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.

Sweden to GM: “Take a hike”: GM is asking Sweden to guarantee $600 million in European Investment Bank loans to keep the Saab Automobile unit operating until it can be restructured. All they got from Sweden was a firm nej, inte alls. (Forgetaboutit.) Sweden’s Premier, Fredrik Reinfeldt, said that “GM has to bear the responsibility,” Automobilwoche [sub] reports. Some insiders see the mounting unwillingness of foreign governments to help US automakers as a backlash against the “buy American” campaign. Non-,conspiracy-bound observers point out that the Swedish government is hoping that both GM and Ford will be successful in unloading their respective Swedish brands. Sweden wants to add extra incentive to move fast by removing any additional life support.

Chery / Volvo still in play: Usually, on the second day after a dalliance between a Chinese manufacturer and a Detroit brand is floated, a denial follows like clockwork. Instead, Chery-owned Gasgoo today runs a new story reiterating a possible bid by China’s Chery for Volvo, a brand which Ford is desperately seeking to unload. The story itself provides no new insight, but the added traffic is relevant from a SIGINT perspective.

It’s a crimson-red bloodbath: More than 460, or nearly 30 percent of publicly traded Japanese companies, are expected to report group net losses in the year ending March 31, the Nikkei [sub] reports. The bloodletting is especially severe in the automobile sector, where profits through the third quarter have been wiped out by bigger and bigger losses in the last quarter of fiscal 2008.
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Yesterday, we related a Reuters report that SAIC might buy out the Chinese part of GM, that GM might take the money and bail. Today, true to form, the denials arrived. Again according to Reuters, GM says they have no plan to sell shares in its joint venture SAIC. This according to Henry Wong, a spokesman for General Motors China. Reuters is positive that GM held talks with SAIC Motor about selling part of its 50 percent stake in the joint venture, or other assets. As if on cue, GM’s plan to enter a joint venture with SAIC’s competitor FAW received new traction today. The plan had been on hold for a while.

In the meantime, the speed dating game between Chinese companies and desperate Detroit companies who want to swap their corporate children for cash continues. Today on the radar screen, again: Volvo. Reuters has picked up indications that Chinese car maker Chery Automobile has held talks with several European auto brands, including Ford’s Volvo, and is interested in an acquisition. Volvo and GM are not alone.Whole China is turning into a speed dating frenzy, anything goes, and the dates are getting cheaper by the minute.

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.

European Carmageddon: “What, me worry?” Europe experienced the full brunt of carmageddon in January. Europeans bought 27 percent fewer cars in January than in the same month of the prior year. Only 958,500 cars hit Europe’s highways and myways, Das Autohaus reports. The German industry group VDA expects the trend to continue. Relatively benign losses were recorded in France (down 8 percent) and Germany (down 14 percent). The European basket cases are Spain (down 42 percent), Italy (down 33 percent) and UK (down 31 percent). Romania lost half of its new car sales.

Share or retire: Toyota will introduce work-sharing arrangements at assembly plants in the US and Britain in an effort to retain jobs after sharp production cuts at these facilities, the Nikkei [sub] writes. The move is expected to involve US factories in Indiana and Texas, which roll out large vehicles, as well as plants in the UK, including a facility that assembles midsize cars and subcompacts in the county of Derbyshire. Toyota plans to propose the work-sharing arrangements to workers at these facilities by the end of the month. Those that do not accept will be allowed to apply for early retirement.
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New twist in the SAIC buying GM saga (and fair warnings to TTAC’s admins to allocate extra bandwidth). We’ve said all along that SAIC had designs on GM’s assets. That they would just wait until the time—make that until the price—is right. Well, the time is right. GM has until Tuesday to submit a new restructuring plan to the U.S. government detailing its progress cutting costs, shoring up its balance sheet and figuring out a way Fordward [sic]. So the time has never been righter, and the price is most likely commensurate. With all other deals failing, GM is getting ready to sell their crown jewels: their China operation.

Despite constant denials, General Motors has held talks with China’s SAIC Motor Corp about selling part of its stake in their joint venture or other assets as the U.S. automaker, Reuters reports. GM needs the cash, STAT. According to Reuters, GM approached SAIC Motor in recent weeks with an offer to sell some of its stake in their 50-50 joint venture that builds and markets Buick, Cadillac and Chevrolet models in China. And why would they do that?
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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.

HUMMER sold to China? General Motors Corp., working to sell assets to help keep $13.4b in US loans, has drawn interest in its HUMMER brand from a Chinese company and a private-equity firm, says Bloomberg [via Gasgoo]. The pace of negotiations has intensified in the past few weeks, said the people, who wouldn’t name the suitors and asked not to be identified because the discussions are private (so there). More meetings are scheduled this week. According to Bloomberg, “unloading the sport-utility vehicle unit would move GM closer to the goal of showing its future viability to the U.S. Treasury by Feb. 17. If the biggest US automaker can’t prove its ability to return to profit, it could be told to give up the loans or use the cash for a government-funded bankruptcy.” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, estimates Hummer might fetch $100m or less.

