, that is pretty close to normalized.
Energy prices were down 12.4% y/y and core goods were up 0.8%
y/y. The largest drops in energy were because of crude oil's
plunge, with gasoline down by 29.7% y/y; both electricity prices as
well as natural gas were comparatively stable.
Total services prices posted a 0.5% increase for the month and
rose 0.4% y/y, with trade margins up 1.2%, transportation and
warehousing up 0.2%, and "other" services up 0.3%. Transportation
and warehousing services were off 5.2% y/y thanks to drag from
plunging airfares caused by massively reduced traffic and cheaper
air fuel.
Producer prices remain nearly unchanged over the past year with
the total off 0.2% y/y; excluding food and energy the result is up
0.6% and also excluding trade margins it is up 0.3%. Those are
milder y/y deviations than earlier in the year thanks to some
recovery in recent months, but save for fuel and airfares more like
"soggy" than "falling."
The Office of Environmental Health Hazard Assessment (OEHHA) of
the California Environmental Protection Agency has released a
health assessment raising new questions about the neurological
impact of children's exposure to food dyes. Conducted at the
request of the California legislature, the 310-page report took an
in-depth look at the latest science on the health effects related
to children's exposure to synthetic food dyes, finding that
exposure "may cause or exacerbate neurobehavioral problems in some
children." The assessment also included a study of children's
exposure to synthetic food dyes, which found that "none of the
child intake estimates based on a daily serving of sampled foods
exceeded US FDA Acceptable Daily Intakes (ADIs) for food dyes."
However, the study cautioned that FDA had based its current ADIs on
studies that were "many decades old" and could not detect a number
of negative neurobehavioral outcomes in children highlighted in
recent literature and data. Based on new information from
high-throughput assays in cells, which OEHHA says, provides insight
into the potential for synthetic food dyes to elicit
neurobehavioral effects, the study cautioned that FDA's current
ADIs for synthetic food dyes - the only regulatory threshold used
in connection to food dyes - may be too high and are not
"adequately protective of children." While the report stressed the
need for more research to identify safe exposure levels for
synthetic dyes in children, it also cautioned research is a long
term endeavor and that action is needed now to curb children's
exposure to synthetic dyes. "Research is generally a long-term
proposition," authors said in the report. "At a minimum, in the
short term, the neurobehavioral effects of synthetic food dyes in
children should be acknowledged and steps taken to reduce exposure
to these dyes in children." OEHHA's new assessment is focused on
the seven synthetic food dyes most commonly consumed in the US: (1)
FD&C Blue No. 1; (2) FD&C Blue No. 2; (3) FD&C Green
No. 3; (4) FD&C Red No. 3; (5) FD&C Red No. 40; (6)
FD&C Yellow No. 5; and (7) FD&C Yellow No. 6. (IHS Markit
Food and Agricultural Policy's Margarita Raycheva)
GM's electric vehicles (EVs) are to feature the automotive
industry's first wireless battery management system, according to a
company statement. The wireless battery management system has been
developed by Analog Devices Inc. GM states that the system, called
wBMS (wireless battery management system), has several advantages
as a solution. GM states that the solution will enable the
automaker to power different types of vehicles from a common set of
battery components. The wBMS reduces wires within the battery pack
by 90%, GM says, contributing to lighter vehicles overall and
providing extra space for more batteries. GM says the solution
enables cleaner designs, simpler and more-streamlined battery
structuring, and more-robust manufacturing processes. The company
states that the reason for this is that the wBMS eliminates the
need to create specific communications systems or to design complex
wiring schemes for each new vehicle. GM states that the wBMS will
help GM to balance the chemistry within individual battery cell
groups to enable optimal performance. The automaker also states
that the system will enable it to conduct real-time battery-pack
health checks as well as to refocus the network of modules and
sensors as needed. (IHS Markit AutoIntelligence's Stephanie
Brinley)
Ride-hailing firm Lyft's trips rose 7.3% in August compared
with July, as its operations recovered more quickly in Canada than
in the United States. However, the COVID-19 virus pandemic is still
battering demand for ride-hailing services and led to a drop in
rides of 53% year on year (y/y) in August. Lyft's rides were down
by as much as 75% in mid-April and gradually increased in the final
weeks of the month, and in July, they were up 78% on April. The
company's revenue declined to USD339.3 million in the second
quarter of 2020, down 61% y/y. Lyft has laid off around 982
employees and furloughed hundreds more because of the COVID-19
virus pandemic. Recently, Lyft announced that it has partnered with
car-rental company SIXT to expand its in-app rental business. (IHS
Markit Automotive Mobility's Surabhi Rajpal)
At the request of the left-wing opposition, the Colombian
Congress on 7 September agreed to remove a proviso (known as
Article 210) from a recently passed royalties reform bill that
would have granted tax benefits to future hydraulic fracturing
(fracking) operations. Supporters of the change argued that
approving Article 210 would have amounted to the legalization of
fracking, which is still to be authorized by Colombia's Ministry of
Mines and Energy. This constituted a setback for the government
after the Lower House had passed the bill containing Article 210.
