An 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. WAS is being filed from Beijing until further notice.

Chinese government orders consolidation: The Chinese government issued its plan to consolidate the auto sector. It includes decisions to merge the country’s major auto-making groups to from 14 to 10, and to subsidize rural buyers of new vehicles, China Securities Journal reports via Gasgoo. According to the plan, the current 14 Chinese carmakers, which together hold 90 percent market share, will be reduced to 10 or less through mergers. The government wants to see two or three big Chinese groups with annual production each exceeding 2 million vehicles, plus four or five groups making over 1 million vehicles.

Japan going down, down, down: Japan’s domestic auto sales may fall below 3 million vehicles this year, the Nikkei [sub] reports. Japan Automobile Dealers Association Chairman Yoichi Amano predicts Japanese sales could sink to the lowest level since 1971. “The projection made last year that sales would decline below 3 million vehicles some time between 2015 and 2020 might come true as early as this year,” Amano told a general meeting of association members, expressing concern that the economic downturn may further depress demand.

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An 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. WAS is being filed from Beijing until further notice.

Interest in Saab: Jan-Åke Jonsson, managing director of Saab Automobile AB, said other carmakers were among the investors that had shown interest in the unit, Reuters reports. The Swedish carmaker, granted protection from creditors last week, has said it must quickly restructure to deal with losses, seen at 3 billion Swedish crowns ($347 million) this year, and find new funding from either private or public sources in order to launch new and more competitive models. Germany’s Autohaus reports that Sweden’s government again denied any financial help to Saab.

Opel will hand in homework: GM Europe and Opel finally got their acts together: they will present their long-awaited business plan to the German government in the coming days, Reuters says. The German government distanced itself on Monday from any commitment to Opel’s future.

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There is an old adage on Wall Street: If Business Week calls a trend, sell and run. TTAC has followed the dalliances between China and Detroit for many months now. The rumors ran the gamut from SAIC buying all of GM to a small Chinese manufacturer picking up Hummer. So far, nothing materialized. Now, Business Week jumps on the bandwagon: “The last hope to stop General Motors Corp.’s wounded Saturn brand from falling out of the solar system appears to rest with some unknown automaker building cars for the dealers to sell. Chinese and Indian automakers, which have made noise about entering the U.S. market, would be the most likely suppliers.” A bit belatedly, Business Week made some calls.

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An 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. WAS is being filed from Beijing until further notice.

After Saab, will Opel be next? GM’s decision to push its Saab unit into bankruptcy protection puts pressure on Germany, the UK and Spain to come up with funding to save the rest of GM’s European business, Bloomberg reports. Hours after Saab filed for creditor protection, Opel supervisory-board member, Armin Schild, said the Ruesselsheim, Germany-based unit needs a rescue package that may exceed 3.3b euros ($4.23b). GM has set March 31 for deciding on all its European divisions’ future as the carmaker seeks as much as $16.6b in new U.S. federal loans. Saab’s move to seek protection from creditors “creates a sense of urgency” at Opel, said Laurenz Meyer, a lawmaker and economics spokesman with Chancellor Angela Merkel’s ruling Christian Democrats. On the dark side: some members of Merkel’s Christian Democrats oppose government guarantees for Opel. They say Opel won’t operate profitably in the long term because it lacks an effective business model. They’re also worried that aid would go directly to the US. On the bright side: should Trollhättan-based Saab survive a three-month “reconstruction” under court supervision, the Swedish company may play a role in a more independent Opel. As GM’s only European brand with market recognition in the US, Saab could offer Opel a chance to “re-skin” its products for the world’s biggest auto market. On the sinister side: Most European automakers wouldn’t mind Opel fading away.

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An 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. WAS is being filed from Beijing until further notice.

