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Russia revives Soviet-era Moskvich brand with Chinese model By Reuters

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© Reuters. FILE PHOTO: A Roly Poly Nevalyashka doll is seen inside a car during a gathering of Soviet-era Moskvich cars owners and enthusiasts in Moscow, Russia May 21, 2022. The sign reads: “Made in USSR”. REUTERS/Shamil Zhumatov/File Photo

By Gleb Stolyarov and Alexander Marrow

MOSCOW (Reuters) -After a two-decade hiatus, Russia on Wednesday launched production of the Moskvich car brand at a plant near Moscow given up by the French carmaker Renault (EPA:), with a new, modern Chinese design that barely resembles the Soviet-era classic.

While the last Moskvich (“Muscovite”) was a basic three-box saloon or pedestrian hatchback, the Moskvich 3 is a muscular-looking petrol-powered crossover hatchback with alloy wheels, LED slit-headlights and a large central touchscreen display.

In fact, the car looks identical to the Sehol X4 compact crossover made by China’s JAC, also known as the JAC JS4.

Sources told Reuters that JAC’s design, engineering and platform were being used, with parts being delivered from China, and the vehicles shown at the launch displayed numerous JAC stickers bearing part codes.

However, Maxim Klyushkin, the plant’s project manager, declined to confirm that the Chinese firm was Moskvich’s partner.

“We have (Russian truck maker) Kamaz as an external partner and we have a long-distance partner we are working with,” he said. “We are not naming that partner.”

Klyushkin said the car would have an anti-lock braking system (ABS), one of the features that Russia’s Avtovaz has been forced to remove from Lada models because of the Western trade sanctions imposed in response to Moscow’s military campaign in Ukraine.

Renault sold its majority stake in Avtovaz in May to the Russian state for reportedly just one rouble, but with a six-year option to buy it back. It sold its plant, now renamed the Moscow Automobile Factory Moskvich, for another rouble.

FALLING CAR SALES

With just 600 vehicles slated for production this year, the new car is unlikely to alter the gloomy outlook for the wider industry, whose annual sales could end the year below 1 million for the first time in Russia’s modern history.

The government’s ultimate target of producing 100,000 Moskvich vehicles a year, some of which will be electric, is far below the industry average for a car plant of 200,000-300,000. Tesla (NASDAQ:) makes 22,000 cars a week at its Shanghai plant.

“The first Moskvich cars will come off the production line in December 2022,” Kamaz said in a statement.

Western sanctions over Moscow’s military campaign in Ukraine have not only hampered access to foreign-made components but also helped to drive out foreign manufacturers.

Kamaz and the government have established new supply chains, but not disclosed details.

“The task for the near future is to establish small-node assembly processes with the involvement of local suppliers by the end of 2023,” Industry and Trade Minister Denis Manturov said in a statement.

The ministry said the launch of full-scale production would provide jobs for around 40,000 more people. The car goes on sale in Russia next month, it added, although the price has yet to be disclosed. President Vladimir Putin last week urged carmakers to keep prices down.

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Larry Summers Says Fed Will Need to Boost Rates More Than Markets Expect

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(Bloomberg) — Former Treasury Secretary Lawrence Summers warned that the Federal Reserve will probably need to raise interest rates more than markets are currently expecting, thanks to stubbornly high inflationary pressures.

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“We have a long way to go to get inflation down” to the Fed’s target, Summers told Bloomberg Television’s “Wall Street Week” with David Westin. As for Fed policymakers, “I suspect they’re going to need more increases in interest rates than the market is now judging or than they’re now saying.”

Interest-rate futures suggest traders expect the Fed to raise rates to about 5% by May 2023, compared with the current target range of 3.75% to 4%. Economists expect a 50-basis point increase at the Dec. 13-14 policy meeting, when Fed officials are also scheduled to release fresh projections for the key rate.

“Six is certainly a scenario we can write,” Summers said with regard to the peak percentage rate for the Fed’s benchmark. “And that tells me that five is not a good best-guess.”

