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US equity markets closed higher, while APAC and European markets
closed mixed for the second consecutive day. The conclusion of the
two-day FOMC meeting gave a further boost to US equities and credit
late in the day, while also driving the US dollar lower. iTraxx and
CDX indices closed tighter across IG/high yield and oil also closed
higher on the day. All eyes will be on tomorrow's 8:30am EST US
weekly claims for unemployment insurance to see if the recent
uptick in jobless claims continues in the wake of the increasing
number of business restrictions aimed at slowing the spread of
COVID-19.
Americas
The Federal Open Market Committee (FOMC) concluded its
scheduled 2-day policy meeting this afternoon. The statement
released at the conclusion of the meeting indicated, as we
expected, that the FOMC held the target for the federal funds rate
at its current setting of a range of 0% to ¼%. Net investment in
Treasury securities and mortgage-backed securities (MBS) will
continue at least at their current paces. Today's statement was
consistent with IHS Markit's forecast. (IHS Markit Economists Ken
Matheny and Kathleen Navin)
The Federal Reserve has warned that the fate of the world's
largest economy would "depend significantly on the course of the
virus" as the US central bank extended measures to deal with the
risk of an international shortage of dollars. In an indication of
concerns that the pandemic could stir fresh trouble in
international financial markets in future, such as the dollar
shortages that occurred early in the pandemic, the Fed said it
would extend emergency swap lines with some central banks until the
end of the first quarter of 2021, as well as a temporary repurchase
facility for international monetary authorities to swap Treasuries
for dollars. (FT)
US equity markets closed higher today, with the Fed providing a
strong tailwind in the afternoon; Russell 2000 +2.1%, Nasdaq +1.4%,
S&P 500 +1.2%, and DJIA +0.6%. The 2:00pm EST post-FOMC meeting
announcement and Fed Chairman Powell's press conference 30 minutes
created positive momentum in the equity markets, which retreated at
3:00pm EST and then surged to the intraday high after 3:30pm
EST.
10yr US govt bonds closed flat/0.58% yield and 30yr bonds
+3bps/1.25% yield.
DXY US dollar index closed at -0.5%/93.26, with a brief rally
from the lows occurring at the conclusion of Fed Chairman Powell's
press conference.
CDX-NAIG closed -2bps/70bps and CDX-NAHY -18bps/436bps. The
chart below indicates that most of today's tightening in CDX-NAHY
occurred after the FOMC announcement and Fed Chairman Powell's
press conference.
Crude oil closed +0.6%/$41.27 per barrel.
In a press release, Hess Corporation reported a second-quarter
2020 net loss of $320 million, compared with a net loss of $6
million in the second quarter of 2019. The adjusted net loss was
$320 million, compared with an adjusted net loss of $28 million in
the prior-year quarter, primarily due to lower realized selling
prices, the company said. Net cash provided by operating activities
was $266 million, compared with $675 million a year ago, primarily
due to lower realized crude oil selling prices and the impact on
cash flows from deferring sales for the 3.7 MMbbl loaded on VLCCs
in the quarter, the company said. The Exploration and Production
net loss was $249 million in the second-quarter of 2020, compared
to a net income of $68 million in the second quarter of 2019.
