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BW Businessworld

Globescan: Car Base

Ford Motor will invest up to $224.3 million to build its smaller sport utility vehicle EcoSport at its Romanian unit Automobile Craiova, Ford Europe CEO Jim Farley said.

Photo Credit : Shutterstock

Ford Motor will invest up to $224.3 million to build its smaller sport utility vehicle EcoSport at its Romanian unit Automobile Craiova, Ford Europe CEO Jim Farley said. Ford took over the struggling Romanian carmaker Automobile Craiova in 2008 and is producing its B-Max model there, although low demand has led to regular production stoppages. Ford will start producing the vehicle from autumn of 2017, Farley said. “As of that date, Craiova will become the only production source for the EcoSport model sold in Europe (except Russia),” he said.

Home Sick
US home resales fell sharply in February in a potentially troubling sign for America’s economy which has otherwise looked resilient to the global economic slowdown. The National Association of Realtors said existing home sales dropped 7.1 per cent to an annual rate of 5.08 million units, the lowest level since November. Sales have been volatile and prone to big swings up and down in recent months, following the introduction in October of new mortgage regulations, which are intended to help home buyers understand their loan options and shop around for loans best suited to their financial circumstances. February’s decline weighed on investor sentiment, with the S&P 500 stock index falling after the data was released. Sales fell across the country, including a 17.1 per cent plunge in the US northeast. Economists had forecast home resales decreasing 2.8 per cent to a pace of 5.32 million units last month. Sales were up 2.2 per cent from a year ago.

Small Talk
Apple launched its least expensive iPhone, the $399 iPhone SE, filling a hole in its product lineup with a small-screen model that targets new customers in emerging markets and fans of smaller phones as the company tries to reverse falling phone sales. The low-key launch, held at the technology company’s Cupertino, California campus rather than its traditional splash at a much larger venue in San Francisco, did not wow tech experts or investors. But the new mid-range model was seen as necessary to counter the dominance of cheaper phones running Google’s Android system.

White Wash
Wal-Mart Stores said it will build a dairy processing plant in Indiana to supply private-label milk to about 600 stores, curtailing business with some suppliers in the retailer’s sole foray into food processing in the US. The move helped spark a 12 per cent slide in shares of Dean Foods Co, one of the suppliers of milk to the affected stores. In a securities filing, Dean Foods said the change by Wal-Mart could lead to the loss of 100 million gallons of “very low-margin private-label fluid milk volume” from late 2017. It said it did not expect any impact on the supply of its own national brands and would not be material on its results.

Booster Dose
Euro zone business activity ended the first quarter on a higher note, surveys showed, suggesting extra stimulus from the European Central Bank may already be having a positive effect. The ECB chopped interest rates again and bolstered its asset purchase programme earlier this month as part of an ongoing battle to drive up growth and inflation in the 19-nation bloc. “There are some signs that perhaps the stimulus is being perceived by companies as a springboard for better growth coming up in the rest of the year,” said Chris Williamson, chief economist at survey compiler Markit. Markit’s flash composite PMI , regarded as a good growth indicator, jumped to 53.7 this month from February’s 53, which was the lowest reading since the start of 2015.

Car Trouble
Over 6,000 luxury cars made by German auto giant BMW will be recalled in China due to a fuel pump problem that could cause engine failure while driving, a China’s quality watchdog said. About 6,109 vehicles of BMW’s imported mini series will be recalled from April 8. The recall was due to a fuel pump problem that could cause engine failure while driving, the General Administration of Quality Supervision, Inspection and Quarantine said in a statement. The vehicles were produced between 12 June and 19 November, state-run news agency Xinhua reported.

Cheap Money
Bank of Japan board member Yukitoshi Funo said the central bank will proceed with ultra-loose monetary policy via aggressive asset purchases and low interest rates. “The BOJ is ready to steadily promote monetary easing using all three policy tools of quantity, quality (of asset buying), as well as interest rates,” Funo said. He also warned that sluggish emerging market demand and volatile markets may hurt exports and capital expenditure.

Hard Talk
Nobel prize winner Paul Krugman urged Japanese Prime Minister Shinzo Abe to abandon plans to raise the nation’s consumption tax next year and instead expand fiscal stimulus to revive the economy. “Japan still has not achieved escape velocity in breaking out of the deflationary cycle,” Krugman said. “I would call for another round of fiscal stimulus.” Krugman joins fellow economic laureate Joseph Stiglitz, who last week also recommended against the government going ahead with a plan to increase the nation’s sale tax in April next year.

Shifting Gear
Alibaba, China’s largest e-commerce company, is preparing to unveil its first Internet-connected smart car in April. Alibaba CTO Wang Jian said, Internet character is one of the car’s technological innovations. Details of the SUV will be unveiled at a launch event in April. This is an energy-saving car whose battery will retain 80 per cent of its storage capacity after running 160,000 km. cyber heist: Bangladesh’s central bank has hired a US lawyer for a potential lawsuit against the Federal Reserve Bank of New York after hackers stole $81 million from its account with the NY Fed. After the report surfaced in the Bangladesh capital of Dhaka, US Representative Carolyn Maloney called for a probe of last month’s cyber attack on Bangladesh Bank. In one of the largest cyber heists in history, the hackers ordered the New York Fed to transfer $81 million from Bangladesh central bank funds to accounts in the Philippines.