Toyota could delay UK investment decision to see Brexit terms
Japanese carmaker Toyota may delay a decision on whether to build its next-generation Auris model at its British car plant to see the outcome of Brexit negotiations, a senior executive told Reuters on Wednesday.
Toyota currently builds its Auris hatchback and family Avensis car at its Burnaston plant in the north of England, with a decision due as early as next year on whether to build the new Auris there.
Since Prime Minister Theresa May said Britain would leave the EU's single market and could quit the customs union as it exits the trading bloc, automakers have become concerned their vehicles could face export tariffs.
“By 2018 probably we have to make some decision, but it doesn't mean to start the investment,” executive vice president Didier Leroy told Reuters at the Geneva motor show.
Asked whether Toyota could extend the current cycle of production to delay the decision until after the terms of Britain's departure from the EU are clear, Leroy said that wasn't what was planned, “but it's possible.”
Toyota is due to end production of the current Auris model around the turn of the decade.
Automotive media have also reported it is likely to end production of the Avensis due to the lack of demand in the mid-size D-segment of cars.
Leroy said the firm was evaluating the future of the model, but no decisions had been made. “Can we afford to have a specific model specifically for Europe, designed for Europe, produced in Europe and sold only in Europe or do we want something that is a little bit more global which can be designed and produced in Europe but using more global components?”
Legal & General celebrates 17% increase in profits in 2016
Insurer Legal & General has cheered a double-digit rise in profits helped by surging annuity sales and a raft of new business for its retirement arm.
The FTSE 100 firm said annual pre-tax profits jumped 17 per cent to £1.6bn in 2016, with Legal & General Retirement (LGR) securing record profits after inking deals with the pension funds of ICI and Rolls-Royce Group.
LGR's new business rose to £8.5bn from £2.9bn over the period, while new annuity sales soared 155 per cent to £7bn, bumping up the division's pre-tax profits by 17 per cent to £847m.
The firm's said its investment arm had delivered a strong performance in an “uncertain environment”, with assets under management growing by a fifth to £894.2bn.
However, a move to stop “box profits” - a controversial practice where asset managers keep the difference when buying and selling units - saw transactional revenues within Legal & General Investment Management slip 30 per cent to £30m.
Group chief executive Nigel Wilson said the company's long-term approach to strategy and investment had delivered a “terrific financial performance”.
“We believe the UK remains a great place for us to help fill the huge funding gaps and under-provision of key financial products.
“Additionally, we are accelerating the evolution of our US businesses,” he added.
EDF eyes new UK gas power plant as supply gap looms
French utility EDF is considering building a new gas-fired power station in the northeast of England, close to some of its existing plants, the company's British arm said.
To avoid a potential supply gap, Britain needs to invest in new generation to replace aging coal and nuclear plants set to close in the 2020s.
“EDF Energy is examining the possibility of constructing a small gas-fired power station ... on land adjacent to the existing power stations at West Burton in Nottinghamshire,” a spokeswoman for EDF Energy said via email late on Tuesday.
The new gas plant would have a capacity of up to 299 megawatts, less than a tenth of the capacity of the new Hinkley C nuclear plant EDF is also building in Britain.
EDF said it would consult with the local community on the plans over the next few months, but did not give a timeframe on when a decision would be made or how long the plant would take to build.
EDF already owns the 2,000 megawatt West Burton A coal-fired power plant and the 1,500 MW West Burton B gas-fired power plant at the Nottinghamshire site.
“If the (gas) power station was to go ahead it would be ideally suited to provide generation at times of peak demand,” the spokeswoman said.
The growth of intermittent renewable electricity production in Britain means the country needs more flexible generation which can ramp up quickly when demand is high.
Fiat Chrysler's merger options dwindle as VW rejects overtures
Fiat Chrysler boss Sergio Marchionne's attempts to find a partner were frustrated for a second time in as many days on Wednesday, as Volkswagen joined General Motors in dismissing any interest in talks with their smaller rival.
Marchionne said on Tuesday that European market leader VW would be hardest hit by PSA Group's purchase of Opel, which will create a stronger European No. 2, and the pressure could prompt VW to sit down with FCA.
But VW chief Matthias Mueller was quick to rebuff the overtures, saying his company had enough on its plate already as it battles to recover from a diesel emissions scandal.
“We are not ready for talks about anything ... we have other problems,” he told Reuters on the fringes of the Geneva auto show on Wednesday. “I haven't seen Marchionne for months.”
