Automotive News (sub) has a headline that the industry will likely latch onto as it continues its PR campaign to beg for federal funds to offset coming increases in CAFE requirements. And there's little denying the Global Insight research that says that CAFE compliance will cost American automakers considerably more than their Japanese counterparts. The Detroit three can expect to pay some $30b bringing its fleet up to the 31mpg average mandated by 2015, while Japan's big three will pay only about $14.85b to meet the standards. That's less than GM alone is expected to pay, according to Global Insight. The "fast start" 2015 goal is blamed for much of the expense, as it allows little flexibility for product planning, mandating a short-term 25 percent jump in efficiency, to be followed by a total 40 percent improvement by 2020. But wait, that still doesn't explain why Japan's companies can expect to pay so much less for CAFE compliance than Detroit. Is currency manipulation saving the Nipponese bottom line? Secret manufacturing techniques? Did someone hire Godzilla's lobbying firm? Actually, the reason comes in the form of a single-sentence paragraph. "Japanese automakers won't be hit as hard because their fleets already are more fuel efficient." How is that fair?

In an interview with Auto Motor und Sport, Alfa-Romeo boss Luca De Meo revealed plans to relaunch as a global brand, an effort which involves offering a new SUV in 2010 and eventually, hybrid options. With potential customers in China, Japan, Australia and the U.S.A. in mind, de Meo wants to increase volume with the Mi.To, earn respect with the 8C Competizione, go green with stop-start technology, and pander to American tastes with an SUV. The SUV, currently in development under the name CX-over, will be "compact" says de Meo, with a production goal of 40k units per year and a price of about $40k. De Meo seems unfazed by the dismal American market (particularly for SUVs), which Alfa will likely enter in 2010, saying he is "convinced that no brand can afford to not be represented there." De Meo admits that decisions about a dealer network haven't been made yet, and that the firm still needs a large sedan, an automatic transmission and a six-cylinder engine to achieve its strategic goals. Interestingly, Alfa will  forgo a major marketing campaign. "Alfa Romeo is not a brand that requires huge marketing budgets," says de Meo, "the brand is known worldwide." Yeah, for frequent breakdowns, insufficient dealer networks and head-spinning depreciation.  Saying Alfa will never be an "Eco-brand," de Meo nonetheless sees stop-start technology as an unobtrusive way to improve efficiency, and will offer it in 2009 or 2010. Hybrid options are much further off, and will come from Fiat's developments of the technology.

Automotive News (sub) reports that Toyota is investing $673m in new Japanese battery facilities, with the goal of building one million batteries per year by 2011. A new nickel-metal hydride plant is planned for northern Japan, and a new lithium-ion plant will be built southwest of Tokyo. They're also adding to an existing metal-hydride facility as Toyota expands operations to meet the million hybrid vehicles per year demand it expects in the next decade. Toyota's batteries are built by Panasonic EV Energy Co, a joint venture between Panasonic and Toyota. Details are not currently available for the two new plants, but once expanded, the existing metal-hydride plant will build 300k batteries per year. Reports indicate that lithium-ion production will not exceed the tens of thousands, indicating that Toyota will continue to rely on its proven metal-hydride technology for most hybrid applications. With Nissan jumping into lithium-ion production, and Honda announcing an increased hybrid lineup, Toyota's investment is a necessary step in building on its enviable lead in hybrid production. With about 430k hybrids sold last year, and sales of the gas-electric whips rising at a steady clip, Toyota should have few problems selling a million hybrids annually within the next five years.