Summers was speaking hours after the latest US monthly jobs report showed an unexpected jump in average hourly earnings gains. He said those figures showcased continuing strong price pressures in the economy.

“For my money, the best single measure of core underlying inflation is to look at wages,” said Summers, a Harvard University professor and paid contributor to Bloomberg Television. “My sense is that inflation is going to be a little more sustained than what people are looking for.”

Read More: Job Market Is Too Tight for Fed Comfort as Labor Pool Shrinks

Average hourly earnings rose 0.6% in November in a broad-based gain that was the biggest since January, and were up 5.1% from a year earlier. Wages for production and nonsupervisory workers climbed 0.7% from the prior month, the most in almost a year.

While a number of US indicators have suggested limited impact so far from the Fed’s tightening campaign, Summers cautioned that change tends to occur suddenly.

“There are all these mechanisms that kick in,” he said. “At a certain point, consumers run out of their savings and then you have a Wile E. Coyote kind of moment,” he said in reference to the cartoon character that falls off a cliff.

In the housing market, there tends to be a sudden rush of sellers putting their properties on the market when prices start to drop, he said. And “at a certain point, you see credit drying up,” forcing repayment problems, he added.

“Once you get into a negative situation, there’s an avalanche aspect — and I think we have a real risk that that’s going to happen at some point” for the US economy, Summers said. “I don’t know when it’s going to come,” he said of a downturn. “But when it kicks in, I suspect it’ll be fairly forceful.”

Inflation Target

The former Treasury chief also warned that “this is going to be a relatively high-interest-rate recession, not like the low-interest-rate recessions we’ve seen in the past.”

Summers reiterated that he didn’t think the Fed ought to change its inflation target to, say, 3%, from the current 2% — in part because of potential credibility issues after having allowed inflation to surge so high the past two years.

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Prince William meets President Biden, awards climate prizes By Reuters

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© Reuters. Britain’s Prince William, Prince of Wales arrives at the John F. Kennedy Presidential Library, in Boston, Massachusetts, U.S., December 2, 2022. Charles Krupa/Pool via REUTERS

By Jeff Mason and Brian Snyder

BOSTON (Reuters) -Prince William greeted U.S. President Joe Biden at Boston’s waterfront on Friday, the final day of a visit by British royals trying to focus attention on tackling environmental issues.

William and his wife, Kate, attempted to keep the spotlight on climate and other causes they champion on their first overseas trip since taking on the titles of Prince and Princess of Wales after the death of Queen Elizabeth in September.

In the middle of their U.S. visit, however, Netflix Inc (NASDAQ:) released a trailer for an upcoming documentary series about William’s younger brother, Harry, and his American wife, Meghan, reviving talk about rifts in the royal family. Buckingham Palace also was dealing with a new racism controversy.

On Friday afternoon, William smiled as he met Biden outdoors in cold weather along Boston’s waterfront. The two men took a brief stroll before a private meeting at the John F. Kennedy Presidential Library and Museum.

The pair were expected to discuss “shared climate goals” and “prioritization of mental health issues,” White House spokeswoman Karine Jean-Pierre told reporters before the meeting.

Later on Friday, William and Kate honored winners of the Earthshot Prize, an award William established to recognize people working on solutions to problems caused by climate change.

“By supporting and scaling them, we can change our future,” William said on stage at the black-tie ceremony, which was attended by English soccer star David Beckham, James Bond actor Rami Malek and other celebrities.

Kate and William last visited the United States in 2014, when they were guests of then-President Barack Obama at the White House.

Their current trip came just days before Harry and Meghan looked set to steal the limelight at an awards ceremony in New York.

For many in the British media, Harry and Meghan have become the royal villains, turning their back on duty while using their royal status to forge out lucrative careers and earn millions, including from Netflix.

In contrast, William and Kate are usually portrayed in the British media as dutiful and earnest, reflecting the style of the late queen.

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Watch all of Friday’s big stock calls on CNBC

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