Second quarter E&P adjusted net loss was $249 million, compared
with an adjusted net income of $46 million in the second quarter of
2019. Net production, excluding Libya, was 334,000 boe/d, up 22%
from 273,000 boe/d in the prior-year quarter, primarily resulted
from a 39% increase in Bakken production and production from the
Liza Field, offshore Guyana. Bakken net production was 194,000
boe/d (85% liquids), up 39% from 140,000 boe/d in the prior-year
quarter, primarily due to increased wells online and improved well
performance, the company said. There was no net production for
Libya in the quarter due to the declaration of force majeure by the
Libyan National Oil Corporation. Hess revised its 2020 production
forecast (excluding Libya) at 330,000 boe/d, up from its previous
guidance of 320,000 boe/d, announced in May 2020. (IHS Markit
Upstream Companies and Transactions' Karan Bhagani)
Coronavirus cases in the U.S. increased 1.9% as compared with
the same time Tuesday to 4.39 million, according to data collected
by Johns Hopkins University and Bloomberg News. The increase was
higher the average 1.6% daily gain over the past week. Deaths rose
1.1% to 149,961. (Bloomberg)
While coronavirus-induced volatility plagued equity markets in
March, IHS Markit closely monitored daily factor and style model
performance with weekly performance reviews of daily style
exposures. Volatility has since settled down, though still in
excess of levels at the start of the year. Given these unusual
times, with the COVID-19 pandemic wreaking havoc from a health and
financial perspective, we extend our review from both a macro and
factor view during the first six months of this year. (IHS Markit
Research Signals)
Large caps were favored over small caps through June, while the
prolonged growth cycle over value strategies benefited further from
a sharp bounce since March
Price Momentum and Historical Growth factors, such as 24-Month
Active Return with 1-Month Lag and 1-yr Change in Sales,
respectively, were consistent outperformers, while Deep Value
measures suffered, particularly those based on analyst estimates,
with Leading 12 Month EBITDA/EV the weakest of the group
The Historical Growth Model topped all other style models,
though the Price Momentum model has been making a comeback since
March, while the Deep Value Model sat at the opposite extreme
The US goods deficit narrowed $4.7 billion in June to $70.6
billion, a larger narrowing than both we and the Bloomberg
consensus estimated. Inventories, though, fell more than expected.
(IHS Markit Economists Ben Herzon and Lawrence Nelson)
Both exports +13.9% and imports +4.8% rose considerably more
than expected, with the balance implying somewhat more net exports
in the second and third quarters.
The combined inventories of wholesalers and retailers fell
sharply in June, as recovering final sales were not met with
domestic production.
In response to these developments, we lowered our estimate of
second-quarter GDP growth by 0.2 percentage point to -35.3% and we
raised our forecast of third-quarter GDP growth by 0.9 percentage
point to +19.8%.
We expect the pace of recovery to slow in July, however, as
households and businesses react with renewed caution to a surge in
new COVID-19 infections that began in mid-June and as state and
local authorities reimpose some restrictions on activity that had
been lifted in May and June.
The US Pending Home Sales Index (PHSI) jumped 16.6% to 116.1 in
June, its best reading since February 2006. Two months earlier, the
index plunged to an all-time low of 69. (IHS Markit Economist
Patrick Newport)
For the second month in a row, all four regions posted
double-digit gains. The South, which accounted for 46% of existing
home sales in June, soared to an all-time high, despite the
resurging pandemic (note: the index is an end-of-month measure;
daily cases of the pandemic began rising in mid-June).
Some home price indicators—the median and average price of
an existing home, the FHFA seasonally adjusted home price index,
and, possibly, the Case-Schiller 10- and 20-city indexes (these are
three-month moving averages)—have declined recently. This,
along with record low interest rates, is boosting demand.
Applications to buy homes remains strong, according to the
Mortgage Bankers Association. Its Purchase Index for the week
ending 24 July was 21% higher than a year earlier, according to a
report released today (29 July).
The PHSI leads existing home sales by a month or two, according
to the National Association of Realtors. Expect a solid increase in
existing home sales in July or August or both.
The Alaskan salmon season has improved significantly over the
past four weeks, although many areas of the state remain behind
historical averages. Total salmon harvest to week 30 (July 30,
2020) was 59.4 million fish, with 45% of the catch forecast for
this year realized. "The focus of Alaska's salmon harvest is
shifting from sockeye to pink as Bristol Bay winds down," McDowell
Group economist Garrett Evridge noted in the Alaskan salmon weekly
report produced on behalf of the Alaska Seafood Marketing
Institute. (IHS Markit Food and Agricultural Commodities' Estela
Cuesta)
Nearly 42 million sockeye have been harvested statewide - 40
million in Bristol Bay - a pace 19% behind last year's record
production but on par with the 10-year average.
Around 13.2 million of pink fish have been landed in 2020 to
date (week 30), around 5.2% behind the previous year. The current
pace is comparable to 2018, but generally behind the longer-term
even-year average.
