Important visitors today in Angela Merkel’s chancellery in Berlin: A delegation of German Opel dealers. They present a plan for a truly German future of Opel. The title of the plan: “We believe in the future of the Opel brand.” What the dealers and the German government don’t quite believe in is the future of the US bail-out package. Everybody is preparing for the worst, the defeat of the General, and (in their eyes) the best: Opel, German again.

The delegation is led by representatives of several well-heeled dealer groups. As early as November, plans had surfaced that a consortium of dealers is ready to take over Opel if the previously unsinkable should go down. The Opel works council has openly supported the plan. Opel management is giving tacit approval, without sticking their necks too far out. Recriminations from Zurich or Detroit can be swift. There is an update:

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In the West, SUVs are dog meat. News of this hasn’t reached the Middle Kingdom quite yet. Tired of announcements of falling car sales? Lusting back to the bad old days where there was no replacement for displacement? In China, people buy SUVs as if they are going out of style – or not, as our Dear Leader Farago fancies to say. From January to November, SUV sales in the Chinese market rose 33.7 percent. That according to data released by China’s Association of Automobile Manufacturers, cited in a Gasgoo report. The November sales of SUVs in China totaled 40,300 units, up 9.49 percent from November in the prior year. In the same month, sales for all cars in China actually dropped 14.56 percent. Compared to the market, the Chinese appetite for off-road fare is still ravenous. Biggest sellers amongst the big bad boys are the Honda CR-V, the Great Wall Hover, and the Chery Tiggo. If you still want to enjoy your freedom to burn gallons and churn up dust: Come to the SUV-God’s own country, China. About a third of China is desert, and 40 percent are scrubland.

For quite a while, Dongfeng, China’s third largest automaker, had been rumored to be interested in taking over GM. Now, Dongfeng has lost all interest in the deal, China’s Securities Daily reports via Gasgoo.

It’s very interesting what Xie Dashun, a publicity officer at Dongfeng has to say. Yes, there were talks. And no. Dongfeng doesn’t like what they saw, or what they were not told: “Even though Dongfeng has contacted GM, the results are not available yet. Personally I don’t think Dongfeng has the ability to save GM, a company that neither its CEO or the U.S. government is able to save.” Strong words from the usually very polite Chinese, and from a company that is mostly owned by the central government. Even Gasgoo can’t help themselves from mentioning that GM’s “problem is far beyond the money value.”

Gasgoo cites an industry analyst who said that “it’s still early to talk about the acquisition of GM by a Chinese auto company before the U.S. automaker files for bankruptcy. Almost no Chinese enterprise has the might to buy out the U.S. auto giant, and the cash flow of Dongfeng Motor is far from enough to buy an American company like GM.” Note the “before the U.S. automaker files for bankruptcy.”

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European car buyers show solidarity and join the worldwide buyers’ strike. November sales in the EU fell 26 percent to 932,500 units, Automobilwoche (sub) reports. That, people, makes the EU the world’s largest car market. And we aren’t even counting “light trucks” here. Western Europe sank 26 percent to 854,700 cars. For the year, Western Europe is down 8 percent. Biggest losers: Spain (-50 percent,) UK (-37 percent,) Italy (-30 percent.) Even the new EU countries, previously the only places where there was growth, are no longer immune. Except for Poland (+11 percent) und the Czech Republic (+2 percent,) sales are down everywhere. Rumania even imploded to the thumping tune of minus 53 percent. Car sales in the new EU countries are down 23 percent to 77.800 cars. Nobody is an island, even Central Europe ain’t.

As far as brands go, GM is the biggest percentage loser with -37.5 percent. They sold 76.383 units in November, their market share shrunk from 9.7% to 8,2%. Toyota lost a third of their sales, their market share is down to 4.7 percent from 5.2 percent. Ford gets a gold star. They lost only 19.6 percent and increased their market share from 9.5 percent to 10.3 percent. And it gets worse …

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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.

More belt tightening in Japan: A year ago, Suzuki entered the World Rally Championship. Yesterday, they said they would stop competing in the series from next year “due to the cost burden,” as the Nikkei (sub) has it.  Fuji Heavy Industries, the manufacturer of Subaru, is also considering pulling out of the WRC. This follows Honda’s recent decision to withdraw from Formula One racing. The annual cost of staying in WRC racing is estimated to be in the $50m ballpark. Every Yen saved is a Yen earned. Everybody is waiting for more expensive shoes to drop in Formula 1, where the price of admission is $500m. All eyes on hapless Toyota. For starters.

BYD bullish on cars: China’s BYD Co. aims to double sales of automobiles next year, defying the gravity of the auto market, Gasgoo reports. BYD plans to sell 350,000 vehicles in 2009, up from a total of 180,000 cars it plans to sell this year. In 2007, BYD sold about 90,000 vehicles. What is hurting BYD is the slowdown in worldwide mobile phone sales, for which BYD supplies the bulk of the batteries.

