If there's anyone left who still thinks hybrid cars are just a fad, you need to rethink: the Prius was one of America's best-selling vehicles in 2007. That's vehicles, not just hybrids. Toyota sold 181,221 of the gas-electric hatchbacks. That's more than the entire Acura or Mercury lineups, and the model was nipping on all of Buick's heels. The Prius also outsold the Chevrolet Tahoe, the Toyota Tacoma, the Honda Odyssey, every Jeep, every Chrysler, every Dodge (except Ram) and every Ford but the F-series. No wonder Maximum Bob is trying to jump onto the hybrid bandwagon so fast, after pooh-poohing hybrids for so long. Only problem is that train left the station a long time ago, GM and Co. will have to run mighty fast to catch it.

Looking at last year’s Black Friday ads made it clear that a portable GPS (Global Positioning Satellite) satellite navigation device was the season’s most popular loss leader. Even department stores like Macys were offering a GPS device on the cheap. This strategy continues; last week our local Walgreen’s had a Nextar GPS device at the front counter for under $200, right there next to mints and quit smoking gum. I wanted to see if a cheap GPS unit could compete with the big boys. So I contacted Nextar, and they provided us with a Snap3. 

First the good news. AFP reports that GM's joint venture Chinese sales rose 18.5 percent in 2007, clocking-in at 1.03m vehicles. That's 548,945 units with SAIC-GM-Wuling and 479,427 vehicles through GM-SAIC. In a written statement, GM China Group President and Managing Director Kevin Wale rang-in the glad tidings. "Despite growing competition across the board, demand remained robust for our established products such as the Buick Excelle and LaCrosse and the Chevrolet Lova," Wale said. According to the statement, GM snagged the title of sales leader in the PRC– amongst global automakers– for the third straight year. Yes, well, Dow Jones Market Watch puts a different spin on the story. DJ restricts the stats to '07 passenger cars, and says Volkswagen's Chinese production outstripped GM's by 431,064; putting VW's increase at 28 percent. It also points out that GM's 18.7 percent rise represents slowing growth, when compared to the previous year's 26.8 percent gain, or the overall market's 20.7 percent expansion. Bloomberg fingered the usual reason: product. "GM's expansion in the world's second-largest auto market slowed as customers opted for Volkswagen's Skoda Octavia and the Ford Focus over the Buick Excelle." As China's domestic automakers break free from their foreign "partners," the boom times may soon be at an end. 

Think your morning rush-hour commute sucks? Consider the New York Times' description of someone learning to drive in New Delhi:

Amid a cacophony of horns, a blood-red sport utility vehicle weaved between cars, passing Mr. Sharma within a razor's edge on the right. A school bus snuggled close up on his left. No one seemed to care about traffic lanes. Cars bounced in and out of crater-size potholes… Sharing the road with him were a bicyclist with three cooking-gas cylinders strapped to the back of his bike, a pushcart vendor plying guavas, a cycle rickshaw loaded with a photocopy machine (rickshaws often being the preferred mode of delivery for modern appliances)… At one point, a car careered down the wrong side of the road… At least this morning there was no elephant chewing bamboo in the fast lane, as there sometimes is.

As ultra-cheap vehicles allow more and more Indians– many of whom have never driven a car– to take to the road, traffic experts expect the situation to get much worse. And with a driving test that consists of turning on the ignition and driving in a wide circle, you gotta believe they're right.

VW marketed the Beetle to baby boomers bent on blinging their Bug (or whatever they called it back in the day). MINI and Scion found considerable success with the same concept, aimed at Gen Y. Now Tata Motors want to encourage whatever generation is next (Z? Back to A?) personalize the cheapest car in the world. On the freshly-launched Nano's freshly-launched web site, you can play with your Tata and add all kinds of dress-up gear (sorry, no bra available yet). Want racing stripes, fancy wheels or custom seat covers (sorry, no sacred cow spot patterns available)? They're just a mouse click away. Tata doesn't 't say what all this personalization will cost, but it can't be that much. I mean, who's gonna buy a disposable car then double its price with accessories? The bad part: no matter what colors or toys you add to the Nano, it still looks like a bloated Isetta. And it's probably just about as safe– though a LOT safer than four people on a moped.