Four million keta have been landed in 2020, against 11.7
million for the same period in the previous year: "The lowest for
this point in the season in at least 12 years, and likely more,"
Evridge highlighted.
Coho landings are also trending below typical levels with total
harvest of 218,000 fish to date (week 30). "In most years, at least
one million coho have been harvested by this point," Evridge
said.
Chinook landings are 29% behind the 2019 pace, reaching 146,000
fish. Harvest in Southeast, however, is ahead of last year.
IHS Markit has released its latest research on the average age
of vehicles in operation (VIO) in the United States, noting that it
has increased by one month, from 11.8 to 11.9 years, since our
previous study. (IHS Markit AutoIntelligence's Stephanie Brinley)
Although slight, the increase may generate new business
opportunities for companies operating in the aftermarket and
vehicle-servicing sector in the US.
The change partly is a result of lower new vehicle sales in the
US, as new vehicle sales provide a pipeline for young vehicles to
enter the marketplace.
IHS Markit's research shows that new vehicles were only 6.1% of
the 280,000 million VIO in the US in 2019, compared with 6.7% in
2016.
On the opposite end is the rate of scrappage pulling vehicles
out of the market. In 2019, the scrappage rate as a percentage of
vehicles on US roads was 5.1%, compared with 4.6% in 2016, a record
sales year for new light vehicles.
The COVID-19 pandemic is expected to have an impact on the
average age of US vehicles in the near term. An older fleet may
support replacement sales demand, but retaining cars longer keeps
new-vehicle buyers out of the market and delays potential
sales.
Chile's President Sebastián Piñera ratified on 24 July a law
that allows those affiliated with the country's pension fund
administrators to withdraw up to 10% of their accumulated personal
savings. The law took the form of a constitutional reform and was
submitted by opposition parties to help households to access
additional liquidity against the background of financial stress
caused by the COVID-19-virus outbreak. Withdrawals, which are
voluntary and will not be taxed, will be allowed until 24 July
2021. (IHS Markit Country Risk's Carla Selman, Ellie Vorhaben, and
Alejandro Duran-Carrete)
The measure represents a political defeat for President
Sebastián Piñera and is likely to strengthen the opposition ahead
of an electoral year. Piñera strongly opposed the initiative,
claiming it will further curtail future pension payouts from levels
that are already low, but stepped back from challenging it to avoid
political damage and the risk of widespread popular protests.
Opposition left-wing and center-left parties are likely to
accelerate and propose deeper changes to planned pension reform
under review in Congress.
The immediate effect will be a boost in spending, limiting
initial improvements in banking-sector liquidity. Amounts
authorized for withdrawal range from CLP1,000,000 (USD1,300) to
CLP4,300,00 (USD5,600). Such withdrawals are likely to be used to
boost consumption, especially as the labor market had shed 1.64
million jobs as of May 2020 (with an 18% decrease in employment
versus end-December 2019).
The portfolio of the AFP is likely to be modified to provide
enough liquidity for withdrawals. According to the Superintendence
of Pensions, roughly CLP32,007 billion of the AFP's assets are
allocated into securities issued by financial institutions, mainly
bonds of the 10 largest banks by assets.
There is an increased need for quantitative easing measures to
stabilize capital market; the AFP are likely to take more
risk.
Europe/Middle East/ Africa
European equity markets closed mixed; France +0.6%, UK flat,
Germany/Italy -0.1%, and Spain -0.6%.
10yr European govt bonds closed mixed; Italy -2bps, Spain
-1bps, and UK/France/Germany +1bp.
iTraxx-Europe closed -1bp/59bps and iTraxx-Xover
-4bps/362bps.
Brent crude closed +1.1%/$44.09 per barrel.
According to the National Statistics Institute (INE), the
volume of Spain's retail sales rose by 17.8% month-month (m/m) in
June after a 19.4% m/m gain in May. (IHS Markit Economist Raj
Badiani)
Retail spending still stood 5.4% below its February 2020 level,
while remaining 4.7% lower when compared to a year earlier.