However, on 3 September, the Senate rejected it by 44 votes against
39, forcing a conciliation of the bill that eventually resulted in
the removal of Article 210. This compounds the situation for the
sector, given that a legal case is being heard by Colombia's top
administrative court known as the Council of State, which is
expected to rule soon on several pilot fracking projects authorized
by the government to assess environmental sustainability. The
government said that the evaluation of the projects will settle the
issue, but the Council of State has accepted a legal challenge
against the mentioned pilots. Colombia's oil reserves are declining
rapidly and the government of President Iván Duque is prioritizing
fracking to replenish them; government sources claim that the
sector could attract as much as USD5 billion in investment over the
next five years. (IHS Markit Country Risk's Carlos Caicedo)
Generics firm Mylan (US/Netherlands) has agreed to acquire the
European thrombosis business of South African company Aspen for a
sum of EUR642 million (USD756 million). The transaction will be
used to ease Aspen's existing debt levels, although Mylan has said
that it will only make an initial upfront payment of EUR263.2
million upon completion of the deal in late 2020, while the
remainder will be deferred until mid-2021. The portfolio of
products that Mylan is acquiring from Aspen in the European market
includes well-established and lucrative injectable anti-coagulants
such as the anti-thrombotic treatment Arixtra (fondaparinux
sodium), the anti-thrombotic low-molecular-weight heparin
Fraxiparine (calcium nadroparin), Mono-Embolex (certoparin sodium),
and Orgaran (danaparoid), which had estimated combined sales
amounting to EUR231 million in the 12 months before mid-2020. The
acquisition of a revenue-strong thrombosis product line will help
strategically reposition Mylan's European business by catapulting
the firm into becoming the second-largest manufacturer of
thrombosis products across the region. The Mylan-Aspen deal will
have no effect on Mylan's planned tie-up with Pfizer. (IHS Markit
Life Sciences' Eóin Ryan)
Europe/Middle East/Africa
Most European equity markets closed lower except for Italy
+0.3%; France -0.4%, Spain -0.3%, Germany -0.2%, and UK -0.2%.
10yr European govt bonds closed mixed; Italy/UK -1bp, Spain
+1bp, and France/Germany +3bps.
iTraxx-Europe closed +1bp/54bps and iTraxx-Xover
+2bps/320bps.
Brent crude closed -1.8%/$40.06 per barrel.
The 27 countries in the European Union plus the U.K., Norway,
Iceland and Liechtenstein recorded 27,233 new cases on Wednesday,
compared with 26,015 for the U.S. That follows several weeks of
resurgent infections in Spain, France and other countries across
the continent. The comparison is based on data from the World
Health Organization for the U.S. and Bloomberg calculations using
numbers from the European Centre for Disease Prevention and
Control. (Bloomberg)
The tone of the European Central Bank's (ECB)'s statement
following its latest policy meeting echoed those of prior months,
with an explicit easing bias retained along with a reiteration that
the ECB continues "to stand ready to adjust all of its instruments,
as appropriate". (IHS Markit Economist Ken Wattret)
The statement contained various tweaks to the assessment of
growth and inflation prospects to reflect recent developments,
along with one standout change: that is, the inclusion of two
explicit references to the strength of the euro exchange rate.
First, in the current environment of elevated uncertainty, the
Governing Council "will carefully assess incoming information,
including developments in the exchange rate", with regards to its
implications for the medium-term inflation outlook.
Second, in the short term, price pressures will remain subdued
owing to weak demand, lower wage pressures, and "the appreciation
of the euro exchange rate".
Given the strength of the euro since July, the ECB's references
were not a surprise. Indeed, in addition to euro strength against
the US dollar, the ECB's own, broad nominal measure of the
trade-weighted euro recently hit a record high.
