DETROIT: Volkswagen launched an all-new Jetta compact car, its biggest seller in America, at the Detroit Auto Show on Sunday as it looks to revive sales in the world’s second-largest auto market and move on from the emissions scandal that has tarnished its reputation over the past few years.
The world’s largest automaker is still grappling with investigations and lawsuits around the world related to revelations that it cheated government emissions tests for diesel-powered vehicles and has already paid $30 billion (SR112.5 billion) in fines and costs for the fraud.
But there are signs the German carmaker is repairing the damage with consumers. Volkswagen brand sales worldwide rose to a record 6.23 million cars in 2017, with demand in the United States growing for the first time since 2013, VW said late on Sunday.
“Some of our critics thought the diesel crisis would block our view. Instead we have, undeterred by the crisis or rather fired by it, developed our digitization and electrification strategy,” Audi CEO Rupert Stadler, a member of VW’s executive board, told reporters on December 11.
In the US, VW brand sales rose 5.2 percent in 2017, even as US consumers turned away from smaller cars that are still the brand’s mainstay.
“We are really starting to see the efforts of our work reflected in our sales,” Hinrich Woebcken, the new head of the Volkswagen brand in North America, said on Sunday at the Detroit auto show.
Spurred by a perception that the authoritarian culture at VW had been a factor in the cheating, top management has also loosened the reins on the VW empire and decentralized power from its Wolfsburg, Germany headquarters.
For example, German native Woebcken told reporters on the sidelines of the Los Angeles auto show in November that US managers concluded that the original name for an SUV the company planned to launch in America would not work.
The original name “started with a T, and then it broke your tongue,” Woebcken said.
US Volkswagen executives proposed a simpler name for the US market — Atlas. Wolfsburg management went along. The Atlas, launched from VW’s Tennessee factory last year, accounted for nearly 8 percent of VW brand sales in the US last year.
“It’s unusual to give a regional name to a product,” Woebcken said. “In terms of VW, it is a pretty big thing.”
VW brand CEO Herbert Diess agreed.
“We have given the regions much more responsibility and we are improving operations,” he said, adding the new Jetta would be $100 cheaper than the outgoing model even though it offers additional driver-assistance functions and LED lights as standard.
VW Group CEO Matthias Mueller will stay away from the Detroit auto show next week to let the carmaker’s US leaders present the redesigned Jetta, which represented a third of the brand’s 340,000 US sales in 2017.
With a lowered roofline and a new 8-speed automatic transmission, the model is tailored to US design and fuel-economy needs and drew more input from North American engineers than its predecessor, the sources said ahead of the launch.
VW’s historical underperformance in the US was a problem for the company long before “dieselgate” and the failure by top managers to tap the SUV boom and other market trends in 2014 caused labor boss Bernd Osterloh to denounce VW’s US business as a “catastrophe.”
VW now hopes to reshape its image, in part by persuading environmentally conscious, younger consumers and regulators in its major markets that it is serious about electric vehicles (EVs). VW has raised its planned spending on EVs, self-driving technology and digital mobility businesses across the group to €34 billion 2022.
Volkswagen is now betting that a new modular platform dubbed MEB, designed to underpin more than 20 purely battery-powered brand models, will allow it to turn profits on EVs when they launch from 2019, in part because they share parts with other cars built from MEB.
Woebcken said in Los Angeles that VW was working on a decision about where to build future EVs for the United States, including a new VW Microbus promised for 2022.
VW has been teasing US consumers with Microbus concepts for years, trying to rekindle the warm feelings for the vehicle synonymous with the free-wheeling 1960s.
“We did not have a clue how to get it industrialized,” Woebcken said. “Now, we have, with the MEB platform. It’s decided. It’s industrialized. It will come.”
Volkswagen on US comeback trail after emissions scandal with all-new Jetta
Volkswagen on US comeback trail after emissions scandal with all-new Jetta
Gulf shares rise as Iran-Israel ceasefire holds
- Saudi Arabia’s benchmark stock index extended its gains to a fourth straight session, rising 0.2%
- Abu Dhabi benchmark index rose 0.4%
LONDON: Stock markets in the Gulf rose in early trade on Thursday, extending gains from the previous sessions amid rising oil prices as a ceasefire between Israel and Iran appeared to be holding.