Jittery consumers are likely to spend cautiously in the next
few months after the initial relief surge in May and June, fearing
the lingering impact of the COVID-19 virus crisis on the economy
and the labor market, alongside the risk of infection.
In addition, foreign visitors are at historic lows, which will
weigh down on the country's retail sector. Indeed, the retail sales
in Spain's tourist hotspots are lagging notably the national
average.
France's consumer confidence index declined from 96 in June to
94 in July, according to seasonally adjusted figures released by
the National Institute of Statistics and Economic Studies (Institut
national de la statistique et des études économiques: INSEE). The
index had previously fallen from 105 in February to 92 in May
before rebounding in June. (IHS Markit Economist Diego Iscaro)
The headline index was hit by a sharp fall in households' view
of their past standard of living , which worsened to its lowest
value since early 2015 (-66, following -57 in June). Moreover, the
index measuring households' past financial situation also fell in
July, but at a lesser rate (-15 in July versus -12 in June).
Households' views on their future financial situation and the
general economy remained relatively stable following their
substantial increase in June. Similarly, the index measuring
households' major purchases intentions over the coming year edged
downwards following a large rise during the previous month.
Saving intentions continued to increase in July. Indeed, the
related index rose to its highest level since December 2014.
Slightly more encouragingly, households' perception of future
unemployment eased somewhat from June, but remains elevated by
historical standards (76 following 78 in June, well above a
long-term average of 33).
The decline in July's confidence index is partly explained by
the lagged impact of the shock experienced since March. However, it
also highlights that households are still far from confident about
their future financial and general economic outlooks. The increase
in the number of cases in some French regions, particularly since
mid-July, may have had an influence on the figures.
Michelin has announced that its financial performance in the
first half of 2020 has slipped to a loss as the COVID-19 virus
pandemic took its toll. For the six months ending 30 June, the
company's sales declined by 20.6% year on year (y/y) to EUR9,357
million. (IHS Markit AutoIntelligence's Ian Fletcher)
At the same time, its segment operating income has dropped by
78.4% y/y to EUR310 million, with its margin tumbling from 12.2% to
3.3%.
Operating income also contracted from EUR1,341 million to
EUR177 million, as net income went from a profit of EUR844 million
to a loss of EUR137 million.
On a segment basis, it revealed that its Automotive &
Related Distribution, which focuses on passenger car tires, has
fallen by 22.3% y/y to EUR4,394 million, and its operating income
dropped from a profit of EUR585 million in the first half of 2019
to a loss of EUR35 million during the most recent period.
Sales by its Road Transportation & Related Distribution
business retreated by 23.3% y/y to EUR2,411 million, as operating
income fell to a loss of EUR30 million against a profit of EUR279
million a year ago.
Revenues at its Specialty Businesses & Related
Distribution, which includes construction tires have slipped by
14.3% y/y to EUR2,552 million, while its operating income remained
in profit but dropped from EUR574 million to EUR375 million.
According to the Swedish National Institute of Economic
Research (NIER), Sweden's economic tendency indicator has improved
to 83.4 in July, a marked improvement compared with 64.8 in May and
75.3 in June. However, it remained below the 20-year average of
100, although it has recovered significantly since April's low.
(IHS Markit Economist Daniel Kral)
Manufacturing confidence improved to 95.7, with indicators for
capital and consumer goods producers close to historical averages.
Retail trade confidence jumped by 11 points in July owing to an
improved assessment of stock levels. Confidence in the services
sector improved owing to a better demand outlook but remained far
below the historical average.
Contrary to the broad-based improvements, the consumer
confidence index declined by almost one point in July to 83.3, down
from 84.1 in June. The deterioration is due to a more pessimistic
assessment of a good time to make major purchases and the current
state of the Swedish economy.
The latest uptick in confidence indicators suggests a gradual
return of activity after the bottom was reached in April. Absent a
new shock, we expect this improving trend to continue in the coming
months, although the pace is likely to be moderate.
