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VW, Suzuki mulling rekindling relationship in face of legal battle

Volkswagen and Suzuki have been undergoing marriage counseling in a bid to avoid finalizing their nasty divorce. The blissful union has been troubled for some time, with Volkswagen claiming that it could affect operational decisions at Suzuki, and the Japanese brand's sniping and constant flirting with a certain Italian temptress causing rifts.
The matter first went to court in 2012, when Suzuki demanded VW get out, and leave its 19.9-percent stake in the Japanese brand in a box to the left. Now, Automotive News is reporting that the company will give the relationship one last shot, according to closed-door dealings between the two in London.
Still, it's understood that VW and Suzuki recognize the benefit of their alliance, and that it'd be in the best interests of the kids both parties to make things work. Spokespeople declined to comment to AN, but the newsmagazine spoke with Frank Biller, an analyst for LBBW in Stuttgart, who said, "Both companies stand to benefit if they can overcome the disagreements over leadership claims."

GM outsold VW globaly in first quarter, Toyota reports numbers next week

General Motors released its first quarter sales figures this week, reporting that it sold 2.36 million cars and trucks worldwide. That figure represents an increase of 3.6 percent when compared to the same period last year. GM's growth was attributed to many factors, including global Cadillac sales that were up 26 percent and Chevrolet posting a one percent increase over last year (this marked Chevy's tenth straight year of record global sales).
Volkswagen came in just behind GM, as the German automaker reported global sales from January through March at 2.27 million vehicles, an increase of five percent when compared to last year. While that number was strong, VW is cautioning that markets outside China and the US, such as those in Europe, are becoming a challenge as economies falter.
Yet to report sales is Toyota, current holder of the global world sales crown (the Japanese company sold 9.75 million cars last year, against 9.29 million sold by GM and 9.1 million vehicles sold by VW). Even though GM and Toyota both say they don't care who sells the most units, it is unquestionably a strong bragging point and sales equate to revenue. That said, Toyota will report its first quarter numbers next week.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.