Last we heard, Ford tried to shop Volvo to China's SAIC. Now Automotive News [AN. sub] reports that The Blue Oval Boys are trying to dump sell its troubled Swedish division on to Renault. We now learn that initial talks with Renault began last fall. But those broke down over "price differences" (as in Ford thought Volvo was worth something). Apparently, talks have now resumed. Renault/Nissan CEO Carlos Ghosn has said on numerous occasions that he's looking for a partner in the American market. Someone. Anyone. GM? Chrysler? So, why not Volvo? You know, other than the fact the brand's only successful U.S. product– the XC series SUVs– just rolled-over and died. Of course, Ford continues to deny Volvo's on the auction block. "We are focused on improving Volvo's business results," says FoMoCo spinmeister Mark Truby. Meanwhile, AN says that Ford is also talking  with Dongfeng Motor Group. With Ford burning cash, and credit in short supply, expect a Volvo sale as soon as a sufficiently gullible partner is found.

OK, OK, enough with the Yakov Smirnov references. China is no more communist than, say, California. And its vehicle sales prove it. With already-strong demand for passenger vehicles growing by 15 percent this year, Xinhua reports that Chinese automakers are set to sell 10m cars during 2008. According to information from the China Association of Automobile Manufacturers (CAAM), the demand is partly a product of falling car prices; a trend under threat from high steel costs. Moreover, as its car market matures, the Chinese government is poised to "move forward the industry restructuring by detailing standards on security, environment protection and energy saving," according to CAAM vice-chair Dong Yang. "We should keep a clear mind of the overall industry competence lagged behind that of the multi-national companies." Bringing domestically-produced Chinese cars up to international snuff will doubtless prove difficult. As the Chinese market matures and regulatory barriers to ownership increase, sales growth should level off. At some point, the People will bias the market towards home-grown products. Until then, it's double-digit growth as usual.

Innovation is the buzzword de jour for industries undergoing major upheaval. But a study by the annoyingly-named German consulting firm Invensity GMBH, shows that automakers face unique barriers to innovation despite major industry-wide challenges. EE Times Europe details a study of 100 German development team leaders, R&D managers and design engineers from automotive OEMs. The report claims that cost pressure and reliability requirements are the greatest barriers to innovation. Some 46 percent of respondents said automotive industry, innovations are more difficult to implement than in other industries. Only 26 percent believe that the automotive industry is more innovation-friendly than other industries. Yes, well, cost and reliability pressures can actually spur innovation. So, as one of the world's most competitive industries, do automakers really have anything to complain about? Nope. It's the companies who've ignored competition to squeeze short-term profits out of antiquated technology that really need to be worried. And, now, are.

In the car biz, tire makers are something of a canary in the coal mine. And they're coughing like crazy. As America's car market falters, tire manufacturers are facing some plenty tough choices, as they try to manage rising prices and falling demand. Goodyear, America's largest tire company, is seeking relief abroad. Trading Markets reports that they're focusing on growth in foreign markets like Russia, China and Brazil, investing $500m in Chinese production and $600m on plants in Brazil and Chile. Goodyear hopes the investment will pay off with over $2b in savings by 2009. Some of those savings will come from plant closures (e.g. Australia) and longer-than-usual summer production lulls at plants worldwide. Meanwhile and in any case, most tire makers are increasing their prices. Bridgestone, Goodyear, Hankook, Yokohama, Michelin and Continental have all announced some kind of price increase this month alone. 

We reported yesterday that Canada's Magna won a bid to build Boxsters for Porsche at it's Magna-Steyr plant in Austria. The Canadian Press [via News 1130] reports that Magna's exposure to the miserable American market trumped the Porker news, driving Magna's stock to a seven-year low. Some 53 percent of Magna's sales come from its supplier business with the D2.8; the OEM's misfortune is being passed down the supply chain. Higher gas is hurting Magna's business on the demand side, higher steel and plastic prices are hurting on the cost side, and there's no end to the hurting in sight. Magna's purchase of Plastech's exterior manufacturing business means even more D2.8 exposure, on top of the inevitable issues that come from buying a basketcase. Last week Magna cut 400 jobs from its St Thomas, Ont pickup frame manufacturing plant. There's not much else they can do besides weather the storm, and hope that their "most financially attractive offer" to Porsche wasn't a bridge too far. 

