Automotive and business brief

Snapshot

• VW weighs putting its China-developed electronic architecture, built with XPeng, into about three-quarters of next-generation VW, Škoda and Cupra models in Europe
• VW Group names NXP’s S32K5 microcontroller as the common core of the zonal controllers in its future software-defined architecture; first vehicle in 2027
• Chinese brands outsell Japanese brands in Europe for the first full quarter: 12.7% share against 11.9% in Q3, and a record 14.5% in September

Top Developments

1. VW weighs putting its China-developed electronic architecture, built with XPeng, into about three-quarters of next-generation VW, Škoda and Cupra models in Europe

   Manager Magazin reported on 26 Oct, and Reuters confirmed via a person familiar, that VW brand chief Thomas Schäfer will propose using the ‘China Electronic Architecture’ (CEA), co-developed with XPeng, for the core brands’ European volume models instead of the Rivian-based architecture. Schäfer’s team puts the saving at €4–5bn; models cited include the ID. Golf, ID. Passat and Škoda Enyaq.…

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   Sources: Reuters via Euronext (26 Oct) · Manager Magazin (26 Oct, DE) · CnEVPost (27 Oct) · derStandard / Reuters (26 Oct, DE)

2. VW Group names NXP’s S32K5 microcontroller as the common core of the zonal controllers in its future software-defined architecture; first vehicle in 2027

   VW Group and NXP announced the partnership on 26 Oct at VW’s suppliers fair (IZB) in Wolfsburg. The S32K5 will be the core processor in the zonal controllers of the architecture developed by Rivian and VW’s joint venture RV Tech, handling lighting, body, comfort, chassis and safety functions across all brands and segments. VW says this consolidates functions that previously needed separate chips and ECUs, and that it is building direct long-term relationships with chipmakers for supply resilience.

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   Sources: Volkswagen Group press release (26 Oct) · NXP investor release (26 Oct) · dpa via Yahoo Finance (26 Oct)

3. Chinese brands outsell Japanese brands in Europe for the first full quarter: 12.7% share against 11.9% in Q3, and a record 14.5% in September

   Bloomberg, citing Dataforce, reported on 26 Oct that registrations of Chinese brands in Europe roughly doubled year on year in Q3, led by hybrids, giving them 12.7% of the market against 11.9% for Japanese makers including Toyota. September share jumped almost three points from August to 14.5%. Five years ago Chinese brands had about 1%. Chery’s Jaecoo 7 was the UK’s best-selling model in September.…

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   Sources: Bloomberg (26 Oct) · Taipei Times / Bloomberg (27 Oct) · The Herald Business (27 Oct) · Autoline Daily (26 Oct)

4. Tata’s Iveco takeover clears its threshold: 87.8% of shares tendered, giving Tata 89.4% net of treasury shares at €14.40 a share

   Provisional results published on 26 Oct show 238.2m shares tendered, worth about €3.43bn. The threshold, lowered to 80% after Iveco’s 16 Oct EGM approved the back-end merger resolution, is met. Final results are due by 07:29 CET on 29 Oct, payment on 30 Oct, and the offer reopens from 2 to 6 Nov, with payment for those shares on 13 Nov.

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   Sources: Offeror press release, GlobeNewswire (26 Oct) · Tata Motors exchange filing (27 Oct) · CNBC TV18 · Moneycontrol

5. Porsche’s nine-month operating margin recovers to 6.9% as deliveries fall 16%; Q3 cash flow carried a €200m US-tariff charge, and 2026 guidance is unchanged

   Porsche reported on 27 Oct nine-month revenue of €25.28bn (down 5.9%) and operating profit of €1.74bn, a 6.9% return on sales after 0.2% a year earlier, when realignment costs were €2.7bn (about €0.5bn this year). Deliveries fell 16% to 178,532. Automotive net cash flow rose to €2.5bn, mainly from the sale of its Bugatti Rimac and Rimac Group stakes; Q3 cash flow absorbed €100–200m of realignment costs, €250m of pension funding and €200m of US tariffs.…

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   Sources: Porsche AG press release (27 Oct) · Investing.com (27 Oct) · Dow Jones preview via MarketScreener (27 Oct, DE)

6. BMW closes its German voluntary-severance programme early after demand beat expectations; about 5,000 staff reportedly applied toward roughly 8,000 cuts by end-2027

   Handelsblatt and AFP reported on 22 Oct that BMW stopped taking applications for its voluntary-leaver scheme, open to about 40,000 non-production staff in Germany, because the target had been reached earlier than planned. Reports put interest at about 5,000; BMW did not give a final number. The wider plan removes about 8,000 jobs worldwide by end-2027, more than half in Germany, mostly outside direct production.