When Fortune magazine asked Ford CEO Alan Mulally about his employer's health, he “ignored the industry convention of talking up future models as a source of improved profitability.” Instead, Big Al focused on how much money the automaker has in the bank. That Ford obtained said cash by borrowing it makes his claim more than a bit disingenuous. As a general rule, healthy automakers rely on selling cars and trucks to generate operating cash. Yet Mulally reckons a bird in hand is better than one in the bush— no matter how you captured it. When a reporter from the Detroit Free Press asked Mulally if he’s willing to draw “a line in the sand” to prevent further sales losses, the Ford CEO was adamant: “Absolutely not.” Translation: Ford is ready to play “How low can you go?” Before contrasting Ford’s woes with the relative success of Audi, the article raises a salient question regarding Ford’s strategy. “If you work at Ford, what kind of incentive is it to be told that the company is trying to reach the bottom but doesn't know where the bottom is?” A psychologist would say you must experience the depths of despair to enjoy the highs of ecstacy. Is this also true for a corporation?

Buzz Hargrove is on a roll. After saber-rattling with Alan Mulally over the impending Big 2.9 – Canadian Auto Workers (CAW) negotiations, after chastising the federal government for offering a paltry $1b to Canada's ailing manufacturing sector, the Globe and Mail tells us the CAW kingpin is asking the Canadian government for $30m to revive Ford's currently shuttered engine plant in Windsor, Ontario. This sum would be on top of $30m currently promised by Ontario's provincial government. If you think Buzz is pulling this figure out of his ass, he isn't. As he notes, "If there's an opportunity to get a $1-billion investment around the world, the standard is that governments put in 20 per cent of that." What standard? Who knows? The old plant was the manufacturing center for Ford's long-running Windsor V8 engine series, which have seen duty in everything from the Mustang to the AC Cobra. Ford, on the other hand, is keen to develop and build its new upcoming V8 at its Essex plant (also in Windsor).

CAW big kahuna Buzz Hargrove is back in the news, but his target isn't the one you'd expect. Taking a break from shooting arrows across the Ambassador Bridge into Detroit, Buzz has rejected the $1b manufacturing subsidy announced by Canada's government. Globeinvestor.com reports the the feds are offering the aid to help a manufacturing sector reeling in the wake of the Canadian dollar's stratospheric ascent. BUT the aid package limits Ontario's portion to "only" $350m, as The Gov't also intends to help other ailing industries such as forestry and pulp & paper. And Buzz ain't happy with his slice of the potential pie. "They have to recognize these are extraordinary times and require extraordinary measures," declares Mr. Hargrove. "There are many states in the United States that are willing to do almost anything to get a new engine plant. If we don't get out ahead of the pack, we could very well lose an opportunity." The saddest part in all of this, though, is that Buzz is right. Split amongst The Big 3, which have combined debts in the hundreds of billions, a scant $350m subsidy ain't gonna cut it.

Volvo is finally coming to grips with the fact that the brand doesn’t stretch much beyond wagons. Reflecting this new/old reality, rumors abound that Volvo’s about to axe their range-topping S80 sedan in favor of an upmarket V100 wagon. Add in a recent Consumer Reports’ study showing that American consumers still rate Volvo number one for safety, and you begin to understand the importance of the new V70 wagon. As wagons are what keeps Volvo’s ost on their smorgasbord, “getting it right” was essential. So, did they?

A $25,000 Aveo? Not quite, but BusinessWeek (BW) says GM is considering building what they're calling the "micro-premium car," aimed at the MINI, BMW 1-series and Audi A3 market. They have two problems to overcome before they enter that brave new world. First, they have to find a suitable platform, something a bit more upscale than the Daewoo-engineered hardware now used for their smallest cars. Second, they have to figure out where it fits in their muddled marketing model. Cadillac is out. "Sources" told BW they want to "preserve the brand's image for big, high-powered cars." So where do the BLS and the even smaller Alpha-platform model planned for 2011 fit into that image? Anyway, Chevy's not a contender because no one would pay that much for a small Chevy. They're reportedly considering Buick, Saab or Saturn. And what do they think the chances are of anyone buying such a vehicle from a GM dealer? BW states, "GM has discovered that Gen Y's buyers don't hold a grudge against domestic brands the way Generation X and some baby boomers do… if it can make a small car that is both fuel-efficient and has real cachet, they could make inroads with a generation that is fast growing into its car-buying years." That's a pretty lofty goal; now let's see if they can overcome a long and ignoble history of botched small-car projects.