Since it began, TTAC has called on all automotive publication to publish disclosure of all manufacturer-provided travel, lodging, food and gifts. The worst offenders: car sections of local newspapers. And no wonder; they remain one of the few profitable portions of many otherwise failing publications. To wit: Joe Clark's [Fawny Blog] take on the Toronto Star's Wheels section. Calling Wheels "a giant moneymaker" for the paper, Clark links to an editorial where the paper agrees that "accepting free travel to preview cars is not ethically or journalistically sound." So  no car junkets, right? Wrong. The Star simply hires freelancers and "outsources unethical behaviour." A quote from freelancer Ted Laturnus in an article in the Ryerson Review Of Journalism says it all. "All I can say to the people who think we shouldn't be taking free trips is, 'Go fuck yourself. Come back to me when you've grown up.' They don't know the side of reality to this business. I do. I've been in it for 20 years. I have no patience for that sorta thing. It's the way the game is played." Note to Ted: we're here to change the rules.

The Center for Automotive Research (CAR) at Gelsenkirchen University of Applied Sciences has released a report which claims that 2007 will have been the historical high-water mark for diesel sales in Germany. Reported in Auto Motor Und Sport, the study shows a steady climb in diesel market share over the last decade, from 14.6 percent in 1995 to 47.7 percent in 2007. But CAR calculates that market share will retreat to 44 percent by 2010 before diving back to 30 percent by 2020. With US diesel sales still a ways from a predicted 15 percent market share by 2015, Germany is still the major, which is why the projected decline is so significant. The underlying causes are simply related to the shrinking economic incentives for buying diesels. Diesel has traditionally been cheaper than gasoline in Germany, but that difference is slipping away and in America diesel is significantly more expensive. Additionally, diesels require increasingly complex particle filters and exhaust cleaners to meet new emissions standards, driving up purchase costs. Finally, gas engines are simply becoming more efficient, especially as hybrid drivetrains proliferate. In short, if diesel's most favored market is moving away from the stuff, this trend will only grow. With news coming in that VW's new Jetta TDI won't be as efficient as the Prius, don't expect diesel sales to jump stateside anytime soon.

It turns out that Chrysler does have assets worth selling. Automotive News (sub) reports that Mercedes has agreed to purchase Chrysler's recently-shuttered Pacifica design center in Carlsbad, California. The 35k square foot building was listed at $7.3m, but with neither side commenting on the terms of the sale, one has to assume that Mercedes (once again) took advantage of its erstwhile partner. Mercedes already has a design studio some 51 miles away, in Irvine CA. At less than half the size of Pacifica, the Irvine design studio will likely merge into the newly acquired building, although Stuttgart is staying mum on the topic for now. Pacifica was responsible for some of Chrysler's most successful designs, from the 300 to the Challenger, from the Plymouth Prowler to the eponymous Pacifica. Of course they also designed the Dodge Intrepid and the Jeep Compass, so… maybe it's not a huge loss after all.

Think a Bugatti Veyron is pretty exclusive, what with its million dollar plus price tag? Maybe you think the new Rolls Drophead Coupe is a rare bird? In reality, all you need to roll down the street in one of these dream whips is money. Green Car Congress reports that only 200 drivers will "win" the right to lease a hydrogen fuel cell-powered FCX Clarity over the next three years. Oh wait, Honda's splitting the number between Japan and Southern California. So far, over 50k Californians have applied for a hydrogen-powered "it"-mobile. O.K., yes they'll need some money; $600 per month. The first cut will reduce the list to approximately 500 people who live near designated (if unbuilt) hydrogen fueling stations in Santa Monica, Torrance and Irvine. The chosen ones will receive an e-mail prompting them to take a customer selection survey. The Zero Emission [at least at the tailpipe] Powers That Be will chose the final 100 lessees based on driving patterns, vehicle needs, vehicle storage and– OK, again– financial criteria. Oh, that's after "an interview with Honda America." Yeesh. Maybe if they find out that you also own a Toyota, they'll vote you off "Clarity Island."