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Sergio Marchionne, eat your heart out. There’s yet another car manufacturer in town. All the way from Iran, we present to you: SAIPA and the all new Miniator! Last weekend, Iranian manufacturer SAIPA launched their first Iranian-grown car, the Miniator, Automobilwoche [sub] reports. The compact sedan is powered by a 1.5 liter 4-banger – also of Iranian provenance – that makes 80 hp. Guess if they can build missiles and nuclear bombs, bulding a car should be within their grasp. A price for the ayatollah auto has not been announced. Saipa-chief Mehrdad Bazrpash said the “car will be affordable to give poorer people the chance to own a car.” It is widely understood that the price point should be somewhere around $10K. Saipa was established in 1966 to assemble the two-cylinder Citroën mini passenger car, the Dyane. Later they manufactured licensed versions of the Renault 5, Renault 21 and Kia Pride. SAIPA also produces the Citroën Xantia along with other Citroën models. The Iranian government is said to own 48 percent of SAIPA.  I’m trying to talk Michael Karesh, who is currently with me in Beijing, to detour through Teheran on his way back to test drive the all new Miniator, but he’s making up excuses.

The Chinese government is considering plans to breathe new life in their still growing, but sputtering auto market. “Industrial growth is sharply declining and we have not seen a turning point yet. We feel a lot of pressure,” Industry Minister Li Yizhong said at a recent news conference in Beijing. The Minister laid out several initiatives, “but gave no indication any measures had been decided or when they might take effect,” Gasgoo says. The possible steps are:

– A $2.2 billion package of subsidized loans, targeted at improving technology and cutting energy use.

– Beijing might buy surplus steel to help producers and give aid to steelmakers for upgrading technology as demand plummets.

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The on-again, off-again affair between China and the Gubernator’s favorite toy is on-again. China’s Changfeng rekindled its interest in the HUMMER, Gasgoo reports. “We never quit talks on acquiring the brand,” said Zhengchu Chen, General Manager of Changfeng Motor in an interview with Beijing’s Jinghua newspaper. “But now instead of doing it alone, we decided to form a partnership with AM General to reduce the risk as the global economy falters.” Changfeng and AM General LLC have a plan: the two sides are exploring possibilities of building a joint venture company.

Changfeng showed interest in the brand earlier in the year. Representatives of Changfeng even went to the U.S. on an inspection tour. They came back unimpressed. Reuters reported that “the Chinese SUV maker backed off after touring Hummer’s U.S. factory, citing limited potential to market the vehicle.” Well… The Chinese SUV market is still vibrant. From January through October 2008, China’s top 10 SUV makers sold more than 300K units.  More likely: the price tag for HUMMER has dropped. And a joint venture with a maker of American military vehicles has certain, uh, inherent appeal. Already, there are several HMMWV clones in China, such as the EQ2050 by Dongfeng and the SFQ-2040 by SAC. So….

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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.

Asia bourses bullish on bail-out, Bush not sure: Tokyo stocks rebounded Monday morning, with the key Nikkei index climbing more than 4 percent, “as investors reacted to hope that the U.S. government will eventually save the embattled top U.S. automakers,” the Nikkei (sub) says. Japanese traders also liked that the yen dropped against the dollar, which makes Japanese goods less expensive in dollar terms. The market ignored remarks by Bush that an auto industry rescue is far from imminent. “We’re not quite ready to announce that yet,” Bush told Reuters on Air Force One during a flight from Baghdad on an unannounced visit to Afghanistan.

What can happen if a company actually owns its real estate: Mitsubishi plans to raise its office rents in Tokyo’s Marunouchi business district by an average of 15 percent despite the economic downturn the Nikkei (sub) reports. Overall demand for office space is weak in Japan, but remains strong in downtown Tokyo. Mitsubishi is confident that its offices in central Tokyo will remain highly sought-after because most are equipped with state-of-the-art IT networks and feature cutting-edge, energy-saving technology.

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Many have been guessing what annual U.S. car sales would amount to this year. Some confused souls predicted sales as low as 10m. J.D.Power now has the pretty firm conviction that the year will end with 13.2m light vehicles sold for the year in the United States, down 18.5 percent from 16.2m in 2007, says the Automotive News (sub) who received an e-mail from J.D.Power. However, the big slump happened in the last 4 months. For the last 4 months, monthly sales were under 1 million. Total light-vehicle unit sales will hit 870,000 this month, down 37 percent from December 2007. Now THAT’S bad. That puts the seasonally adjusted annual rate to 10 million light vehicles in December, down from 10.3 million in November. Now THAT’S even worse. The rate had not fallen to 10 million since October 1982. Meaning: The worst is yet ahead. If the non-buying trend continues, the confused souls will be right next year and we could see only 10m units sold in 2009. China wanted to sell 10m units in 2008, a target they will not reach. With a little luck, and an economic stimulus program that works, China could make the target next year and, horror of horrors, turn into the world’s largest auto market.

PS: According to the China Association of Automobile Manufacturers (CAAM), Chinese auto makers produced about 8.7m automobiles and sold more than 8.6m from January to November. They will close out the year in the mid 9m.