US President Donald Trump hailed the swift end to the air war between Iran and Israel and said Washington would likely seek a commitment from Tehran to end its nuclear ambitions at talks with Iranian officials next week.
Saudi Arabia’s benchmark stock index extended its gains to a fourth straight session, rising 0.2 percent, with most sectors in the green. Oil major Saudi Aramco added 0.3 percent and Red Sea International climbed 3 percent.
Modular house manufacturer Red Sea said on Wednesday it planned to float its mechanical, electrical and plumbing subsidiary on the Saudi market.
Oil prices, a catalyst for the Gulf’s financial markets, were up 0.2 percent as a larger-than-expected draw in US crude stocks signalled firm demand. Brent crude was trading at $67.83 a barrel by 10:05 a.m. Saudi time.
The Abu Dhabi benchmark index rose 0.4 percent, aided by a 5.3 percent advance in RAK Properties and a 0.6 percent gain in Borouge.
Petrochemical company Borouge said on Wednesday it would collaborate with Honeywell on a project to deliver the petrochemical industry’s first AI-driven control room.
Dubai’s benchmark stock index was up for a fifth straight session, advancing 0.6 percent, pushed up by the materials, industry and finance sectors.
Tolls operator Salik gained 1.8 percent and Emirates NBD, the emirate’s largest lender, added 0.6 percent.
The Qatari benchmark index was marginally up, propped up by gains in the materials, utilities and communications sectors.
Vodafone Qatar advanced 1.2 percent while Qatar National Bank, the region’s largest lender, shed 0.3 percent.
Qatar Investment Authority and Canadian asset manager Fiera Capital have launched a $200 million fund to boost foreign and local investment into the Gulf state’s stock market, QIA said on Wednesday.
Health, military spending lift Saudi ICT contracts to $10bn
- Military sector received SR5.16 billion across 1,125 contracts
- Infrastructure and transport saw investments totaling SR5.26 billion
RIYADH: Saudi Arabia’s health, military, and infrastructure sectors led an 18.75 percent rise in government information and communications technology contracts in 2024, reaching SR38 billion ($10.13 billion), official data showed.
According to the Government Spending Report 2024, published by the Digital Government Authority, the value of contracts climbed from SR32 billion in 2023, with the health and social development sector receiving SR6.54 billion through 1,085 contracts.
The report said that 2024 spending priorities focused on artificial intelligence, emerging technologies, and cloud computing, positioning these areas as central to enhancing operational performance across public sector entities.
The government’s sustained push to bolster digital services underscores Riyadh’s growing investment in digital infrastructure, part of its Vision 2030 strategy to diversify the economy and modernize public services.
The report added that activating national framework agreements significantly contributed to these outcomes, enabling improved negotiation capabilities and more effective financial planning.
“These tools have enabled government entities to obtain goods and services more quickly, efficiently, and at lower cost,” the report said.
“They also highlight the added value achieved by enhancing supply chains and improving the quality of procurement, which in turn raises the efficiency of government entities in managing expenditures in contracts and agreements,” it also said.
Among other sectors, the military received SR5.16 billion across 1,125 contracts, while infrastructure and transport saw investments totaling SR5.26 billion. The education sector was allocated SR4.37 billion, followed by economic resources at SR3.42 billion, and public administration at SR2.39 billion.
There was a 157 percent increase in purchase orders through national framework agreements, amounting to SR4.47 billion through 9,457 orders. The report said these tools helped accelerate service delivery and improve procurement quality.
Government agencies achieved an estimated SR1 billion in savings during 2024 by improving spending efficiency and optimizing procurement and budgeting practices.
Saudi Arabia also continued to demonstrate global leadership in digital government performance. It ranked sixth globally and first regionally in the 2024 UN E-Government Development Index, climbing 25 places from 2022.
It also topped the Government Electronic and Mobile Services Maturity Index for the third consecutive year, achieving a score of 96 percent.