The mild deterioration among consumers is also visible in other
real-time activity indicators. According to the Google Mobility
Report, footfall in the retail and recreation categories remained
flat in July, compared with the continuous improvements elsewhere
in Europe.
The National Statistical Institute (NSI) has published the
latest high-frequency data for Bulgaria. Bulgarian industrial
output collapsed in April and May, falling by 16% y/y and 18% y/y,
respectively. The manufacturing sector, specifically transport
equipment and machinery, has been particularly hard hit, reflecting
the impact of the lockdown and social distancing on factories as
well as the collapse of external demand. (IHS Markit Economist
Dragana Ignjatovic)
Industrial output has fallen by more than 8% y/y in the first
five months of 2020.
The weakness is also evident in the foreign trade data.
According to balance of payments statistics released by the
Bulgarian National Bank, exports fell by 20% y/y in April and May
while imports were down around one-third y/y in both months. This
reflects the economic shutdown of Bulgaria's key regional and EU
trading partners as well as the collapse of demand from households
and industry for imports. In addition, the services balance, which
includes tourism receipts, has fallen by three quarters y/y in May
alone.
The effect of the COVID-19 virus was also clearly visible on
the retail sector. According to NSI, retail sales collapsed by more
than 20% y/y in April and May. The data reflect the implementation
of lockdown and social distancing measures by the Bulgarian
government in March until mid-May when a moderate easing was
initiated.
In a separate release from NSI, consumer price inflation has
undergone a sharp deceleration through most of the second quarter,
ticking up modestly in June. Consumer price growth has slowed from
an average 3.6% y/y in the first quarter to an average 1.6% y/y in
the second, reflecting the global collapse in oil prices (amid
oversupply and the drying up of demand) and moderating food price
increases.
Turkish public banks have announced the exclusion of six major
automotive manufacturers from their loan packages with low interest
rates, reports the Halkbank. The manufacturers are Honda, Hyundai,
Fiat, Ford, Renault, and Toyota. The banks' decision was taken
because of price rises implemented by the automakers, which could
have a negative effect on automotive steel demand in Turkey. Haydar
Yenigun, chairperson of the Turkish Automotive Manufacturers'
Association and general manager of Ford Otosan, said, "It will
definitely have negative effects on our sales, but the amount is
not clear yet, we should wait and see." (IHS Markit
AutoIntelligence's Tarun Thakur)
According to the latest customs-based trade results from the
Georgian National Statistical Office (GeoStat), exports from
Georgia in the second quarter contracted by 24.8% year on year
(y/y), after falling by 5.7% y/y in the first quarter. (IHS Markit
Economist Venla Sipilä)
Contraction of imports intensified to 32.8% y/y, following a
downward revised decrease of 3.9% y/y in the first quarter.
As a result, the trade deficit in April-June narrowed by 38.5%
y/y, after easing by a more moderate rate of 2.7% y/y in the first
quarter and widening by 3.9% y/y in the final quarter of 2019. The
January-June trade gap settled at USD2.0 billion, narrowing by
21.3% y/y, with exports falling by 16% y/y and imports contracting
19% y/y.
Exports to countries of the European Union (EU) in the second
quarter fell around at the average rate, while exports to economies
of the Commonwealth of the Independent States (CIS) fell by a
particularly high rate of 43% y/y. Georgian EU-imports fell faster
than average, and its imports from CIS eased relatively
modestly.
Russia, which in the first half of 2019 had been Georgia's
leading export market, with a share of 14.6% of exports, now slid
to the third place with a share of 12.5%, with exports collapsing
by some 28% y/y. Exports to Turkey, Armenia, Ukraine and Azerbaijan
also contracted significantly. Conversely, exports to China soared
fourfold, lifting China to the top export destination, from the
eighth biggest export market a year earlier.
Imports from all key supplier countries fell clearly, although
relatively modestly (only by 5% y/y) from Russia. Even with a
contraction of 18% y/y, Turkey retained its place as the most
important import provider, followed by Russia, China and
Azerbaijan. Imports from Armenia increased by over a half, lifting
its share to 5.6% from 2.9% in January-June 2019.
