If you like to drive like your hair’s on fire, deciding between the athletic American 2008 Chevrolet Corvette hardtop coupe and the Bavarian corner carver 2008 BMW 335i is a bit like choosing between cocaine and cocaine. If you’re a more sensible motorist, it’s like choosing between A.H. Hirsch 16 Year Old Reserve Pot Stilled Sour Mash Straight Bourbon Whiskey and Schloss Rüdesheim VSOP brandy. in either case, the question is a matter of taste and price. Hence this test: which performance car offers the better buzz for $40k?

A few months ago, I asked TTAC’s Best and Brightest if I should drive my Mustang in the snow. After very little soul-searching, and very much viewing of Mustangs, Supras, Bimmers and Porsches doing snow donuts on YouTube, the decision practically made itself. So, I had the car anti-rusted and bought a set of Kingstar W411 winters (made by Hankook) on black wheels and off I went, with no extra junk in the trunk (hey – it might ruin the steering). I’ve driven it almost daily; it’s faced Montreal’s harsh winter with gusto. Even during the heaviest storm of the year to date, I had no problem getting around. Obviously, I’m delicate on the throttle and I pay attention to the brakes, lest I lock up the wheels and transform my little pony into a giant, lead sled. One caveat though – freezing rain. One day where we received all manner of precipitation (rain, then freezing rain, then snow) the car got stuck in a parking space in a street the city of Montreal had characteristically forgotten to clear. A little back-and-forth pushin’ and rockin’ while a good samaritan floored the gas and she was soon free, but I almost missed a dinner date. Lesson learned for next time: Bring a shovel and carry traction-aids.

When the clock strikes 12 tonight and the year ends, Americans will most likely have bought 13.1m light vehicles. That according to Erich Merkle of Crowe Horwath LLP, the man everybody seems to turn to when it comes to counting units.

Next year will be much worse.

The first quarter of 2009 will be an atrocity. “Merkle expects that the industry’s seasonally adjusted annual rate will be 10.5 million units, an abysmal rate that would match that of the fourth quarter of 2008,” says Automotive News (sub.)

By summer, Merkle sees the recession coming to its end. “His forecast: an annual sales rate of 11 million units in the first half, and 13.5 million to 14 million units in the second,” says Automotive News. For the coming year, Merkle reckons 12.8m units will sold in the U.S.

Detroit thinks, Merkle is an optimist.
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For the last time this year, a short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Until Jan 4, 2009, WAS will be filed from Tokyo.

Toyota has the biggest: Bruises and all, Toyota still stands proud. ToMoCo still has “the highest market capitalization among firms listed on the first section of the Tokyo Stock Exchange as of the last trading day of 2008, even though its market value tumbled by more than half in the year,” reports a relieved Nikkei (sub.) The automaker’s market cap is 10.01 trillion yen ($111,110,999,987.77 at today’s rate,) down 54 percent from the end of 2007. The overall market, as measured by the Nikkei Stock Average closed at 8,859 on Tuesday, down 42 percent from a year earlier. GM, Ford, and Chrysler on the other hand – don’t even mention it.

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Oregon’s governor Ted Kulongoski is currently getting some flack in our comments section over his pay-per-mile road tax scheme. But this is not the only green-oriented plan Kulongoski is floating, having already confirmed that Nissan will provide EVs for the state fleet in 2010. Another controversial transportation proposal of Kulongoski’s is to replace the $1,500 hybrid tax credit with a $5k credit towards the purchase of an all-electric car. If this plan does go into effect, it will make your Tesla Roadster (or Nissan Better Place-mobile) a little more affordable, just be prepared to have your doors blown off by a Datsun 1200 when you hit the road. Check out Oregon Field Guide’s visit with White Zombie, the zero-emissions ass kicker you never saw coming.

Automotive News [sub] reports that, thanks to you the taxpayer, GM is offering 0 percent financing through Monday, Jan. 5, on the discontinued Chevrolet TrailBlazer, GMC Envoy and Saab 9-7X, 9-3 and 9-5. “We’ve been trying to hold onto market share with one arm tied behind our back,” says GM Marketing individual Mark LaNeve. “Any tool they can get to make credit available and put deals together is a good thing.” Especially when taxpayers pick up the bill. But Mr LaNeve, what do you say to critics who argue that artificially low rates and subprime lending is what got this country and your firm into trouble in the first place?  “Six hundred twenty (FICO) is not a subprime score,” argues LaNeve. “That’s a very creditworthy buyer. Hopefully, we’ll have access to more of the market that is out there.” Meanwhile, Saab dealers aren’t exactly thrilling over the decision. “We need product, and we need a clear decision made” on Saab’s future, one Saab dealer tells AN. Either “we’re going to continue to be a part of General Motors’ family, or we have a buyer lined up, and here’s the buyer.” And though that decision doesn’t seem to be immediately forthcoming, at least everyone can pretend like it’s the nineties for another week. Trailblazer at zero percent interest? If that doesn’t get the nostalgia flowing, I don’t know what will.

Shortly after receiving its second bailout of the month (first Chrysler, then GMAC), Cerberus Capital Management announced that it is limiting investor redemptions. Finalternatives reports that Cerberus recently notified investors that gate provisions on its Cerberus Partners hedge fund were triggered after clients sought to withdraw more than 16.5% of the fund’s assets. Investors will be allowed to withdraw one-fifth of their year-end redemptions, and Cerberus is magnanimously waiving 60 percent of its incentive fee for one year after it recoups losses. Cerberus lost over 18 percent in October and November alone, and its Chrysler investment is likely a total loss. “This is a very hard decision for us, and the realization that taking these steps is now necessary is deeply disappointing,” says Cerberus top dog Stephen Feinberg.