Marchionne has long advocated car industry mergers to share the costs of making cleaner and more technologically advanced vehicles and on Tuesday stressed deals were as vital as ever.
“You need to achieve scale or we will end up delivering an incredibly poor return and margins on this business. We need to fix this,” he said, referring to the wider auto industry.
The PSA-Opel deal leaves FCA in an increasingly difficult position in Europe. The indebted group has a European market share of only about 7 per cent, its operating margin of 2.5 per cent lags most rivals, as does its spending on cleaner and more autonomous cars.
Mueller's rejection follows a similar snub from GM (GM.N), after Marchionne said the U.S. company remained his favourite merger candidate despite its decision to exit Europe by selling Opel and having rebuffed FCA's approaches several times already.
China grants preliminary approval to 38 new Trump trademarks
China has granted preliminary approval for 38 new Trump trademarks, paving the way for President Donald Trump and his family to potentially develop a host of branded businesses from hotels and golf clubs to bodyguard and concierge services, public documents show.
Trump's lawyers in China applied for the marks in April 2016, as Trump railed against China at campaign rallies, accusing it of currency manipulation and stealing US jobs. Critics maintain that Trump's swelling portfolio of China trademarks raises serious conflict of interest questions.
China's Trademark Office published the provisional approvals on 27 February and Monday.
If no one objects, they will be formally registered after 90 days. All but three are in the president's own name. China already registered one trademark to the president, for Trump-branded construction services on 14 February, the result of a 10-year legal battle that turned in Trump's favor after he declared his candidacy.
Ethics lawyers across the political spectrum say that if President Trump receives any special treatment in securing trademark rights, it would violate the US Constitution, which bans public servants from accepting anything of value from foreign governments unless approved by Congress. Concerns about potential conflicts of interest are particularly sharp in China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party.
AIG plans to have two subsidiaries in Europe from 2019
American International Group Inc (AIG.N) said it intends to have two insurance subsidiaries in Europe to continue operation of its business across the European Economic Area (EEA) and Switzerland once the United Kingdom leaves the European Union.
U.S. insurer AIG which currently writes business in Europe from UK-based insurance company AIG Europe Ltd, and has branches across the EEA and Switzerland, is looking at Luxembourg for its second subsidiary.
AIG joins a growing list of finance industry companies that have said they may have to shift some operations to continental Europe to maintain links to customers after Brexit.
“This is a decisive move that ensures AIG is positioned for whatever form the UK's exit from the EU ultimately takes,” Chief Executive Anthony Baldwin said in a statement.
The proposed restructuring is expected to complete in the first quarter of 2019, the company said.
Britain to review tax to speed up North Sea oil and gas deals
Britain will look at ways of making it easier to sell North Sea oil and gas fields by changing tax rules in order to keep them producing for longer, the finance ministry said.
The move, which is due to be announced in Chancellor Philip Hammond's budget on Wednesday, follows a call by the industry's oil lobby group for a change to decommissioning tax rules that have prevented deals in the North Sea.
Owners of oil and gas assets get tax relief on the future costs of dismantling them, but as assets are sold the relief cannot be passed on to new owners.
“The UK government will publish a discussion paper and establish a panel of industry experts to consider how tax can assist sales of oil and gas fields, helping to keep them productive for longer,” the ministry said in a statement.
The North Sea has seen an uptick in deals this year, mainly due to the £3.13bn acquisition of a large chunk of Shell's assets by private equity-backed Chrysaor.
But deals would have been concluded more quickly and others would come to fruition if the decommissioning cost taxation regime is updated, Mike Tholen, economics director of Oil and Gas UK, said.
“For (new buyers) it would be easier for the deals they are thinking about if the ability to release decommissioning tax relief between the vendor and the purchaser was part of the tax regime,” Tholen added.
Merkel: had no prior knowledge of VW emissions scandal
German Chancellor Angela Merkel says she only found out about Volkswagen's use of software to cheat on emissions through the media.
Appearing as a witness on Wednesday before a German parliamentary panel on the Volkswagen emissions scandal, German news agency dpa says Merkel said she was only aware of the cheating when it emerged in the United States in September 2015.
Volkswagen is recovering from a scandal that damaged its reputation. The company has admitted and paid out billions for installing software on diesel engines that activated pollution controls during tests and switched them off in real-world driving.
The German parliamentary inquiry was set up last July. It is tasked with looking into whether the German government knew about vehicles' emissions on the road diverging from their emissions in testing.
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