The fact that the references were included in the ECB's
statement is significant, as this signals that the concern over
euro strength is widespread across the members of the ECB's
Governing Council. ECB President Christine Lagarde also
acknowledged in the question and answer (Q&A) session that the
euro was the subject of "extensive" discussion (accompanied by a
reiteration that the ECB does not target a specific level).
The staff projections for GDP and HICP inflation have also been
adjusted (see table below). The GDP projection for 2020 was revised
higher but remains indicative of a huge contraction (-8.0%), while
projections for 2021 and 2022 were changed only marginally.
The ECB's HICP inflation projections were also adjusted.
Headline inflation was left unchanged in 2020 and 2022, and was
revised up by 0.2 percentage point in 2021, largely owing to energy
price swings (see table below).
Surprisingly, the 2021 and 2022 projections for the core rate
(excluding food and energy prices) were also revised upwards, by
0.2 percentage point in both years, to 0.9% and 1.1%,
respectively.
These upward revisions do not look very credible in our view
given recent lower-than-expected core inflation rates, the
softening of growth indicators, and the likelihood of large amounts
of slack persisting in the economy for several years.
Still, the bottom line remains that headline and core inflation
rates are projected by the ECB to remain well below 2% throughout
the forecast horizon, indicative of continued loose policy and a
high likelihood of further easing.
The ECB retains an explicit easing bias and we continue to
expect additional stimulus to be announced in December, in tandem
with the next set of macroeconomic projections. These will be
extended in December to include 2023 for the first time and we
expect the ECB to forecast another year of below-objective
inflation, consistent with the need for additional policy
accommodation.
Our view is still that the Pandemic Emergency Purchase
Programme (PEPP) remains the ECB's favored policy instrument.
Therefore, our baseline policy forecast is for an additional EUR500
billion of asset purchases under the PEPP to be announced on 10
December.
French industrial production rose by 3.8% month on month (m/m)
in July. This followed rises of 20.0% m/m in May and 13.0% m/m in
June. (IHS Markit Economist Diego Iscaro)
Industrial output had contracted by 16.9% m/m in April and
20.5% m/m in May, and output in July was still 7.1% below its level
in February.
Manufacturing production rose at a slightly stronger rate of
4.5% m/m in July, following an increase of 14.8% m/m in June.
Manufacturing output was still 7.8% below its pre-coronavirus
disease 2019 (COVID-19) virus pandemic level in February.
The breakdown by product shows production of transport
equipment growing particularly strongly in July for the third
consecutive month. It rose by 8.1% m/m, following increases of
53.1% m/m and 39.5% m/m in May and June, respectively.
Nevertheless, production of transport equipment remained almost
one-quarter below its pre-pandemic level, representing the most
sluggish recovery among all the production sectors (see chart
below). Only production in the pharmaceutical sector overtook its
February level in July (+2.5%).
Meanwhile, production of electrical and electronic goods also
rose strongly in July (standing "just" 4.9% below its February
level). Food/beverages production also continued to recover (+2.3%
m/m), standing only marginally below its pre-pandemic level
(-0.6%).
The UK government has allocated further funding and is
considering further measures to support the transition to battery
electric vehicles (BEVs) in the country. According to a statement
published yesterday (9 September) by the Department for Transport
(DfT) to coincide with World Electric Vehicle Day, it is providing
GBP12 million (USD15.6 million) to fund research and development
(R&D) investment to support a series of competitions for
promising BEV technologies, including one that could lead to a
six-minute battery charge. In addition, a scheme to allow
businesses to try BEVs for free for two months before buying has
been launched by Highways England. Around GBP9.3 million has been
allocated to encourage those with diesel van fleets to make the
switch. The government is also reportedly considering
recommendations in a government-commissioned report by the Office
for Low Emission Vehicles (OLEV). These include installing charge
points at popular destinations such as supermarkets and tourist
sites, consistent and clear public signage for drivers on UK roads,
and guidance for local authorities on painting electric vehicle
(EV) parking spaces green. (IHS Markit AutoIntelligence's Ian
Fletcher)
The board of the Schaeffler Group has said that it plans to cut
4,400 jobs from its workforce in Germany and Europe by the end of
2022, according to a company statement. The headcount reductions
will focus mainly on 12 locations in German as well as two in
Europe. At the same time, Schaeffler has said that it will refocus
on its German sites at Herzogenaurach, Bühl, Schweinfurt, Langen,
and Höchstadt in order to cluster technology and production in
these areas, with further research and development (R&D)
investment being made at these locations. The company says that the
cost of the job cuts and other elements of the efficiency drive
will be in the region of EUR700 million (USD828.6 million) although
as a result the company expects to save around EUR250-300 million
annually, with 90% of these savings being realized by 2023. These
new measures are an enhancement to an efficiency program that was
first announced back in 2018. Schaeffler is the parent company of
the world's fourth-largest tier-one component manufacturer,
Continental AG, which recently announced its own comprehensive
cost-cutting program in response to the post-COVID-19 virus
business environment. (IHS Markit AutoIntelligence's Tim
Urquhart)
Dutch consumer prices increased by 0.7% year on year (y/y) and
dropped by 0.5% month on month (m/m) in August, according to the
national consumer price index (CPI) measure, and grew by 0.3% y/y
and fell by 0.7% m/m according to the EU-harmonized measure. This
marks the sharpest fall in headline inflation in 11 years. (IHS
Markit Economist Daniel Kral)
Among the biggest drivers of the decrease in August were
airfares and package holidays. The former declined by 21.6% y/y,
after rising 4.8% y/y in July, while prices of the latter declined
by 11.5% y/y in August after a small rise of 0.5% y/y in July.