Fallout in Japan: The major production cuts being implemented by Japan’s carmakers are beginning to seriously hurt the finances of their parts suppliers, the Nikkei [sub] writes. Autoparts suppliers and other firms in the industry employ a total 670k workers in Japan, nearly four times as many as those working at domestic carmakers. Says the Nikkei: “If many of them fail, the industry itself could become unsustainable.”

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Fitch Ratings is the world’s bankruptcy alert agency. If you want to know whether someone (say a large company or small country) will be able to pay his/its bills, talk to Fitch. Currently, Fitch doesn’t think it a good idea to extend credit to anyone in the automotive industry. Fitch Ratings [sub] describes the global outlook for the automotive industry in 2009 as negative. “Weak GDP growth and the effects of the international financial crisis will continue to have a significant impact on the global auto industry, creating downwards pressure on carmakers’ credit profiles in the short to medium term,” says Emmanuel Bulle, Senior Director in Fitch’s Automotive team. “In addition, the length and severity of the current crisis are still unknown, whilst manufacturers’ responses to the crisis are still evolving.” Translation: Nobody knows how long this will be going on, and nobody knows what they are doing. Time for triage . . .
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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.

Japanese bondage: Toyota plans to procure 100 billion yen or so by issuing about 50 billion yen each in five- and 10-year straight bonds as early as this month, the Nikkei [sub]. The issuance of straight bonds will be the automaker’s first since September 2002. The rating on Toyota’s long-term debt has been downgraded by both Moody’s Investors Service Inc. and Standard & Poor’s, each by one notch from the highest grade. This sets Toyota apart from other automakers who are treated by banks like lepers.

Nissan going for greener pastures: Nissan’s Carlos Ghosn talked up plans for mass-producing electric cars in the U.S., Europe and China, the Nikkei [sub] reports. Chief Operating Officer Toshiyuki Shiga admits that he would like to see Nissan’s electric cars made in Japan. But with the financial crisis crimping Nissan’s ability to raise capital, the US and Europe, which have introduced subsidies for environmentally friendly cars, are more attractive venues. Nissan would be the first Japanese automaker to apply for the US government’s 25 billion dollar program of low-interest loans to develop green cars.
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Wolfgang Bernhard is coming home to Daimler. Not in an exalted position. He will take over Mercedes vans, Automobilwoche [sub] reports. The former McKinsey consultant who became project manager at Mercedes Benz (always a bad sign when McKinsey dumps one of their own on a client) went to Detroit with Dieter Zetsche. As COO, Bernhard was Zetsche’s hatchet man at Chrysler. Back in Germany, he was groomed as boss of Mercedes, but lost in a fight with Jürgen Schrempp. Off he went to Volkswagen, where he ran the Volkswagen brand, along with Skoda, Bentley and Bugatti. Again, he was thought to be groomed as successor of Pischetsrieder. But actually, he was axed shortly after Pischetsrieder was sent packing and the Porsche-Piech putsch unfolded. Eyebrows rose when Bernhard showed up at Cerberus. Some saw him as the new Chrysler head. But no, again. He left a few months after he arrived. A stint at ill-fated Austrian Airlines also didn’t last long. And now he’s back where he began. At Mercedes. In charge of delivery vans.

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.

Nissan’s no-hitter: After announcing an expected loss in the current fiscal, Nissan will suspend corporate sports activities, including its standout baseball team, the Nikkei [sub] reports. Nissan’s ball club, which was founded in 1959, has won corporate championships and produced a string of professional baseball players. Also to be sidelined is Nissan’s table tennis team, which also dates back to 1959. Its most recent stint atop the winner’s podium occurred in 2007. The table tennis and track and field teams will be disbanded at the end of next month. All eyes are on Toyota and whether they will ditch their vastly more expensive F1 team. The rumor mill says they will stick with it for the now.

Nissan goes for green green: Nissan has applied for low-interest loans being offered under a US government program aimed at promoting the development of environment-friendly cars, the Nikkei [sub] says. This is the first time a Japanese carmaker has applied for the 25-billion-dollar program. One of the conditions for qualifying for the federal loan program is that the applicant has been operating facilities in the US for an extended period of time. Nissan intends to apply for similar aid programs for developing environment-friendly vehicles in Europe and China.

