DETROIT: Fiat Chrysler Automobiles on Sunday said it will invest $1 billion to modernize two plants in the US Midwest and create 2,000 jobs, upping the ante as automakers respond to threats from President-elect Donald Trump to slap new taxes on imported vehicles.
FCA’s announcement that it would retool factories in Ohio and Michigan to build new Jeep sport utility vehicles, including a pickup truck, and potentially move production of a Ram heavy-duty pickup truck to Michigan from Mexico, also highlighted the auto industry’s keen interest in getting relief from tough fuel economy rules enacted by the outgoing Obama administration.
General Motors Co. Chief Executive Mary Barra on Sunday said tax reform and “streamlining regulations ... are just two areas that would be extremely beneficial” for Trump to address. Trump has criticized GM for building cars in Mexico while laying off workers in the US.
Barra, who is on an advisory committee to Trump, told reporters that decisions about where to build specific vehicles are made “two, three four years ago.” Overall, she said of Trump, “we have much more in common than we have different.”
Barra had a conversation with Trump on Tuesday, a person briefed on the call told Reuters. Barra declined to discuss her conversations with Trump.
Many automakers plan to use the annual North American International Auto show in Detroit, which started on Saturday, to tout investments in the US and a commitment to US employment against the backdrop of Trump’s criticism of automakers for shipping vehicles into the US from Mexico.
Daimler AG Chief Executive Dieter Zetsche on Sunday said during an auto show event that the German automaker plans to invest another $1.3 billion to expand sport utility vehicle (SUV) production at a factory in Alabama.
Automakers are girding for rounds of questions about Mexican investments and US jobs in the wake of Trump’s harsh criticism of automakers.
Most of the major automakers in the US have substantial vehicle making operations in Mexico, as well as complex networks of parts makers that supply their factories in the US and support jobs and investment in states such as Ohio and Michigan.
FCA’s investment decisions were not related to Trump’s recent attacks Ford Motor Co, GM and Toyota Motor Corp. for building cars for the US market in Mexico, people familiar with company’s moves said on Sunday.
The company had already signaled plans to expand truck and SUV production at its US plants, and discontinued production of small and medium-sized cars in two US factories.
FCA executives did not confer with Trump before making the decision on the new big SUVs and a Jeep pickup truck, according to a person familiar with the company’s thinking.
The same source said FCA CEO Sergio Marchionne wanted to get out the news about adding jobs and investment in the US in case the company encounters more criticism from Trump.
Still, Fiat Chrysler’s announcement landed as global auto industry executives gathered for the annual auto show in a climate of growing uncertainty about the trade and regulatory policies the new Republican administration will pursue.
Trump, who will be inaugurated on Jan. 20, has talked about rolling back environmental regulations, and supporting corporate tax cuts — moves automakers would welcome.
He has just as explicitly warned that he will move to raise the costs of importing vehicles from Mexico, a policy industry executives said could hurt their businesses.
Since Trump’s election, automakers and other companies have played up their investments in the US.
Last week, Ford scrapped plans to build a $1.6 billion plant in Mexico and invest $700 million in a factory in Michigan. Ford will still move production of Focus small cars to Mexico, but will instead cut total production of the cars by consolidating their assembly in an existing Mexican plant.
Hinrich Woebcken, chief executive of the North America Region for German automaker Volkswagen AG, told Reuters on Sunday the automaker plans to invest $7 billion in the US between 2015 and 2019 and will start building its new Atlas SUV in Tennessee later this year.
Volkswagen has had a plant in Mexico for 50 years and it is not shifting any jobs to Mexico from the US.
“We do not make our investment decisions based on administrative cycles. Our business is really an 8-, 12-, 14-year horizon when we look at investments,” Woebcken said on the sidelines of the Detroit auto show.
FCA said a plant in Warren, Michigan, near Detroit, would make the Jeep Wagoneer and Jeep Grand Wagoneer SUVs, while a Toledo, Ohio, factory would produce the Jeep pickup.
The company said the production plans in Ohio and Michigan were “subject to the negotiation and final approval of incentives by state and local entities.”
US consumers have increasingly shifted toward SUVs and pickup trucks and away from sedans in recent years, as gasoline prices have remained relatively low.
A year ago, Marchionne said FCA would cease production of two sedans and focus on SUVs and pickups.
Marchionne said in a statement on Sunday that the lineup changes were due to that consumer shift.
“We continue to reinforce the US as a global manufacturing hub” for SUVs and pickup trucks, he added.