Copper ores and concentrates and motor cars remained the top
export categories, with shares of around 21% and 12%, respectively.
Motor cars, copper ores and concentrates, and petroleum and
petroleum products were the leading import goods.
The Saudi Arabian budget deficit at the end of June reached
more than 75% of the gap expected for the full-year 2020. With the
government trying to control the gap, non-payment risks are rising.
Typically, spending accelerates toward the end of the year, which
is likely to push the government to delay some payments from this
year into next year, and potentially cancel some projects all
together. (IHS Markit Economist Ralf Wiegert)
Saudi Arabia's government posted a second-quarter deficit equal
to SAR109.2 billion (USD29.1 billion) as oil revenues alone fell
45% year on year (y/y), and total revenues dropped by 49% to
SAR133.9 billion. The impact of the global pandemic and the low oil
price have been responsible for the sharp fall of revenues.
Meanwhile spending reached SAR243.2 billion, a 17% y/y decline,
with the majority borne by capital expenditures.
The fiscal deficit for the quarter hit SAR104.7 billion, and
the gap for the entire first half of the year equaled SAR143.3
billion, more than three quarters of the SAR186.9-billion deficit
penciled in the original budget plan for the full-year 2020.
Already in June, the government abandoned the cost of living
allowance and thus cut spending by SAR45 billion on an annual
basis. It has also increased the VAT rate from 5% to 15% as of 1
July. VAT revenues in 2019 were SAR46.7 billion.
Fiscal results for the second quarter of 2020 have been largely
in accordance with IHS Markit's expectations. For the full-year
2020, we currently project the fiscal deficit to reach SAR346
billion, or 13.8% of GDP, despite the government's efforts to
contain the gap.
Botswana's GDP growth ticked up to 2.6% year on year (y/y) in
the first quarter, despite the continued poor performance of the
mining sector. IHS Markit expects Botswana's economy to contract by
8.8% in the full year 2020 due to the impact of the COVID-19
pandemic on both the domestic and external economies. (IHS Markit
Economist Archbold Macheka)
Botswana's economy grew by 2.6% y/y in the first quarter of
2020, up from 1.6% y/y in the previous quarter, latest official
data from Statistics Botswana show. The growth was driven largely
by the water and electricity; finance and business services; and
trade, hotels and restaurants sectors, which saw increases in value
added of 13.4%, 6.2%, and 4.4% respectively.
Support to the growth also came from the transport and
communications industry, which saw its value added increase by 2.6%
y/y in the first quarter. However, the industry's performance was
lowered by a decrease in real value added of the air and rail
transport sector due to the suspension of travel caused by COVID-19
virus containment measures.
Botswana's mining sector continued to struggle in the first
quarter, with the real value added of mining contracting for the
fourth straight quarter. The 6.1% y/y decline in mining activity in
the first quarter was influenced mainly by diamond production,
which shrank by 5.7% amid weak global diamond demand. The sector's
performance was weighed down by the value added of the ash
industry, which was pulled down by an 11.4% y/y fall in soda ash
production.
On the demand side, total final consumption expenditure
expanded by 3.5% y/y in the first quarter, with government and
household final consumption increasing by 3.9% and 3.4%
respectively. Gross fixed capital formation grew by 6.1%, thanks to
stronger growth in expenditure on construction and machinery and
equipment. Real exports of goods and services contracted 17.3% y/y
in the first quarter, pulled down by weak diamond exports (down
39.8%). Real imports of goods and services rose by 8.0% y/y in the
first quarter.
Asia-Pacific
APAC equity markets closed mixed; China +2.1%, Hong Kong +0.5%,
South Korea +0.3%, Australia -0.2%, India -1.1%, and Japan
-1.2%.