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   Sources: Handelsblatt (22 Oct, DE) · Boursorama / AFP (22 Oct, FR) · Világgazdaság (Oct, HU)

7. Aios: 97% of IG Metall members at the insolvent Mercedes supplier vote for an indefinite strike in Überherrn; whether it is called depends on management’s insolvency steps

   The ballot result came out on 26 Oct. IG Metall Völklingen said it would decide on a strike call depending on how management proceeds in the insolvency, which was filed last week. The union wants jobs kept and talks on a social plan, and says there are enough profitable production contracts for the coming years. Aios makes parts for several Mercedes luxury models; about 200 people work in Überherrn and close to 300 across its sites.

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   Sources: tagesschau / SR (26 Oct, DE) · SR.de (26 Oct, DE) · saarnews (26 Oct, DE)

8. US and Canada work on a deal to ease Section 232 steel and auto tariffs, possibly before the 3 Nov midterms; Chery says Canada is worth a factory even without US access

   Reuters reported on 26 Oct, citing sources, that Washington and Ottawa are negotiating relief from Section 232 tariffs of up to 50% on Canadian steel and 25% on vehicles, led on the US side by Commerce Secretary Howard Lutnick. A deal could come before the 3 Nov elections but is expected to be narrow, and the US wants further concessions.…

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   Sources: Reuters via Investing.com (26 Oct) · Reuters via Air Freight News (26 Oct) · CnEVPost / Bloomberg, Chery (23 Oct) · Financial Post, Chery

9. Toyota plans to sell its next-generation engines and hybrid systems to other carmakers, targeting about $1.7bn a year by 2032 from about $550m this year

   Automotive News reported on 26 Oct that Toyota expects external sales of engines and hybrid systems to grow from more than $550m in 2026 to nearly $1.7bn by 2032. New compact 1.5-litre and 2.0-litre four-cylinder engines designed for hybrids and plug-in hybrids arrive from 2027. Toyota did not name buyers; it has close ties with Subaru, Mazda, Suzuki and Daihatsu. Mazda and Subaru are reported to have their own plans.

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   Sources: Automotive News (26 Oct) · Autoline Daily (26 Oct)

10. Japan’s auto union federation signals a higher 2027 pay target that goes beyond matching inflation

    The president of the Confederation of Japan Automobile Workers’ Unions (JAW) told Reuters on 26 Oct that the group is discussing a higher target for the 2027 spring wage talks than in previous years, linking pay to productivity and the value of work rather than only offsetting inflation, as Japanese carmakers compete with China. No figure has been set yet; for 2026 the group sought at least ¥12,000 a month in base pay.

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    Sources: Reuters via Investing.com (26 Oct) · Reuters Japan via d menu (26 Oct, JP)

11. VW halts spending on its India EV programme until a partnership with JSW is agreed

    Bloomberg reported (via Just Auto, 26 Oct) that VW has frozen capital spending on its Indian EV programme, although design work for an entry-level electric platform developed for China (CMP 21) is complete. Funds stay on hold until a commercial structure with JSW Group is agreed; VW and JSW confirmed last month they are studying a joint project covering combustion, electric and hybrid cars for India and export. The group is pursuing a 15% cut in overall investment.

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    Sources: Just Auto / Bloomberg (26 Oct)

12. Copper bounces back to $14,500/t cash from the 22 Oct five-week low, with cash trading about $170 above three-month metal

    LME copper cash settlement was $14,500/t on 26 Oct and three-month $14,332, up from $14,215 and $14,096 on 22 Oct. The roughly $168 premium of cash over three-month metal points to tight nearby supply even though LME stocks are near 273,000 t, up from about 225,000 t in mid-October.

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    Sources: Westmetall LME copper series · LME copper page

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Market data: TradingView, Yahoo Finance (delayed). Not investment advice.