Fiat Chrysler ups the ante as automakers respond to Trump
Fiat Chrysler ups the ante as automakers respond to Trump
Saudi Arabia’s demand for apartments pushes new mortgages over $16bn
RIYADH: Banks in Saudi Arabia granted SR60.92 billion ($16.24 billion) in residential mortgages in the first nine months of 2024, an annual rise of 4.88 percent.
The data was released by the Saudi Central Bank, also known as SAMA, and it showed the bulk of the loans — constituting 64 percent or SR38.85 billion — was allocated for house purchases.
This segment did witness a 3.38 percent dip year on year, with its proportion of total loans shrinking from the 69 percent seen during the same period of 2023.
Demand for apartments surged, capturing 31 percent of total mortgages, up from 25 percent a year ago, as this category of lending reached SR18.6 billion.
This shift represents a 26.8 percent growth, underscoring the increasing preference for apartment ownership amid urbanization and demographic changes.
Additionally, loans for land purchases showed a promising trajectory, achieving an annual growth rate of 8.26 percent and amounting to SR3.5 billion, which signals a sustained interest in land investment across the Kingdom.
The rise in new residential bank loans across Saudi Arabia is being driven by a blend of population growth, evolving mortgage policies, and increasing interest in apartment living.
According to a recent report from online real estate platform Sakan, the Kingdom’s population surged by four million over the past five years, with demand for housing climbing in response.
While this trend fuels the broader housing market, apartments have become a prominent focus, reflecting changing demographics and affordability needs.
The growth of the expatriate population, which expanded from 9.9 million in 2010 to 13.4 million in 2022 and now makes up over 40 percent of the population, also adds pressure on the rental market, particularly in major cities.
The government’s push for greater home ownership through buyer-friendly mortgage policies is helping fuel this apartment demand.
Favorable mortgage options and the recent introduction of the Premium Residency Visa, often dubbed the “Saudi Green Card,” allow foreign investors to enter the market with purchases over SR4 million, fostering interest in upscale residential investments.
Additionally, the value proposition of apartments is clear, as with SR1 million, buyers can access apartment sizes that vary by city — for instance, around 131 sq. meters in North Riyadh to a more spacious 333 sq. meters in Dammam, according to the report.
Saudi Arabia’s liberalized foreign ownership policies and affordable mortgage terms further boost demand, particularly for apartments in desirable areas.
The high rental yields offered by apartments in Saudi Arabia also attract investors, with two- and three-bedroom apartments in Riyadh delivering yields of 9 to 10 percent, and even higher returns in Jeddah, where a two-bedroom unit yields 11.7 percent.
These returns are notably higher than apartment yields in neighboring Gulf cities, where they average between 5 to 6 percent in Dubai, Abu Dhabi, and Doha.
High rental yields not only make apartments attractive as long-term investments but also help offset rising property costs, driving both end-users and investors to favor this category in a market characterized by shifting residential preferences.
According to the report, the surge is also driven by the rapid evolution of real estate technology.
Platforms like Sakan are reshaping the real estate landscape by enhancing transparency, streamlining property transactions, and providing data-driven insights for buyers and investors alike.
Leveraging local knowledge and international expertise, these platforms are supporting the sector’s growth by simplifying access to property listings, improving market transparency, and facilitating faster transaction times.
As property technology continues to integrate into the Saudi market, it is poised to play a pivotal role in sustaining the momentum of residential lending and meeting the needs of a tech-savvy, expanding population.
Saudi Arabia’s official reserves reach $457bn, up 4%
RIYADH: Saudi Arabia’s official reserve assets reached SR1.71 trillion ($456.97 billion) in September, marking a 4 percent increase year-on-year, according to new data.
Figures released by the Saudi Central Bank, known as SAMA, show these holdings include monetary gold, special drawing rights, the International Monetary Fund’s reserve position, and foreign reserves.
The latter, comprising currency and deposits abroad as well as investments in foreign securities, made up 94.5 percent of the total, amounting to SR1.62 trillion in September. This category grew 4.11 percent during this period.
September data indicated that special drawing rights rose to SR79.86 billion, marking a 4.18 percent increase and reaching the highest level in two and a half years. SDRs now account for 4.66 percent of Saudi Arabia’s total reserves.
Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound sterling. They can be exchanged among governments for freely usable currencies when needed.
SDRs provide additional liquidity, stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability.
The IMF reserve position totaled around SR12.64 billion, but decreased by 11.45 percent during this period. This category represents the amount a country can draw from the IMF without conditions.
Saudi Arabia’s official reserves have been a fundamental pillar of the nation’s economic stability and are closely tied to its strategic investments in foreign securities.
The Kingdom’s reserves include an extensive portfolio of foreign assets, diversified across currencies and geographies, ensuring the country has a robust financial buffer against global economic uncertainties.