According to the report, and based on data from global research firm Gartner, Saudi Arabia led all countries in government ICT spending as a share of total ICT expenditure in 2024, reaching 34.1 percent.
Oil Updates — crude steady as investors watch Iran-Israel ceasefire, demand signals
- Market focus switching to fundamentals, analysts say
- Data shows US ‘driving season is in full swing’, ANZ says
LONDON: Oil prices were steady on Thursday after erasing earlier gains as investors remained cautious about the Iran-Israel ceasefire while also shifting focus to market fundamentals.
Brent crude futures fell 6 cents, or 0.09 percent, to $67.62 a barrel by 12:45 p.m. Saudi time. US West Texas Intermediate crude fell 2 cents, or 0.03 percent, to $64.90 a barrel.
Both benchmarks climbed nearly 1 percent on Wednesday, recovering from early-week losses after data showed resilient US demand.
Investors will shift their focus back to macroeconomics and oil balances while also watching the Israel-Iran truce, said PVM analyst Tamas Varga.
Oil prices likely followed equity markets lower this morning, UBS analyst Giovanni Staunovo said.
“US government data showed the US driving season is in full swing after a slow start,” ANZ analysts said in a note.
US crude oil and fuel inventories fell in the week to June 20 as refining activity and demand rose, the Energy Information Administration said on Wednesday.
Crude inventories fell by 5.8 million barrels, the EIA said, exceeding analysts’ expectations in a Reuters poll for a 797,000-barrel draw.
Gasoline stocks unexpectedly fell by 2.1 million barrels, compared with forecasts for a 381,000-barrel build as gasoline supplied, a proxy for demand, rose to its highest level since December 2021.
On Saturday, Igor Sechin, the head of Russia’s largest oil producer Rosneft, said OPEC+, which groups together the Organization of the Petroleum Exporting Countries and allies including Russia, could bring forward its output hikes by around a year from an initial plan.
Meanwhile, US President Donald Trump hailed the swift end to war between Iran and Israel and said Washington would likely seek a commitment from Tehran to end its nuclear ambitions at talks with Iranian officials next week.
Trump also said on Wednesday that the US has not given up its maximum pressure on Iran — including restrictions on sales of Iranian oil — but signalled a potential easing in enforcement to help the country rebuild.
IMF approves $834m resilience support package for Jordan
RIYADH: The International Monetary Fund has approved a $834 million support package for Jordan’s economy which includes a $700 million loan and a $134 million disbursement from a previously agreed fund.
The institution’s executive board has completed the third review of Jordan’s Extended Fund Facility, allowing for an immediate distribution of the $134 million, according to a press release. This brings total disbursements so far under the four-year, $1.3 billion program, approved in January 2024, to $595 million.
Additionally, the new 30-month Resilience and Sustainability Facility arrangement will grant Jordan access to $700 million to address structural challenges in the water and electricity sectors and strengthen preparedness for public health emergencies, including future pandemics.
Jordan’s economy has faced mounting pressures in recent years, intensified by regional instability, including the ongoing war in Gaza and the prolonged hosting of large numbers of refugees from neighboring conflicts. These challenges have strained public finances, increased unemployment, and disrupted trade and tourism, key sectors for the Jordanian economy.
The IMF and World Bank have stepped up their support, backing reforms aimed at stabilizing finances and spurring growth under Jordan’s Economic Modernization Vision.
Kenji Okamura, IMF deputy managing director, praised Jordan’s “steadfast pursuit of sound policies” and urged continued reforms to boost private investment and job creation.
“Monetary policy remains appropriately focused on safeguarding monetary and financial stability and supporting the exchange rate peg that has served Jordan well and helped keeping inflation low,” the deputy managing director said.
Okamura observed that Jordan’s banking sector remains robust, with the central bank bolstering risk analysis, oversight, and crisis response.
The IMF emphasized the need to boost revenue, streamline spending, and implement contingency measures to reduce public debt while safeguarding key social and capital expenditures. It also stressed improving public utilities’ efficiency and viability to ensure fiscal sustainability and better service delivery.