For days, Fiat’s CEO Sergio Marchionne had made noises that his company cannot survive alone and is in urgent need of a strong partner to live to tell the tale in the nasty car business. He may have found a suitor, the Italian business paper Milano Finanza (sub) reports: PSA, maker of Peugeot and Citroen. According to the paper, the marriage is being arranged at the highest levels: Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy are discussing to tie the knot between their countries’ automakers. There could even be a dowry: Berlusconi is currently thinking about aid to the auto sector. Except for Fiat, Italy hasn’t much of an auto sector. PSA and Fiat are no strangers. They have two joint ventures, one for trucks and one for the “Eurovan” MPVs. Combined output of the two companies was 6.2m units last year. A combined Fiat-PSA would have a good shot at the number 4 slot, with Toyota first, GM second, and VW third. Fiat-PSA would have to duke it out with Ford and Renault-Nissan. What’s the prospective couple saying to all this?

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Video re-enactment of last week’s attempts to get the bail-out plan through both chambers.

ToMoCo tightens belt hard: Toyota has put major capital investment projects on ice while sales tumble and the global economic condition looks grimmer by the day, the Nikkei (sub) says. Major projects affected: Chinese factory expansion delayed until sales recover. Capacity expansion in Brazil and India on halt. Mississippi plant opening delayed until 2011 or later. Revamping of production lines in Takaoka, Japan, pushed back to at least 2010. The Nikkei: “The recent postponements are likely to impact a wide range of entities, including part suppliers, materials makers and equipment manufacturers. Other automakers might follow Toyota’s lead in cutting capital expenditures amid the global sales downturn.”

VeeDub closes Chinese plants “for maintenance:” Volkswagen’s two Chinese joint ventures are planning to partly suspend production lines to “conduct maintenance work,” China Daily says, citing a Sunday report by state television. FAW-Volkswagen plans to suspend part of its production at their plant in Changchun at the end of the year. Shanghai Volkswagen will also suspend work at its production line for half a month from mid-December to early January. China Daily called Volkswagen’s office in Beijing and the two joint venture companies. The phones “rang unanswered on a Sunday,” writes China Daily.

Daimler cuts costs: Daimler aims to cut costs at its Mercedes-Benz Cars group by 10-15 percent in 2009, Reuters says. In the sales division, costs were to be reduced by up to 30 percent.

And it’s hitting the parts makers: Bosch plans to reduce costs in its automotive division by not renewing temporary workers’ contracts and possibly cutting jobs outside its German home market, a company spokesman said on Saturday to Reuters. Sales in October and November slumped by 20 percent.

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Duh. After a month of increasing indications that mostly Chinese concerns may be interested in snapping up pieces of the D2.8, the MSM is cautiously warming up to the facts of life. It’s happening everywhere. Except at the stalwart Detroit News, which sticks to it’s “see no evil, hear no evil, write no evil” editorial policy, and where a search for “SAIC” produces “GM to offer OnStar service in China.” Good luck with that.

“Now, Americans will be introduced to car companies like Tata from India and SAIC Motor Corp. and Guangzhou Automobile Group Co. from China,” writes Robert Rector for the Pasadena Star-News. “Undoubtedly, they will likely follow the Japanese model and build factories in the United States because of the cost of transporting fleets of automobiles across the Pacific.” Points for not giving up the hope. But wrong, Mr. Rector. First, Tata is most likely out of the game for a while, for reasons we shall see further below. Second, the cost of transporting fleets of automobiles across the high seas is minor compared to the price of the car. Especially now where ships are sailing half empty. Factories are built when exchange and labor rates are unfavorable. The Chinese will most likely keep as much as possible in China. Even Motor Trend wakes up:

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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.

Canada ready to help – if U.S. goes first: Canada’s industry minister Clement said that the Canadian government has agreed to provide aid to automakers – as soon as the U.S. government approves a rescue package, says Reuters. The amount of money Canada is proposing is based the country’s 20 percent share of the auto industry. The more the U.S. shakes loose, the more Canada’s 20 percent share will amount to.

Japanese strength hurts Japan: Japan’s automakers will lose $2.2b in profits in the current fiscal year if the yen remains at current high levels against the dollar, the Nikkei (sub) reports. Toyota’s full-year operating profit falls by $450m for every 1-yen decrease in the value of the dollar. Most automakers have an exchange rate of 100 yen to the dollar in their budgets. If the yen stays stronger than planned, it’ll mean itai-itai (major pain) for their books. The Japanese fiscal year usually ends in March. Markets have a perverse way of regulating themselves. And governments have a tendency towards tinkering with the market when they see fit. Some, amongst them the Financial Times, expect an engineered drop of the Yen before March.

Japanese unions want more: Toyota Motor Workers’ Union is unimpressed by the plight of the company, and is expected to demand steep pay increase in the upcoming spring wage negotiations, the Nikkei (sub) learned. That would be the fourth annual pay increase in a row. In tune with the current discussions, the union argues that the increase would “boost domestic demand” in addition to maintaining living standards.

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