Words of wisdom spoken on the eve of the Shanghai Auto Show: “The longer the crisis lasts, the bigger the chance of failure or a scale-down of some American and European automakers.” Words of wisdom from Xu Liuping, Chairman of Chongqing Changan Auto Co. on the sidelines of a news conference. “And that has provided a chance for entry by Chinese manufacturers.” The Chairman politely omitted to add “for pennies on the dollar,” but why stress the obvious. And guess who the Chairman’s company is coveting? “Changan, Ford Motor’s China partner, is among several Chinese auto makers that have expressed interest in the Volvo car brand, which the Detroit automaker is seeking to sell in an effort to raise cash,” writes Reuters. “Asked about progress on a possible Volvo deal, Xu declined to comment, citing disclosure rules mandated by the Chinese securities regulator.” Changan? Doesn’t that ring a (wedding) bell?

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In November 2007, VeeDub head honcho Martin Winterkorn announced his version of the Schlieffen Plan. Dubbed “Strategie 2018,” Winterkorn plotted the overthrow of GM and Toyota from the top of the worldwide sales charts. Winterkorn called for VW to rule the world in sales, profits, innovation and customer satisfaction by 2018. When the plan was announced, the MSM feted it, insiders (this reporter included) rolled their eyes and denounced the announcement as the usual hubris of an incoming CEO, a suit who’d be busy collecting his pension by the time 2018 rolled around. In any case, by 2018, the Generalstabsplan would long be forgotten and superseded by at least five other grand strategies.

Isn’t it nice when you go to an opera and know exactly what will happen next? And so it happened again: SAIC denied a report that it is interested in buying GM’s Vauxhall and Opel brands, reiterating that it has no plans for foreign mergers and acquisitions, the Shanghai Securities Journal said via Gasgoo.

GM China—and by extension SAIC—had already said bu yao (don’t want) in reaction to media reports that GM would sell to its Chinese partner, SAIC, the Buick brand or the exclusive rights to use this brand in China.

What does it mean? Nothing.

Uh-oh. News of GM’s upcoming demise has reached China. On the Kübler-Ross grief chart, GM China’s emotional cycle has departed from denial, probably hit some (internalized) anger and is now in the bargaining phase. Depression, testing and acceptance will follow in due course.

GM China called a press conference and trotted out Kevin Wale, president of GM China Group himself. He put on a brave face: Even if General Motors meets the worse-case scenario—bankruptcy, its operations in China won’t be affected and will expand further as they have been making profits and have abundant funds and technologies, Wale bragged according to Gasgoo. Customers and dealers in China are rightly beginning to wonder how GM China will fare if the mothership gets torpedoed or broken up.
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“Shanghai car-maker SAIC makes approach for Vauxhall,” headlined London’s Telegraph over the weekend. Of course SAIC doesn’t want just the Vauxhall badge, they are interested in the whole Opel/Vauxhall enterprise. What looks like “Opel” through German eyes looks like “Vauxhall” to the British. It’s one and the same.

According to the Telegraph, “Shanghai-based SAIC has requested a sale document from General Motors (GM), the stricken US car-maker, which has warned that it may file for bankruptcy in an effort to ensure its survival. Commerzbank, the German banking group, is orchestrating the sale process on behalf of GM, which is to establish a new subsidiary comprising Vauxhall and Opel, the German car manufacturer. A new investor would be invited to acquire a controlling stake in the company, with GM potentially retaining a minority interest.”  Saab and Chevrolet Europe would not be part of the deal. More Chinese interests are lining up:
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Formerly proud Toyota is staring in the eyes of another multi-billion dollar loss for the new 2009 fiscal year, the Nikkei [sub] reports. The fiscal year lasts through March 2010. According to estimates, the world’s largest automaker will report a loss of around $5 billion for the 2008 fiscal that just ended on March 31. For the new year, the loss may be steeper.

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Ah, another wonderful rendition of the Beijing Opera. Always masterfully produced. Always with the same predictable outcome. A few days ago, Shanghai Security News said that China’s SAIC is interested in buying Buick. The scent was picked up by TTAC, and soon it was all over the net. Predictably, a few days later, when the world had turned to other news, GM China sent a nameless executive to the Guangzhou Daily and said it’s all bunk. General Motors selling Buick to its Chinese joint venture partner SAIC? No way Jose (or whatever the Mandarin equivalent may be.) Cross my heart and swear to die, here is the truth, and nothing but, honestly. . .