Fitch Ratings has revised its outlook on Japan's long-term
sovereign credit ratings from Stable to Negative, while maintaining
its long- and short-term sovereign credit ratings on the country at
A (20 on the IHS Markit scale) and F1+, respectively. (IHS Markit
Economist Harumi Taguchi)
The revision to Negative reflects Fitch's view that the higher
Japanese debt ratio and downside risks to the macroeconomic outlook
will exacerbate the challenge of placing the debt ratio on a
downward path over the medium term. Fitch projects that Japan's
gross general government debt ratio will rise to above 260% of GDP
in 2021-21 before turning to a gradual downward path.
Fitch's current rating is lower than the assessment of IHS
Markit (at 5), whereas S&P Global Ratings' sovereign credit
rating is at A+ (on the generic scale) and 15 (on the IHS Market
scale) with a Stable outlook. Moody's sovereign credit rating is at
A1 (on the generic scale) and 15 (on the IHS Markit scale) with a
Stable outlook.
Japan's confirmed COVID-19 cases are still far lower than the
country's G7 counterparts, and the fiscal support and expected
rebounds in external demand are likely to lead to a gradual
recovery in the second half of 2020. Nevertheless, the pandemic has
severely affected Japan's economy and Fitch believes a resurgence
in cases is creating the possibility of further containment
measures and risk to the economic outlook.
Mitsubishi Motors has announced plans to invest approximately
JPY8 billion (USD75.9 million) for the production of a new electric
kei car at the Mizushima Plant in Kurashiki city, Okayama
Prefecture, beginning in August 2020, according to a company
statement. The automaker plans to develop the new electric kei car
jointly with Nissan Motor, Mitsubishi's alliance partner. The
investment will be directed towards the setting up of assembly and
inspection equipment for the drive battery; the expansion of
stamping, welding, and painting assembly facilities following a
shift to in-house production of drive battery cases; and a line
expansion for the manufacturing of electric vehicle (EV) platforms.
The investment is in line with the initiatives by the
Renault-Nissan-Mitsubishi Alliance, unveiled in May, aimed at
improving the competitiveness and profitability of all three member
companies. Under the model, Nissan will assume leadership in
autonomous vehicle operations, while connected car technologies
will be led by Renault on Android-based platforms and by Nissan in
China. Renault will also lead the core system of the
electrical-electronic architecture, E-body, while the e-Powertrain
will be led by both Nissan and Renault. Mitsubishi will assume the
lead for plug-in hybrid electric vehicles (PHEVs) in the C and D
segments. (IHS Markit AutoIntelligence's Nitin Budhiraja)
The South Korean government has launched an investigation into
Tesla's Model 3 over possible problems with parts, reports the
Yonhap News Agency. The Korea Automobile Testing & Research
Institute (KATRI) of the Korea Transportation Safety Authority is
looking into whether the Model 3's autopilot driver-assist feature
has any safety problems. "The probe will be focused on the
anti-lock brake system and the lane-keeping assist system amid
reports that the vehicle may have faulty parts related to its
autonomous driving program," said an unnamed official at the South
Korean Ministry of Land, Infrastructure and Transport (MLIT). If
the Model 3 turns out to have faulty components, the ministry will
order the automaker to recall the model. The investigation will
take between six months and one year to complete. Tesla entered the
South Korean market in 2017 and currently sells the Model 3, Model
S, and Model X there. It has installed around 450 slow-charging
stations and 32 superchargers across the country. (IHS Markit
AutoIntelligence's Jamal Amir)
Real-Time Innovations (RTI), a software framework provider for
smart machines and real-world systems, has joined Baidu's Apollo
open-source, full-stack software for autonomous vehicles (AVs).
Baidu also developed a domain controller, called Apollo Computing
Unit (ACU), integrated with RTI Connext DriveTM software, to enable
full stack capability in mass production for car OEMs. Bob Leigh,
senior market development director, commercial at RTI, said, "The
autonomous vehicle market has experienced rapid growth in the last
several years. We developed RTI Connext Drive to give our customers
and partners the tools to solve complex autonomy challenges. In
joining the Apollo ecosystem, we are looking forward to conquering
the challenges hindering autonomous vehicle deployment and adoption
as we move into the next phase of autonomy." (IHS Markit Automotive
Mobility's Surabhi Rajpal)
Posted 29 July 2020 by Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