Opel needs more money: Up until now, Opel had mentioned that they may need €1.8b in loan guarantees “just in case.” Now Manager Magazin reports that Opel will definitely need twice the amount. There are mounting indications that the German government will only part with the money if Opel is spun off and totally separate from GM. States where Opel has plants have indicated that they would take a stake. Also, there is pressure from Berlin that GM finally transfers the €1b which it owes Opel. Germany’s Chancellor Angela Merkel is still waiting for a viability concept promised, but not delivered, by Opel.
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Today, the Supervisory Board of Saab decided to declare bankruptcy, Automobilwoche [sub] writes. The 4000 employees of Saab are being informed at a meeting how the company will continue. The company is now under the supervision of an insolvency administrator. Since Sweden’s government had turned down bailout requests of the mother ship GM, according to Swedish media, one possible solution would be a merger of Saab with a spun-off Opel.

[Here’s a link to the document filed today at the court. The English version starts on page 7 of the pdf.]

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An 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. WAS is being filed from Beijing until further notice.

Increasing indications that GM plans to cut Opel loose: North Rhine-Westphalia’s Premier, Jürgen Rüttgers, had a chin wag with GM’s CEO, Automobilwoche [sub] reports. Rick Wagoner told Rüttger there are no plans to close any German plants, including the one in Bochum, which is in Rüttger’s state. “Currently.” News flash! Wagoner expressed his interest in spinning-off Opel. Rüttgers told Rick that GM would have to keep the German plants open to qualify for German government money. How the spin-off is going to work still is anybody’s guess.

Saab may go bankrupt this week: GM’s Saab will start insolvency procedures as early as this week, das Autohaus reports, citing Swedish news reports. Sweden’s Economy Minister has already said that this would be the proper way to go.

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An 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. WAS is being filed from Beijing until further notice.

GM/Opel ready to deal: As some kind of bankruptcy for GM becomes more likely by the minute, The General has signaled its readiness to consider some kind of a third party engagement in Opel. “If it makes sense and helps to make GM Europe and Opel successful, then the management is ready to entertain partnerships with or equity engagement of third parties,” GM Europe President, Carl-Peter Forster; Opel CEO, Hans Demant; and the Chairman of Opel’s Worker Council, Klaus Franz, said in a joint announcement, Automobilwoche [sub] reports. They did not elaborate whether this means an engagement by other manufacturers or an engagement by Germany’s state and central governments. In the meantime, Chancellor Angela Merkel is still waiting for Opel and GM to do their homework and hand in a viability plan: “Right now, the government cannot act because we don’t have the necessary concepts from Opel,” Frau Merkel said.

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Hedge funds are busy seeking painful revenge on Porsche. According to the Financial Times, they “have gained more ammunition for their legal complaints against Porsche after the German sports carmaker revealed it had made almost $514M by placing bets on several German blue-chip shares, in addition to last year’s controversial trades in Volkswagen options.” Why is this tidbit consequential? Because Porsche had always maintained that all they had in mind was the innocent takeover of Volkswagen.

In 2008, Porsche had higher profits than sales. They made a profit of €6.8B from VW option trades and about €1B from selling sports cars. Last October, Porsche disclosed that it controlled, through direct holdings and options, 74 percent of Volkswagen. This catapulted the VW share price above the €1000 mark and inflicted large losses on hedge funds and other investors that had placed bets on a falling VW share price.

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An 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. WAS is being filed from Beijing until further notice.

Hell, no, let us go: On Monday, GM’s European labor leaders called for GM to jettison their Opel/Vauxhall brand. According to Reuters, the unions would prefer an independent Opel/Vauxhall, rather than face what they called “potentially fatal cost-cutting.” A statement on the labor force’s website left no doubt that the long knives were out. “The spin-off of Opel/Vauxhall . . . and the spin-off of (Swedish brand) Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits.” German state and central governments appear to be supportive of the plan.

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An 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. WAS is being filed from Beijing until further notice.