How does a company with $1.3b in 2007 sales disappear by the second quarter of 2008? By trying to supply parts for the D3. The Detroit News reports that bankrupt parts supplier Plastech is extinct. The company will sell its manufacturing operations to Johnson Controls (JCI) and auction off the rest. Plastech will close plants in Ontario, Ohio, Indiana, Tennessee, Louisiana and Michigan, laying off some 1500 employees. Global Insight analyst Aaron Bragman says The Big 2.8 are "breathing a sigh of relief" at the decision: "they will be much happier to deal with JCI over Plastech." As to who will scarf-up Plastech's assets, Bragman expects a "Chinese or Russian buyer." "The root cause of these problems," says IRN's Merkle, "is that [the Big 2.8] will take a company out of business to squeeze 3 or 4 percent out of the price rather than looking at long-term interests." Look for more short term thinking as Chrysler works to slice 25 percent out of its supplier costs.

The Nikkei [via Business Week] reports Japanese Domestic Market (JDM) new car sales have improved slightly in the first quarter of 2008. But the number of automobiles on Japanese roads has fallen for three months straight (down 0.2 percent last quarter). That's the largest cumulative dip since record-keeping began in 1963. The Japanese government predicts traffic will peak by… 2010. Japan's population is slowly declining. More importantly, the cost and hassle of car ownership in the densely-populated island nation is driving people to alternatives. Imagine paying $400 per month on a Tokyo parking spot, and you're beginning to get the picture. As world governments milk the four-wheeled cash cow in the name of planet saving, expect more lower and middle-class motorists to be priced right off the roads. Japanese consumers bought some 282,600 Electric bicycles last year, up some 40 percent in the last five years. sts priced off the roads. In one of the worst first quarters for auto sales in recent memory, the U.S. scooter market jumped 23 percent, according to the L.A. Times. The times, they are a-changing.

Concerned that demand for "green cars" could be fueling marketing gimmickry more than real improvements, Auto Express UK ran a test of seven supposedly low-carbon cars (full results not available online) with interesting results. The Times Online reports the test revealed that several vehicles perform much worse in the real world than their manufacturers claim (and repeat ad nauseum in marketing material). One such offender is the VW Polo BlueMotion, which was launched as "Britain's cleanest car" with a claimed C02 output of under 100g/km. In the Auto Express, the Polo failed to achieve its lofty benchmark, and received low scores. Honda's Civic Hybrid has a claimed C02 emission of 109g/km, but in testing it delivered 171g/km, enough to bump it into a higher carbon tax category. The Lexus GS450h claims an impressive 35.8 mpg, but delivered only 26.7 mpg in Auto Express' tests. Ford's ECOnetic 1.6 diesel Focus returned about 45 mpg, a good 20 mpg off the 65.6 mpg claimed by the manufacturer, although carbon output is decreased compared to standard Ford diesels. In short, carbon emissions and fuel efficiency are almost universally overestimated and hyped in marketing efforts. While EPA ratings are often better than anyone receives on the road, we don't base vehicle taxes on carbon output. With tax incentives in place for less-polluting cars, Britain's government will probably want better verification of actual C02 output levels going forward.

With the nastiest auto biz strike of the year (so far) almost, not quite behind it, American Axle is looking away from its eponymous home country for future business. Automotive News (sub) reports that the axle supplier has already established itself in developing markets like Brazil, China, Mexico and Poland, and is looking to expand in Thailand and India. Thailand is the second largest pickup market after the U.S., and American Axle is looking to take over axle supply there for locally produced Chevy Colorado pickups. While company officials declined comment, GM is AA's biggest customer, and as AN points out, "the company does not build foreign plants without the promise of future business." With the Thai pickup market set to increase seven percent this year, and American truck and SUV sales already down 28 percent on the year, this has "inevitability" written all over it. In India, AA's first plant is just coming online, and there's already talk of a second. AAM Sona Axle Private Ltd, the joint venture with Sona Koyo is building a new corporate headquarters in Pune, India and there's talk of building a greenfield plant to supply Tata Motors. With at least two U.S. plants set to shut down in the wake of the the AA-UAW agreement, the American Axle name is beginning to develop a bitterly ironic ring. Is a generic supplier name-change (Visteon, Delphi, etc) in the offing?