The great state of North Carolina recently began issuing license plates beginning with the letters W, T and F. Reasonable, grown-up adults who received these plate numbers at first didn't even bat an eye at the text-slang exclamation adorning their license plates. Until their children started giggling. AFP reports that one North Carolinan with the WTF plates "wasn't hip to the Internet-age significance of her new license plate," but "developed this real self-consciousness" after catching her grandchildren laughing at the hilarity of it all. Rather than enjoying a good ROTFL, this elementary school teacher just did what everyone else in elementary school does when kids mock them on the playground: run crying to the state government. Thanks to one plateholder's stunning lack of a sense of humor, the state of North Carolina is now recalling all of the 9,999 "WTF plates" issued. Including WTF-5505 which was being used by the DMV as a media prop for stories about the state's switch from blue plate lettering to red. The NC DMV has pledged to thoroughly vet every future license plate combination to weed out any inappropriate text-message acronyms (at taxpayer expense). Note to DMV: AYSOS?

A federal district judge has dismissed an auto-industry request to delay implementation of California's new emissions standards. The LA Times reports that the Alliance of Automotive Manufacturers' request to delay the 30 percent reduction by 2016 time line was slapped down by Judge Anthony W. Ishii. He ruled the petition was "without support in law, logic, or grammar." (Apparently the grammar police have a grammar court in California.) The shellacking extends the industry's losing streak to three, having already lost battles against California standards in Vermont and Massachusets. But don't count your carbon footprint just yet; California still has to win a lawsuit against the EPA before implementing the new standards. Except that the waiver was denied against "the unanimous recommendation of the (EPA's) legal and technical staffs." That's right, the EPA's own lawyers think they'll be forced to grant California the waiver. In other words, do start counting your carbon footprint. Meanwhile one of the best things about California: you don't have to live there.

Consumer Reports have a brand-spankety new survey out, and it says that Americans can tell that gas is expensive. Oh yeah, and that they might do something about it. Survey says that four-dollar gas™ has 79 percent of us car-shopping Yanks wanting a "car with better fuel economy," and 74 percent driving less to keep costs down. Even though the respondent-identified $4.32 per gallon "tipping point when drivers would further drastically curtail driving" is only upon those of us on the left coast, a full 80 percent of prospective buyers are considering a "diesel, flex-fuel, or hybrid vehicle." Too bad those numbers aren't broken down between those three very different options. So America has taken notice of pricey gas, but the real question is who do Americans blame? And the answers are as unimaginative as you might expect, with the federal government (77 percent), oil companies (75 percent), foreign oil producers (70 percent), and Middle East conflict (68 percent), taking the rap for pain at the pump. When asked what the feds should do to fix the mess, 90 percent say "increase support for alternative energy development", 84 percent say "negotiate lower prices with oil-exporting nations", 83 percent say "encourage conservation through tax incentives for alternative transportation", while 81 percent want to "allow more drilling in the U.S. and offshore." Interestingly, "Putin-style nationalization of oil firms" and "wholesale invasion of the middle east" weren't polled, suggesting there might not be convenient solutions to scapegoats number two, three and four. 

Our own Jonathan Locker has wondered aloud whether big brother-like aspects of remotely-monitored telematics systems make them worthwhile. But even the Gadsen Flag crowd might be tempted to allow a spy in the trunk if it means saving up to 60 percent on car insurance. The Wall Street Journal documents how insurance companies like Progressive and GMAC Insurance are using telematics to determine customers driving styles– and offer discounts or surcharges accordingly. The Progressive self-reported (non-GPS) mileage program is currently offered in Michigan, Minnesota and Oregon. A staggering 34 percent of customers in those markets have been using the system to save money since 2004. GMAC's program is tied to GM's OnStar system; it costs $199 to $299 after a 12 month free introductory period. But with up to 54 percent in "good driver" discounts available, GMAC reports a 200 percent rise in subscriptions since last year. But these discounts are only available if telematics tell your insurance company that you use your gas and brake pedals within their "safe use" parameters. Brake too hard, drive to many miles, or drag race someone at a stop light and you could be looking at up to nine percent surcharges.

Yes folks, it's Ford-GM merger rumor time again! This time, Business Week reports that GM execs recently mused aloud about the prospects of a merger with FoMoCo. According to "sources briefed on one of the meetings," the idea never made it past the "banter" stage. Dismissing mental images of executives "bantering" while their company burns, it's obvious that this idea is as wrong as you can possibly be without being even slightly right. Sure, Ford and GM's cratering market share means they'd have no problem dealing with antitrust regulators. Sure a Ford-GM Axis of Angst might prompt some generous federal handouts. But they'll get those anyway. And these two companies' combined debt is larger than Mexico's national debt. Literally. So, this bone-headed idea isn't going to go any farther than it did back in 2006 , when GM's Fritz Henderson met with Ford's Don LeClair to discuss a possible merger. So… will the GM executive/board member who suggested this idea please stand up? We have an award for which you will be nominated.