This prudent reserve management has helped Saudi Arabia maintain a resilient fiscal position and a strong credit rating, affirmed at “A/A-1” by S&P Global, which recently upgraded the Kingdom’s outlook to positive due to its sustained reform momentum.
In alignment with Vision 2030, Saudi Arabia has adopted an expansionary fiscal policy to support transformative projects aimed at reducing its economic dependence on oil.
This ambitious agenda has led to budget deficits and prompted the country to tap into debt markets to finance key infrastructure and social initiatives.
Despite the uptick in debt, the Kingdom remains fiscally well-positioned, with ample reserves and substantial net assets, projected to stay above 40 percent of GDP through 2027 according to S&P Global.
This buffer underscores Saudi Arabia’s capacity to absorb potential economic shocks while continuing to pursue its development goals.
The nation’s significant reserve base not only underpins its economic stability but also provides the flexibility to recalibrate spending on large infrastructure projects as needed, maintaining a balance between growth and fiscal discipline.
This strategy is essential as Saudi Arabia seeks to nurture its non-oil sectors, supported by the Public Investment Fund and other governmental entities.
The PIF’s role in fostering a diversified economy is central to Vision 2030’s objectives, from investment in renewable energy to technology and healthcare, creating a more resilient and diversified economic base.
With the positive outlook and strategic focus on sustainable growth, Saudi Arabia’s economic reforms are expected to drive strong non-oil growth over the medium term, further cementing the Kingdom’s fiscal stability and enhancing investor confidence in its long-term economic vision.
COP29: Clean energy a catalyst for stability, recovery in conflict zones
- Environmental solutions reduce dependence on imports
- Micro-grids support conflict-ridden communities
BAKU: As COP29 progresses in Baku, attention is turning to the ways in which clean energy can transform post-conflict recovery efforts, bringing both environmental resilience and social stability to regions affected by war.
This year’s discussions have highlighted how renewable energy offers more than environmental benefits, having the potential to catalyze economic recovery, improve living standards and build long-term resilience in areas most vulnerable to conflict.
Renewable energy in conflict recovery: A new dimension of aid
Experts have highlighted how sustainable infrastructure can reduce dependence on foreign energy imports and fuel local economies in war-torn areas.
Hafed Al-Ghwell, a North African geopolitics expert, said in an interview with Arab News that “clean energy isn’t just about generating power; it’s about autonomy and resilience.” For regions dependent on volatile foreign fuel supplies, renewables offer a more stable power source that strengthens local autonomy.
Gilles Carbonnier, vice president of the International Committee of the Red Cross, highlighted the critical role of renewable energy in supporting communities severely affected by both conflict and climate change.
“The people who are most affected by climate change risks are those who live in zones of armed conflict and have the least capability to adapt and face these risks,” Carbonnier said.
He described how the ICRC is using solar power to help protect communities from droughts, floods and extreme weather across the Sahel, the Horn of Africa and the Middle East.
“What we need is to scale these efforts, which means directing much more climate funding to conflict zones,” Carbonnier added.
This local approach provides immediate aid while laying the foundation for sustainable recovery in areas struggling with limited resources and infrastructure damage.
Gaza: The intersection of war and environmental crisis
The war and occupation in Gaza represents a severe environmental and humanitarian crisis.
Crown Prince Hussein of Jordan addressed COP29. In calling for global solidarity with Gaza, he said: “Saving our planet must start from the premise that all lives are worth saving.” He described how the war is “compounding environmental challenges for Gaza and beyond.”
A recent UN Environment Program report highlighted severe contamination of Gaza’s land, water and air due to the destruction of critical infrastructure, including sewage and waste systems, leaving communities surrounded by hazardous debris.
Carbonnier said that Gaza is emblematic of the dual crisis faced by many conflict zones, where war intensifies environmental damage and deepens humanitarian challenges.
“In Gaza, conflict has degraded critical infrastructure to the point where basic resources like clean water and electricity are scarce,” he said.
“Renewable energy solutions, such as solar micro-grids, could offer essential relief by providing stable power to hospitals, schools and homes,” he added.
In Gaza, solar micro-grids deployed by NGOs are already providing essential power for hospitals and emergency shelters, offering a sustainable alternative to fuel imports which have been blockaded by Israeli forces since the conflict began.
Resilience through clean energy infrastructure
Renewable energy infrastructure, particularly solar and wind power, is highly adaptable to conflict and post-conflict settings due to its low maintenance requirements and modular design.
Solar panels and wind turbines require minimal upkeep and their modular nature allows for incremental infrastructure development as security improves.
This approach has proved effective in Syria, where solar-powered micro-grids are supplying power to refugee camps, providing consistent electricity for vital services like sanitation and healthcare.