Among the main sub-categories, clothing and footwear and transport
were the biggest drags (see table below).
Statistics Netherlands (Centraal Bureau voor de Statistiek:
CBS) also notes that food price inflation slowed from 1.9% in July
to 0.9% in August. This was driven by lower prices for vegetables
and meat.
Core inflation collapsed from 2.6% y/y in July to 0.8% y/y in
August. This almost closes the differential versus the extremely
low core inflation rate in the eurozone.
August's inflation rate was heavily affected by seasonal
factors and heavy discounting for flights and holidays, given
consumers' reluctance to travel this year. It is likely that the
annual inflation numbers will be choppy in the coming months.
According to all measures, Swedish headline consumer price
inflation edged up in August. The consumer price index (CPI), which
is the national definition, came in at 0.8% year on year (y/y), up
from 0.5% in July. According to the EU-harmonized measure (HICP),
inflation was 1.0% y/y, up from 0.7% in July. (IHS Markit Economist
Daniel Kral)
CPI at fixed interest rates (CPIF), which is the most closely
watched indicator by the central bank, also edged up to 0.7% y/y in
August, which is 0.5 percentage point (pp) above the Riksbank's
latest forecast from 1 July. CPIF excluding energy came in at 1.4%
y/y, marginally lower than in July but still 0.1 pp above the
Riksbank's July forecast (see chart 2).
On an annual basis, food and non-alcoholic beverages (+0.3 pp),
restaurants (+0.2 pp), and housing (+0.2 pp) were the main positive
contributors to headline CPIF inflation. Conversely, fuel (-0.3
pp), electricity (-0.3 pp), and communication (-0.2 pp) subtracted
most from headline inflation.
On a monthly basis, CPIF fell by 0.1% month on month (m/m),
compared with a drop of 0.4% m/m in August 2019. The main
contribution to the monthly rate came from the price of
electricity, which added 0.4 pp to the headline rate, and higher
prices for miscellaneous goods and services, adding 0.1 pp. These
were offset by lower prices for transport (-0.4 pp), car rental
(-0.2 pp), and package holidays (-0.2 pp).
Inflation continues to be significantly below the Riksbank's
target, following a historic drop in GDP in the second quarter with
clear signs of a partial rebound in the third quarter. Inflation in
the coming months is likely to continue to be choppy and weighed
down by the krona's strength against the euro and US dollar.