Cheaper hooch: One of the many problems of bio-ethanol is that it’s expensive to make. Toyota, Nippon Oil, Mitsubishi Heavy and three other firms will jointly develop technologies to produce cellulosic ethanol from nonfood plants. By bringing together their know-how in such fields as plant cultivation, glycation and fermentation, they hope to develop a comprehensive production system and bring down production costs to around 40 yen ($0.44) per liter by 2015, says the Nikkei [sub].
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In January, China’s auto sales for the first time in history exceeded America’s, making China the world’s largest auto market for the month. As we said, sooner than later, China is bound to outclass the US of A solidly. Xu Changming, director of China’s economic consultative center under the State Information Center, thinks that it is quite possible that China will overtake the United States as the World No.1 car market for all of 2009: “Chinese auto sales are expected to grow 4 percent to 5 percent from 9.38 million units sold last year, more than the estimated 9 million unit sales in the U.S. this year.”

“But this figure is not something we should feel proud of since the U.S. was just plunged into an economic recession,” Xu warns according to Gasgoo. “Once the recession ends, America can retake the sales crown by selling 16 million–17 million vehicles annually.” So even if China takes the crown this year, they might lose it, and then “China still needs at least four to five years to eventually catch up with the U.S. in the auto sales total,” said Xu. And he has reason for caution . . .
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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.

Nissan sees red: Nissan cut its earnings outlook, saying it now expects a consolidated net loss of 265 billion yen for the year ending March 31, the Nikkei [sub] writes. The automaker earlier forecast a net profit of 160 billion yen, down 67 percent from the previous term. Nissan downgraded its sales outlook to a 23 percent fall. The carmaker also projects an operating loss of 180 billion yen, tumbling into the red for the first time in 14 years, in a sharp reversal from the 270 billion yen profit, down 66 percent. Nissan will cut 20,000 jobs in Japan and abroad by the end of March 2010, bringing the total payroll down to 215,000 employees. This is the first loss since fiscal 1999 when current President Carlos Ghosn became chief operating officer after Nissan formed an alliance with France’s Renault.

India keeps going down: India’s domestic car sales fell for the fourth straight month in January. Sales fell 3.2 percent in January, the Nikkei [sub] reports. They were down 7 percent in December, 19 percent in November, 6.6 percent in October, 4.4 percent in August, and 1.7 percent in July. Only in September 2008, sales rose 2.8 percent.
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The  “barn find” of a 1937 Bugatti Type 57S Atalante, that was thought to fetch $8.7m, finally went under the hammer at Bonham’s in Paris. According to the BBC, “it eventually sold for 3,417,500 euros.” At today’s rate, that’s $4.4m . . . about half.  Even barn finds don’t keep their residual value as much as they used to.

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 Tokyo this week. There will be no WAS on Sunday while we re-locate to Beijing.

Isuzu sees red: Isuzu posted net losses for the October-December quarter due to weak domestic truck sales, a stronger yen and higher material costs, the Nikkei [sub] reports. Net losses were ¥11.7b in the three months ended Dec. 31, down from a profit of ¥24.4b a year earlier. Sales dropped 21 percent to ¥340.4b in the quarter, down from ¥430b a year ago. On an operating basis, Isuzu lost ¥1.6b, compared with a ¥28b profit in the quarter a year before. For the full fiscal year ending March, Isuzu lowered its outlook to a loss of ¥15b.

Yen for govt. yen: Japanese auto makers are scrambling to raise cash before the end of the fiscal year in March, the Nikkei [sub] says. Nissan is considering applying for the low-interest funds, Isuzu said Friday that it may do the same to raise several tens of billions of yen. Mitsubishi Motors is also considering tapping the Japanese government program.
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Toyota will end their fiscal year ending in March badly bruised. Financial Times reports that ToMoCo’s losses will be three times larger than previously forecast. The worst industry slump in decades has put a painful crimp in an amazing run. Last year, Toyota earned a record operating profit of $30b. In the same year, they became officially the world’s largest automaker, a title many had said should have been given to Toyota a year before. In November 2008, Toyota still projected a profit of $6.6b. Then, carmageddon caught up with them.

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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 Tokyo this week.

Geely doesn’t want Volvo: China’s largest privately owned carmaker Geely has denied reports that it is acquiring the Volvo car unit from Ford Motor Co, China Daily reports. Ford has also approached Chery Automobile Co and Chongqing Changan Automobile Co. Li Chunbo, an analyst with CITIC Securities Co in Beijing, said when a Chinese enterprise attempts to acquire a foreign rival it has to consider how it will benefit from the deal and whether it is capable of dealing with the purchased unit. “When you compare the market value of Geely and Volvo, you will ask how can Geely raise enough money to buy the European car brand,” he said. If this goes on much longer, not much money may be needed.

La bella clunker culleria: Italy is hopping on the European clunker culling bandwagon. Italian consumers will be given six months to go out and buy a new car under a “strong package” of incentives that Silvio Berlusconi’s centre-right government expects to approve today, Financial Times reports. The package would provide possibly up to €1,500 a car, to exchange models at least 10 years old for new, relatively small cars. The government would also provide credit guarantees to banks to finance purchases. The incentives are not limited to Italian cars, but the conditions attached—small capacity and least polluting—“would clearly favor Fiat,” the FT says. Protectionism, with style . . . .
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