German governments taking over Opel? The German states of Hesse and Thuringia are mulling plans for an engagement in an Opel company that has been separated from GM, Automobilwoche [sub] reports. The states are sites of major Opel factories. Both states would neither confirm nor deny the reports. “All we are saying is that we are engaged in a good discussion with the Berlin government and the other states that have Opel factories,” the speaker of the Hesse government said, somewhat sybillinicly.

Daimler and BMW to cooperate—whether they want to or not: The boards of both Daimler and BMW have issued clear directives to their rebellious troops to cooperate in alle areas which are invisible to the customers and which don’t touch the brand, Das Autohaus says. Until now, attempts to do same had been torpedoed by feuding engineers. Now “everything short of a merger or cross holdings is thinkable,” Autohaus says. Thinkable, yes. But will the piston heads in Stuttgart and Munich bury the hatchet?

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Shame on us that we’ve overlooked a startling statement made by Crisis LLC’s Prez. In a speech last Thursday at the Economic Club of Chicago, Jim Press basically said that anyone who expects more than 10m SAAR (annual selling rate) anytime soon is on drugs. Instead of getting better, it might get worse,

“It would be a mistake to assume that this ‘10 million market’ is an aberration. Instead, we need to accept and come to grips with it,” Jim Press said. Coming to grips with it means that it will be a 10m market for – gasp – at least for four years. In January, the annual sales rate (SAAR) was just under 10m units. Press is preparing the world for worse: “I’ve told our dealers that one day we may even look back on January of 2009 as the “good old days!”

Then, a second moment of startling truth…
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Ford’s Volvo has been on the block–excuse us, “strategic review”–for a while now, both unofficially and officially. So far, the flirtations with possible suitors resembled dating tours to the Philippines or Russia. A little petting, and then nothing. Now, finally, there are indications that the dalliances may enter the terminal phase: Either Ford gets a signature from a willing buyer or Volvo will be terminated. Extra urgency has no doubt been lent by the Swedish government which told GM (and by implication, Ford) not to expect a single öre, and to get on with it, or get out.

The Swedish paper Dagens Industri yesterday carried a report that there are four serious suitors for Volvo: China’s Changan, China’s Dongfeng, and–surprise–France’s Renault. As the dark horse, there is an ominously unidentified suitor. For those who have a problem understanding Swedish, Bloomberg carries a pretty good summation of Dagens Industri’s report. Ford and Volvo met with their investment bankers in London this past week, and the candidates were deemed “serious” enough to be allowed to see confidential information about future Volvo Cars models, says Dagens Industri.
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Stefanie Wolter’s wrecking yard is one of the largest in the northern part of Hesse, Germany. On an average day, they used to receive one or two cars to be euthanized. Now, suddenly, it’s ten. Clunkers are lining up, and the yard can’t kill them as fast as they come in. It’s a common sight in Germany. Wrecking yards are getting crushed under the load of cars to be crushed, Automobilwoche [sub] reports.

The attack of the aging automobiles is caused by the Abwrackprämie (cash for clunkers program) paid for by the German government. Since January 14^th, 2009, owners of cars nine years or older can collect €2.5K if they put the pile of rust out of its misery, and buy a new one.

In the beginning, the program was ridiculed. It’s not going to work, said many, owners of clunkers won’t buy new. The Green Party said it’s “a joke.” Quickly, the mood changed.
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Car analyst Erich Merkle was a cheery guy. A few days ago, as reported by mlive, he still believed Ford will thrive and GM will survive with government help. He had his doubts about Crisis LLC, but who hasn’t.

Now suddenly, Merkle joins the ranks of those who gather their maps to plot a path for the hills. The main problem of the car industry is that there aren’t enough buyers. There are less by the day. People are losing jobs. With more on the dole, there will fewer in the showrooms. “I’m concerned about the job losses. The acceleration is pretty alarming, and that has to stabilize,” Merkle said to Reuters.

“If we don’t beat the second half of 2008 this year, then it could be all over,” said Merkle. “We’re all going to be peeling bark off trees and go back to being an agrarian society.”