Coca-Cola will eliminate virgin oil-based plastics in Norway
and Netherlands. From October 2020, the soft drinks giant's
Coca-Cola, Sprite and Fanta will be transitioning to 100% rPET in
the Netherlands. Small plastic bottles first, then large formats
follow in 2021. After the switch to 100% rPET in the Netherlands,
the company would eliminate the use of over 10,000 tonnes of new
virgin oil-based plastic. Meanwhile, Coca-Cola in Norway will be
moving to 100% rPET for all plastic bottles that it produces
locally during H1 2021, which will remove around 4,300 tons of new
virgin oil-based plastic per year. Coca-Cola said that it is the
first company to move its entire portfolio of locally produced
plastic bottles to 100% rPET in both countries. The effective
operation of local Deposit Return Schemes (DRS) enabled Coca-Cola's
switch. Joe Franses, vice president sustainability at Coca-Cola
European Partners, said:" Markets with well-designed DRS such as
those in Sweden, the Netherlands and Norway not only have high
collection rates but also have the capacity to collect a higher
grade of material with less contamination." (IHS Markit Food and
Agricultural Commodities' Hope Lee)
The Dubai Supreme Council of Energy (DSCE) has issued a
directive to government organizations to increase the number of
electric and hybrid vehicles to at least 10% of their overall
annual procurement of vehicles until the end of 2024, and to
increase the number of purchased, as well as leased, electric and
hybrid vehicles to 20% from 2025 to the end of 2029, and 30% from
2030, reports Zawya. Saeed Mohammed Al Tayer, vice-chairman of the
Supreme Council of Energy in Dubai, said, "The Council's new
directive to increase the percentage of electric and hybrid
vehicles in government organizations will make them role models for
other organizations in increasing the use of
environmentally-friendly vehicles." (IHS Markit AutoIntelligence's
Tarun Thakur)
Asia-Pacific
APAC equity markets closed mixed; India +1.7%, South
Korea/Japan +0.9%, Australia +0.5%, Mainland China -0.6%, and Hong
Kong -0.6%.
Japan's private machinery orders (excluding volatiles) - a
leading indicator for capital expenditure (capex) - rose by 6.8%
month on month (m/m) in July following a 7.6% drop in the previous
month. (IHS Markit Economist Harumi Taguchi)
The improvement reflected a continued rise in orders from
manufacturing (up 5.0% m/m) and a rebound for orders from
non-manufacturing (up 3.4% m/m).
Machinery orders from overseas increased by 13.8% m/m for the
first rise in four months.
Orders from a broad range of manufacturing groupings continued
to rise in line with the resumption of economic activity following
the lifting of the state of emergency in late May. The improvement
was partially offset by declines in orders from information and
electronics equipment, electrical machinery, and some other
groupings.
The increase in orders from non-manufacturing (excluding
volatiles) was thanks largely to rebounds in orders from finance
and insurance, construction, and the miscellaneous
non-manufacturing grouping.
According to the Machine Tool Builders' Association, the
contraction of machinery tool orders from overseas continued to
narrow in August, which could drive recovery in exports and
industrial production. That said, it will take some time for
private machinery orders (excluding volatiles) to rise at a faster
pace.
Honda has expanded its monthly flat-rate mobility service for
used cars, 'Honda Monthly Owner', to four Honda-certified used-car
dealerships in Japan's Aichi Prefecture. By the end of 2020, Honda
expects to expand this service to Hokkaido, Miyagi, Gunma,
Kanagawa, Osaka, Okayama, and Fukuoka prefectures in Japan. The
service subscription is available for a minimum of one month up to
a maximum of 11 months, a first for any Japanese automaker, claims
Honda. The usage fee will include vehicle fee, automobile tax, auto
liability insurance premium, voluntary insurance, registration, and
maintenance. At present, Honda is offering used models of the
N-Box, Fit Hybrid, Freed Hybrid, Vezel Hybrid, and N-Box
wheelchair-specification car under this service. (IHS Markit
Automotive Mobility's Surabhi Rajpal)
Takeda (Japan) has agreed to divest a number of non-core
prescription treatments in several therapeutic categories, marketed
mainly in Europe and Canada, to Cheplapharm (Germany) for USD562
million, the Japan-based company said in a statement. Under the
agreement, Takeda's divestment to Cheplapharm will include
cardiovascular/metabolic and anti-inflammatory treatments, as well
as calcium, which together earned sales of approximately USD260
million in fiscal year (FY) 2019. The deal is expected to close by
end-FY 2020. Takeda plans to use the proceeds of the deal to reduce
its debt, as well as to accelerate deleveraging towards its target
of 2x net debt/adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) within FY 2021-2023. The deal marks
further progress in Takeda's strong push to divest non-core assets
and pay down debt acquired during its takeover of UK pharma major
Shire in 2019. The divestment will also enable Takeda to further
focus its Europe and Canada business units on core areas, building
on its recent sale of approximately 110 non-core over-the-counter
(OTC) and prescription pharmaceutical treatments marketed in
Europe, as well as two manufacturing sites in Denmark and Poland,
to Orifarm Group. (IHS Markit Life Sciences' Sophie Cairns)
Changan Automobile has partnered with Chinese battery-maker
Contemporary Amperex Technology Co Limited (CATL) to develop
intelligent-connected electric vehicles (EVs), reports Gasgoo. This
partnership is expected to help Changan implement its intelligent
travel strategy, "Beidou Tianshu", and new energy vehicle (NEV)
strategy, "Shangri-la". Changan has been working in the three areas
of autonomous vehicles (AVs), intelligent interaction, and
intelligent interconnection to provide a smart-driving experience.