So opens a guest commentary by Ira Lacher in today’s Des Moines Register. And if you believe the Detroit line, you might assume this voice from the middle American heartland would answer in the affirmative. You’d be wrong. Lacher describes his impression of American cars as being “designed and put together by committee – a bunch of parts cobbled together. The steering wheel felt as if it were just sticking out of the dashboard. The gas and brake pedals seemed mere appendages to the floor. The seats were uncomfortable frames covered with cheap cloth. This wasn’t a car; it was a homemade personal computer! By contrast, every rented Honda, Toyota, Mazda and Nissan seemed like a machine that functioned like one machine.” But when he recently purchased a Hyundai, Lacher clearly felt at least a few pangs of guilt.

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From the “there but for the grace of god go I” file comes the story of one GMAC debtor who can’t catch a break from the company that is catching breaks left and right. The New York Daily News profiles the plight of Chastity Strawder, an unemployed schoolteacher who is falling behind on lease payments for her Pontiac G6. Having leased two G6s (after all the usual credit checks), Strawder developed health problems and lost her job. Now falling behind on lease payments, Strawder is being treated to a series of angry phone calls from GMAC who want their freaking money, man. And Strawder seems to believe that since she and GMAC are in the same boat (“can’t make ends meet”), they might treat her with the same generosity that she (as a taxpayer) is showing them. Apparently not. $6b of public funding or not, GMAC is still in it for GMAC. Or is that Cerberus? Either way, the moral of the story is that bailouts won’t weaken the world’s most powerful force: compound interest.

Automotive News [sub] reports that GM is claiming to have 10k pre-orders for its neo-pony car. Too bad they might not arrive on time. Still, that’s about 5k commitments per year of relentless hype. Not too shabby.

When Toyota told the world that it didn’t want to see any of its American competitors go bankrupt, they meant it. And not purely out of fear of an anti-import backlash either. Toyota’s North American operations rely on many of the same suppliers as Detroit, and if GM were to go bankrupt, many of those suppliers could go under. This is especially dangerous for Toyota with its “just-in-time” production techniques, which is why contingency planning is underway at Toyota City to keep ToMoCo’s supply chain independently solvent. But as Bloomberg reports, that very contingency planning could eliminate the efficiency gains of the Toyota system, once dubbed “The Machine That Changed The World.” The lean, “just-in-time” system was developed on the model of American supermarkets, with components arriving as they are needed for the production process, rather than being mass-produced and stored until needed. Emergency planning includes possibly building up component inventories, which strikes at the heart of the “just-in-time” system’s competitive advantage. Still, a supplier bankruptcy would wreak even more havoc, holding up production lines until more parts arrive. The Japanese automakers have recently learned firsthand of the cost of supply disruption, especially among specialized (tier two and three) component makers. Last July, piston-ring maker Riken’s shut-down due to earthquake damaged forced eight of Japan’s 12 carmakers to temporarily suspend or cut manufacturing, leading to a total output reduction of at least 120,000 vehicles.

Oregon governor Ted Kulongoski’s recently released transportation plan brags of creating jobs to build roads and bridges. But its main focus: making sure those roads won’t be used. The plan talks about “congestion,” “bottlenecks,” “greenhouse gas,” “carbon,” “green standards,” “non highway programs” and “incentive programs designed to reduce the number of cars on our roads.” To realize this vision, Kulongski and his supporters have to reinvent the wheel, or, more precisely, the tax on those wheels.

As the video proves beyond the shadow of a doubt, parallel parking is a cinch. For those who nonetheless feel challenged by the maneuver, and view it as scarier than crossing the 38^th parallel, Ford has a cure: Ford plans to offer two Lincoln models in 2009 that can park themselves, Marketwatch reports. Parallel parking will get as boring as pushing a button. The miracles will be on display at the Detroit Auto Show. The parallel parking robot will be an option on the Lincoln MKS sedan and MKT CUV for the 2009 model year. For the TTAC B&B, this news is a yawner, as automatic parallel parking attendants were introduced by Toyota in their Prius as far back as 2004, followed by Lexus, BMW, the VW Touran, and possibly others.

When the news came across the e-transom last night that Cerberus’ chairman John Snow’s pals at the U.S. Treasury had decided to “invest” $5b in GMAC, my blog was filled with words like “bat shit crazy” and “disgusted.” After the shock wore off, I edited the post to remove my angry jibes and let the nonsensical nature of the move speak for itself. And respect the views of those who feel that pissing away $6b (an extra $1b for GM) is in the national interest, free market principles be damned. And anyway, I figured this is only the tip of the insanity iceberg. It didn’t take long to get a look below the waterline. Marketwatch (can someone lend their logo a sweater?) reports that the plucked-from-bankruptcy lender is lowering its lending criteria, from a FICO score of 700 to 621. “The actions of the federal government to support GMAC are having an immediate and meaningful effect on our ability to provide credit to automotive customers,” said President Bill Muir in a statement. “We will continue to employ responsible credit standards, but will be able to relax the constraints we put in place a few months ago due to the credit crisis.” Need I say more? Oh, one thing: we still don’t know whether or not GMAC met its debt-for-equity target. I wonder why…