“The authorities continue to make progress with a gradual fiscal consolidation and strengthening fiscal sustainability, thanks to fiscal reforms that have improved revenue administration and expenditure efficiency,” the organization said.
Economic resilience amid regional challenges
Despite external pressures from regional conflicts and global uncertainty, Jordan’s economy has shown steady growth, reaching 2.5 percent in 2024, with inflation remaining low, according to the IMF.
The Central Bank of Jordan has maintained strong foreign reserves of over $20 billion and a stable exchange rate peg.
The Extended Fund Facility program has supported fiscal reforms, helping Jordan reduce public debt while protecting social spending. The new Resilience and Sustainability Facility loan will focus on improving energy and water sector sustainability, strengthening financial resilience, and enhancing pandemic preparedness.
In February, the IMF commended Jordan for effectively managing economic headwinds from the Gaza war through prudent fiscal measures, though the institution did revise down the country’s 2024 growth forecast to 2.6 percent due to regional spillovers.
In April, the World Bank bolstered Jordan’s economic development efforts with $1.1 billion in new financing to expand social protections and drive private-sector growth, targeting the country’s 22.3 percent unemployment rate and 117 percent debt-to-gross domestic product ratio.
Both institutions emphasized the need to sustain reforms to address structural challenges exacerbated by refugee inflows, the pandemic, and regional conflicts.
Closing Bell: Saudi benchmark index edges higher to close at 10,974
- MSCI Tadawul 30 Index rose 0.06% to 1,407.47
- Parallel market Nomu lost 0.05% to close at 26,837.30
RIYADH: Saudi Arabia’s main stock index closed slightly higher on Wednesday, as gains in select industrial and infrastructure stocks offset broader market weakness.
The Tadawul All Share Index added 9.7 points, or 0.09 percent, finishing the session at 10,973.98. Total trading turnover was SR6.10 billion ($1.62 billion), with 180 stocks advancing while 66 declined.
The MSCI Tadawul 30 Index also recorded a modest gain, rising 0.06 percent to 1,407.47.
In contrast, the parallel market Nomu dipped slightly, losing 13.49 points, or 0.05 percent, to close at 26,837.30. A total of 35 stocks posted gains on Nomu, while 45 ended in the red.
Sustained Infrastructure Holding Co. led the market with a sharp 9.89 percent increase to SR30.55, followed by Saudi Printing and Packaging Co., which rose 9.83 percent to SR11.84. Saudi Arabia Refineries Co. also saw strong momentum, climbing 5.48 percent to a new yearly high of SR63.50.
Among the session’s notable losers, Specialized Medical Co. dropped 3.36 percent to SR24.16, Zamil Industrial Investment Co. slipped 2.29 percent to SR40.60, and Arabian Contracting Services Co. fell 2.12 percent to SR96.90.
Meanwhile, Saudi Arabian Mining Co., known as Ma’aden, received shareholder approval to raise its capital from SR38.03 billion to SR38.89 billion during its extraordinary general assembly meeting held on June 24. The 2.26 percent increase will lift the number of issued ordinary shares from 3.80 billion to 3.89 billion.
According to a company disclosure on the Saudi Exchange, the capital hike will be carried out through the issuance of 85.98 million new ordinary shares at a par value of SR10. These shares will be allocated as part of an acquisition agreement to purchase full ownership of two subsidiaries: Ma’aden Bauxite and Alumina Co. and Ma’aden Aluminium Co.
Under the transaction, Ma’aden will acquire all 128.01 million shares held by AWA Saudi in the bauxite firm, representing 25.1 percent of its capital, along with 165 million shares held by Alcoa Saudi in the aluminum unit—also a 25.1 percent stake.
Shares of Ma’aden rose 0.2 percent to end the day at SR50.70.
Red Sea International Co. also announced plans to publicly list its subsidiary, Fundamental Installation for Electric Work Co. Ltd., subject to regulatory and shareholder approval. The decision was approved by the board in a resolution passed on June 23 and implemented the following day.
While Red Sea International will not offer any of its own shares in the IPO, the move is considered a significant transaction due to the subsidiary’s strategic role in the group’s operations. The company’s stock rose 0.12 percent to close at SR42.50.