Earlier this year, Changan unveiled a Level 3 automated vehicle
system, which will be rolled out on all of its recently released
UNI-T models. In 2018, Changan announced that it would "no longer
produce non-networked cars by 2020" (see China: 27 August 2018:
Changan to have 100% connected cars in portfolio from 2020).
Changan has partnered with Huawei to conduct research and
development in the fields of intelligence, electrification,
connectivity, and vehicle sharing at their joint innovation center.
(IHS Markit Automotive Mobility's Surabhi Rajpal)
Chinese automaker Guangzhou Automobile Group Company (GAC)
recorded an 11.6% year-on-year (y/y) increase in sales during
August to 180,609 units, according to a company statement. (IHS
Markit AutoIntelligence's Nitin Budhiraja)
Of this total, passenger car sales accounted for 180,308 units,
up 11.6% y/y, while commercial vehicle sales reached 301 units,
compared with 193 units in August 2019.
On a year-to-date (YTD) basis, GAC's total sales are down 9.9%
y/y at 1.189 million units. Of this total, YTD sales of passenger
cars stand at 1.187 million units, down 9.9% y/y, while YTD sales
of commercial vehicles are down at 1,621 units, compared with 1,798
units in the same period last year.
Among the group's joint ventures (JVs), Guangqi Honda ranked
first with sales of 72,587 units in August, up 26.18% y/y, and
462,779 units in the YTD, down 9.55% y/y.
Sales of GAC Toyota increased 15.5% y/y to 67,000 units in
August and are up 7.24 y/y at 462,449 units in the YTD.
GAC Mitsubishi Motors' sales plunged 53.7% y/y to 5,002
vehicles in August, with its YTD sales down 53.3% y/y at 39,681
units.
Sales of GAC Fiat Chrysler Automobiles (FCA) tumbled 40.0% y/y
to 3,201 units last month and have decreased 48.6% y/y to 23,813
units in the YTD.
Meanwhile, sales of GAC's wholly owned brands totaled 32,518
units in August, up 8.64% y/y, and now stand at 198,782 units in
the YTD, down 18.4% y/y.
According to news sources, HHI will team up with GIG and Total
for the 1.5 gigawatts (GW) of floating offshore wind projects in
Ulsan. GIG, a UK investment entity focused on green transition, and
Total, French oil and gas company, will co-develop the offshore
wind power farms near the city. While, HHI will construct the
floating structures for the wind turbines. To move away from fossil
fuel-powered energy generation, South Korea intends to build more
wind farms off the southwestern coast of the country. The plan
includes the construction of offshore wind farms with a combined
capacity of 2.4 GW by 2028. (IHS Markit Upstream Costs and
Technology's Jessica Goh)
Vietnamese automaker VinFast signed an agreement on 9 September
to purchase General Motors (GM) Holden's Lang Lang proving ground
in the Australian state of Victoria, reports the Vietnam News
Agency. The 877-hectare site has 44 km of sealed and unsealed test
roads, skidpans, and 4.7 km of recently improved, high-speed banked
oval track. It is surrounded by 18 km of fencing to ensure
confidentiality. The Lang Lang proving ground is among the oldest,
yet most modern in the world. VinFast did not reveal the value of
the deal. VinFast, a new entrant in the car manufacturing industry,
hopes to produce 500,000 cars per year by 2025, with a local
content rate of 60%, and aims to be one of Southeast Asia's top car
manufacturers by 2025. The automaker has partnered with
world-leading automotive technology and manufacturing consulting
firms such as BMW, Magna Steyr, and AVL. It has also signed
agreements with companies such as Pininfarina, Siemens, Bosch,
Torino Design, Italdesign, Zagato, and the German Chamber of
Commerce and Industry to develop cars and buses. (IHS Markit
AutoIntelligence's Jamal Amir)
Posted 10 September 2020 by Chris Fenske, Head of Fixed Income Research, Americas, IHS Markit
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