According to Carbonnier, these micro-grids “reduce dependence on often costly and dangerous fuel deliveries and stabilize power supplies for communities under stress.”
Renewable energy micro-grids are now recognized as a cornerstone of humanitarian aid, offering stability to populations affected by protracted crises.
Policy implications and international support
For renewable energy to become a reliable tool in post-conflict recovery, coordinated international support and robust policy frameworks are essential.
Azerbaijan’s lead COP29 negotiator, Yalchin Rafiyev, highlighted the need for financial support specifically directed at conflict zones. “Bridging the gaps between climate finance and peace-building efforts can unlock substantial benefits for communities emerging from conflict,” Rafiyev said.
Rumen Radev, president of Bulgaria, highlighted the link between climate resilience and global stability, telling Arab News: “Extreme meteorological events threaten not just people and economies, but also the security and stability of the world.”
His remarks highlight the importance of COP29’s goals in fostering peace through enhanced climate resilience.
Oil Updates – crude heads for weekly loss as Chinese demand continues to underperform
SINGAPORE: Oil prices fell on Friday on signs demand in China, the world’s biggest crude importer, continues to underperform amid its uneven economic recovery.
Brent crude futures were down 65 cents, or 0.9 percent, at $71.91 a barrel by 7:50 a.m. Saudi time. US West Texas Intermediate crude futures were down 62 cents, or 0.9 percent, at $68.08.
For the week, Brent is set to fall 2.7 percent while WTI is set to decline 3.3 percent.
“While oil prices have somewhat stabilized around the $71.00 level of support this week, the lack of a concrete bullish catalyst suggests that price recovery remains tepid for now,” Yeap Jun Rong, market strategist at IG, said in an email.
The prospect of higher supplies from the US and OPEC+ along with doubts over China’s economic recovery continue to be of concern, while the odds of a December rate cut are now “closer to a coin flip” under a less dovish Federal Reserve, Yeap added.
China’s oil refiners in October processed 4.6 percent less crude than a year earlier, falling year-on-year for a seventh month, amid the closures of some plants and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday.
The decline in run rates occurred as China’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating even though consumer spending increased, government data showed.
Oil prices also fell this week as major forecasters indicated market fundamentals remained bearish.
The International Energy Agency forecast global oil supply will exceed demand in 2025 even if cuts remain in place from OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, as rising production from the US and other outside producers outpaces sluggish demand.
The Paris-based agency raised its 2024 demand growth forecast by 60,000 barrels per day to 920,000 bpd, and left its 2025 oil demand growth forecast little changed at 990,000 bpd.
OPEC this week cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions, marking the producer group’s fourth-consecutive downward revision to its 2024 outlook.
US crude inventories last week rose by 2.1 million barrels, the Energy Information Administration said on Thursday, much more than analysts’ expectations for a 750,000-barrel rise.
Gasoline stocks fell by 4.4 million barrels last week to the lowest since November 2022, the EIA said, compared with analysts’ expectations in a Reuters poll for a 600,000-barrel build.
Distillate stockpiles, which include diesel and heating oil, also fell unexpectedly by 1.4 million barrels, the data showed.
Fortune Global Forum to be held in Riyadh in 2025
RIYADH: American football legend Tom Brady tossed a football to Saudi Arabia's General Secretariat of Council of Ministers Fahd bin Abdulmohsan Al-Rasheed who announced that the 2025 Fortune Global Forum will be held in Riyadh.
The elite of the world's business leaders will converge on Riyadh next year as the Fortune Global Forum makes its inaugural appearance at the Saudi capital.
Al-Rasheed joked that if he fumbled the ball, it was Brady's fault and if he caught it he is “a great player.”
With an epic football toss from @TomBrady, His Excellency Fahd bin Abdulmohsan Al-Rasheed announces the 2025 #FortuneGlobalForum will be held in Riyadh, Saudi Arabia.
— FORTUNE (@FortuneMagazine) November 12, 2024
Next year, we'll gather leaders of the world’s biggest multinational companies to talk about the dynamic… pic.twitter.com/Nrabd1LWrG
The event, organized by Fortune magazine, is attended by presidents, chairmen and CEOs, as well as prestigious economists.
Fahd bin Abdulmohsan Al-Rasheed, chairman of the Saudi Convention and Exhibitions General Authority, said for the past 30 years the forum had brought together “the titans of industry around the world to the forefront of economic development.”
Speaking at this year’s forum, which concluded in New York on Tuesday, he added: “And that forefront today is the Kingdom of Saudi Arabia.”
He urged delegates to visit the Kingdom’s business epicenter to see what it had to offer.