As part of its Great Five Year Plan For Great Leap Beyond Carbon Economy, the California Air Resources Board (CARB) will require "Environmental Performance" labeling for all new cars sold in the state, starting in 2009. "Consumer choice is an especially powerful tool in our fight against climate change," CARB chair Mary Nichols insists. We'll gladly concede labels are a far less draconian approach than what one might otherwise expect from an unelected environmental agency with a broad mandate and an $800m budget. But if CARB really wants to give its labels a fighting chance, they should ditch the laissez-faire and mandate permanent labels. That must be visible from twenty yards. Then they could decriminalize keying vehicles which score below a four on "Smog" and "Global Warming." And casual observers wouldn't have to look up your eco-friendly car's EP score at driveclean.ca.gov. Especially when that website is "temporarily down for maintenance," as it was at the time of writing.

Automotive News [sub] reports that Pininfarina is building a one-off based on Rolls-Royce's unobtainable Phantom Drophead Coupe. The Pininfarina Hyperion is a stylish convertible boulevardier built for a mysteriously unnamed private collector. The Hyperion will debut at the Pebble Beach Concourse d'Elegance this August. No word on what this monument to excess will cost its lucky owner, but given the bloated price points of other Italian reskins of the latest and hottest, one can only expect a price tag that would make Croesus blush. That saidm, besides a fresh new Italian suit, the Hyperion doesn't offer anything that's not available at the Drophead's if-you-have-to-ask price of $412k. Besides envious looks at even the toniest of locales, of course. Which we can all agree is more important than mere money.

A widely touted goal of the environmental movement: increasing American's percentage of renewable energy use to 25 percent by 2025. According to a report by the RAND corporation, meeting the so-called "25 by 25" goal without significant consumer cost will require "major technological developments." Green Car Congress reports that 9.5 percent of electricity and 1.6 percent of motor vehicle fuel currently comes from renewable energy sources. The RAND report identifies biomass and wind energy as the two greatest opportunities for meeting the 25 by 25 goal. But it also points out that both require significant improvement to make a low-cost impact on renewable energy usage. For motor vehicles in particular, biomass-based (non-foodstock) "second-gen" biofuels must become significantly cheaper and more prevalent. Reducing renewable fuel goals to 10 or 15 percent by 2025 would also disproportionately reduce consumer expenses. Then again, the higher the cost to consumers, the more competitive renewable fuels become. The preceeding was brought to you by the Energy Future Coalition of UAW Boss Ron Gettelfinger's "Marshall Plan" fame. Over to you, taxpayers. 

Toyota's dominance in hybrid technology has other OEM's straining to leapfrog on to The Next Big Thing. While GM tries to beat ToMoCo to the PHEV punch, Mazda decided to combine three imperfect technologies into one over-the-top rolling lab. By modifying a Wankel rotary engine to run on hydrogen, and then adding a hybrid system, Mazda's Premacy Hydrogen RE Hybrid wins the prize for the most complicated possible approach to high-efficiency motoring. But let's not condemn this franken-hybrid to the scrap heap of engineering excess just yet. Wards Auto has learned that the Japanese Ministry of Land Infrastructure and Transport has given the Premacy Hydrogen RE Hybrid permission to undergo testing on Japanese roads. Of the three systems, hybrid technology is clearly the most promising. But Mazda's blind technophilia has mated it to an immature fuel source and an inherently inefficient ICE. Who cares that it gets 124 miles from a tank of hydrogen and boosts power 40 percent over a "standard" hydrogen Wankel. Mazda plans on leasing these people-movers in Japan later this year. Here's hoping that the lease comes with an uncompromising warranty.

We've argued for some time that OEMs should respond to high fuel prices by improving and lightening existing models and drivelines, rather than developing moon-shot, "game-changing" technologies. Et voila! Green Car Congress reports on the Pintle Regulated Venturi (PRV) induction system, developed by PRV Performance. The PRV-9 induction system is a bolt-on replacement for stock intake manifolds. By inducting air through a venturi throat, the doo-hickey burns a high-velocity homogeneous fuel-air blend more efficiently than standard induction; eliminating throttling losses and improving fuel vaporizing, precluding cylinder wall stratification. [You can read all the gory technical details at Green Car Congress] PRV Performance tested its intake on a JDM D15B SOHC-equipped Honda Civic, driving it at a steady 65 mph on a hilly 203-mile test run. The Civic achieved a reported 52 mpg, up from 41.7 on an unmodified Civic, with similar reductions in pollutant emissions. The EPA has tested an earlier prototype at 48 mpg, and will test this newer system later this year. PRV Performance claims that the technology is hybrid-compatible.