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The United Kingdom always had been a reluctant—and sometimes recalcitrant—member of the EU. Some of Her Majesty’s subjects still refuse to fully accept the EU’s existence. This may explain why our colleagues at Autocar.uk found it worthy to note that “the unexpectedly high take-up of the German government’s scrappage scheme has led to an unexpected side effect—a boost to new car sales in Poland. The combination of the fact that the German scheme doesn’t require the new cars to be purchased within Germany, and the weakness of the Polish zloty—which has fallen by around a third against the euro in the past year—has resulted in more than 10 per cent of new cars sold in Poland being bought by Germans.” And what’s wrong with that?
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GM had promised to have a decision by the end of March on whether it would sell or fold HUMMER. They missed that deadline along with other key targets set by the White House-appointed Presidential Task Force on Automobiles (PTFOA). Not that there wasn’t interest in the aptly named pornography-on-wheels. GM simply, well, blew it.

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“It was a mere footnote in the German government’s latest €50b fiscal stimulus;” writes the Financial Times about Germany’s Abwrackprämie (a.k.a. “cash for clunkers”). The footnote turned into an epic win. BUT—“a scrapping bonus aimed at encouraging new car purchases has become such a success that it has left Berlin facing up to three times the measure’s initial €1.5b price tag.” The FT was lowballing. Today, Germany’s government allocated €5b for Abwrackprämie, the sequel, reports Automobilwoche [sub]. That’s enough money for two million old cars crushed and two million new cars bought. If that’s the way the deal goes down, Germany will have the biggest car sales year in recorded history. Germany’s annual pre-Abwrackprämien sales stood at 3 million. Next year, it might be less, because Berlin made it clear that there will be no more new money after that. In the meantime, Berlin is being waterboarded by Abwrackprämien applications.

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According to Reuters, GM “is in intense and earnest preparations for a possible bankruptcy filing.” Meanwhile, GM’s joint venture partner in China, SAIC, is making preparations of its own. They might just buy Buick before it goes to hell in the GM hand basket. The matter has received added urgency by a note from Moody’s Investor Service that the agency reckons there’s a 70 percent risk of bankruptcy for Detroit’s three automakers given the difficulty of restructuring out of court.

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Ragtop lovers, get out your rags and cry. German maker Karmann, famous for its Karmann Ghia and later for many ragtop versions produced for makers such as Audi, Ford, Mercedes, Porsche, Renault and VW, has declared insolvency, Automobilwoche [sub] reports. The company still has 3470 employees.

Karmann’s last big job was the Audi A4 Cabrio. After that was insourced back to Ingolstadt, Karmann could not find another large account to keep them busy.

China’s automobile sales should hit an all-time high in March and help the country to beat the US in automobile sales during the first quarter, a key official from the national planning body said to Gasgoo.

“The 14 major automakers sold 1.026 million vehicles in China last month, which account for 90 to 91 percent of the total market,” said Chen Bin, director general of the Department of Industry at the National Development and Reform Commission.

The total sales will likely overtake the monthly sales record of 1.059 million units in March 2008.

This will be the third consecutive month that China has sold more vehicles than the US. It also puts the Middle Kingdom well on its way to become the worldwide king of auto sales in 2009, toppling the US from its threadbare throne. It will also help Volkswagen in its race to the #2 spot behind Toyota. VW is underexposed in the US, but very strong in China.

While other companies, from the Michelin man to Fiat, Renault and Daihatsu, say bu hao (no good) to the Shanghai Auto Show in late April and stay at home, Chrysler is obstinate. They’ll be there, come hell or the PTFOA (Presidential Task Force on Automobiles). Chrysler has no plans to quit the Chinese market and it will join the upcoming Auto Shanghai 2009 late April despite the great pressure it is facing in the U.S., Gasgoo writes. Today’s distinguished BS medal with oak leaf cluster-NSFW goes to this fine example of Chinese chutzpa:

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Faced with ever dropping car sales and an aging population, Japan is turning up the money tap to solve both. According to Reuters, Japan is considering introducing subsidies of up to $3K for the purchases of gasoline/electricity hybrids and other low emission vehicles. If the opposition party has their say, certain demographically desirable emissions will be subsidized too.
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