As you'd expect, Texas is America's largest market for full-sized pickup trucks. While pickup truck sales fell 14 percent nationally over the past four years, Bloomberg reports that they rose 5.2 percent in the Lone Star State. GM, Ford and Dodge aren't exactly celebrating, though. In 2007, Toyota's piece of that pie grew 79 percent, while the so-called domestics' slice dropped by five percent. Even worse, Dallas Ford dealer Sam Pack says a lot of those Tundra sales are conquest sales, "coming from traditionally Ford, Chevrolet and Dodge" buyers. While the raw numbers still favor The Big 2.8, Tundra's share of the Texas market rose from 4.7 to 8.4 percent last year. To git 'er done, Toyota put $6.4k worth of incentives on the hood, putting the Texas-built Tundra in the middle of the pack (Ford $6.6k, Chrysler $6.47k and GM $6k). As the pickup truck market shrinks even more in 2008, you can bet Toyota will continue its slow but steady incursion into the domestics' last redoubt. And watch those profit margins shrink.

Back around the time Chrysler was liberated from its German overlords, the automaker declared that it would make a $3b investment in launching new engines, complete with a fuel-efficient, dual-clutch transmission by Getrag. As we reported yesterday, the plan is now in limbo, as Getrag has stopped construction of a new facility designed to build 700k Chrysler-bound transmissions. Meanwhile, the Globe and Mail reports that New Process Gear– formerly owned by Chrysler, currently owned by Magna International– is laying off 1,650 workers at its suburban Syracuse, N.Y. transmissions parts factory. The newspaper tells the story as a union deal: "Magna has told the union it cannot afford to keep the factory open with its current cost structure and it plans to close the plant." But it's also likely that Chrysler is pulling back on ALL its transmissions suppliers to meet falling demand. Lest we forget, pre-sale, Chrysler was slated to sell Chery a complete assembly line for building automatic transmissions. So, is Chrysler's "Powertrain Initiative" dead, moribund, outsourced or some combo thereof?

The Big 2.8 – United Auto Workers (UAW) negotiations came and went with a couple of day's strike here, a couple of hour's strike there. Motown now turns its attention to Southern Ontario, where all three domestic automakers will be entering negotiations with the Canadian Autoworkers' Union (CAW). Fresh off the unionization of the Canadian auto-parts giant Magna, CAW boss Buzz Hargrove has warned Ford, GM and Chrysler not to seek the same wage, benefit, security and job classification concessions given by the UAW. Last December, Buzz declared "If they want to have a fight with us and they table those issues, there will be a fight." The Globe and Mail reports that Ford's CEO has fired his first shot in the mounting war of words. "The most important conversation we're having in Canada is about competitiveness," Alan Mulally declared. It's a thinly-veiled warning that, given lower-cost options in the U.S. due to good labor deals and the recent appreciation of the Canadian dollar, Canada risks pricing itself out of the auto manufacturing game. Will Buzz really go to the mat? Watch this space.

TTAC's Samir Syed has already discussed the revolutionary nature of Tata's new Nano. Just-auto [sub] reports that Automotive News Europe [sub] is reporting that Tata Motors is looking to spread the love. At the new car's launch, Tata Motors' group chairman Ratan Tata said his company will export their "people's car" into the Eurozone. Eventually. Tata will restrict Nano sales to India for the first two years– or more– before starting exports. To Africa, Latin America and southeast Asia. After that, they'll shoehorn in some bigger engines (the base Nano has a 33hp 624cc two-cylinder powerplant) and add some more "advanced features." Hang on. Can the new "people's car" meet strict European emissions and safety regulations? "When we go to Europe, we will conform to all existing regulations," insisted Girish Wagh, head of the 500-member Nano product development team. Responding to a question, he added" "Yes, I said when."

Inside INdiana News reports that autoparts supplier Getrag has suspended construction of a $530m DSG  (dual sequential gearbox) transmission plant in Tipton County. Starting in 2009, the factory was set to produce 700k transmissions per year and employ some 1400 people. Indiana was in deep too; the Indiana Economic Development Corporation stumped-up $8.75m worth of performance-based tax credits and offered up to $500k for training grants. The state was on the hook for $3.4m for local road improvements. Getrag Human Resource Director Randy Cyman told the News that the plant is on hold "indefinitely" while Chrysler and Getrag work out a supply agreement. "He says the two parties are meeting daily to try to iron out some unspecified issues. Cyman says he does not believe the project is in jeopardy. He says both parties realize the value of the new state-of-the-art transmission plant." Let's assume that Getrag had a clear contract with Chrysler before starting to build the factory. So, did Chrysler try to squeeze Getrag's profit margins and Getrag balked? Is Chrysler trying to walk away from an expensive project? TTAC is investigating…