While FoMoCo puts lipstick on Volvo in hopes of a quick sale, it's quietly bringing several Ford Europe models to the U.S. in the hopes of reinvigorating small car and crossover sales. The Ford Fiesta imminent arrival is no secret, but Automotive News [sub] is reporting that Ford's next U.S. Focus will be European engineered on the global C1 platform. Ford's C-Max and Kuga– a pair of C1-based crossovers reflecting minivan and SUV influences (respectively) in the segment– will join their Euro brethren on this side of the pond. AN Europe [sub] spoke with Ford America President Mark Fields, who confirmed the importation schedule. "We really have to have the right cadence (and) marry up the cadence of freshenings between Europe, Asia-Pacific and North America," says Fields. "Leveraging scale by using common suppliers, you can't have one part of the world freshening a vehicle and assuming a year later another part of the world will do that." The range of FoMoCo's "Kinetic Design" kids heralds the demise of the current, lamentable Ameri-Focus and aged Escape. And not a moment too soon. But is it soon enough?

Green Car Congress reports on a recent test of the Merritt Unthrottled Spark Ignition Combustion (MUSIC) engine by Powertrain Technologies. "MUSIC is an un-throttled, high thermal efficiency, lean-burn, spark ignition system that uses an indirect combustion chamber to produce charge stratification by means of controlled air management" the unelected reporters reveal. In laypersons terms, a trick cylinder head with an external combustion chamber and twin injectors were fitted to a 2.0 Ford Duratec engine, allowing more efficient fuel-air mixtures and (diesel-like) unthrottled operation from idle to full load. There's no sense in trying to break down the technology any further, because it's complicated enough to make HCCI look like the Flintstone car. The upshot: the MUSIC engine delivered 20 percent better efficiency than a standard Duratec in the urban cycle, with an even better 42.5 percent improvement at near idle speeds. The downside? Power is cut nearly in half, delivering only 50 hp (from a two liter engine) at 4k rpm. Developers claim their results could improve with better injection equipment, but add the cost and reliability issues and you have a yourself a hefty engineering to-do list before this technology hits the streets. 

Unless you don't live, breathe and sleep auto industry goss, you know high gas prices and a construction industry slowdown have killed sales of full-size pickups. Not a moment too soon, Ford is developing a new, more efficient pickup to fit between the F150 and the Ranger. Dubbed the P525, the lighter vehicle's based on the F150 frame, likely powered by one of Ford's new Ecoboost turbocharged V6s. "Sources" tell Automotive News [sub] that the pickup (which could carry the old F100 nameplate) is in Ford's product cycle plan, awaiting final approval. Will this new pickup will replace the Ranger, which could go out of production when Ford's Twin Cities plant shuts down in 2009? Hell if I know. But with revised CAFE regs looming, the new pickup is more likely to replace the F150 as Ford's volume truck (the current F150 returns between 13 and 20 mpg depending on trim). If the P525 graduates from development, expect "unique sheet metal and innovative storage space." We'll be a little more concerned with the weight and miles per gallon.

Since winning Le Mans with a diesel R10, Audi has been surprisingly shy about emphasizing diesel motorsports as part of its brand. That's starting to change; Audi's been showing versions of its R8 supercar with a 6.0-liter diesel V12 at auto shows. Und now… the A3 TDI Clubsport. This oil burning trackmeister is set to debut at the Lake Warther tour in Austria. Powered by an uprated version Audi's 2.0-liter TDI four-banger– making mit ze 224-hp and 332 lb-ft of torque– the hot hatch should scoot to 60 mph in 6.6 seconds. Quattro all wheel drive, a six-speed transmission and six-piston ceramic brakes round out the formidable platform. The usual boy-racer accoutrements adorn the exterior, from giant bolt-on wheel arches to a DTM-style spoiler, to 20" rims and a custom paint scheme. You want to buy one? Dream on– although Audi is prepping a roofless TT Clubsport for sale in 2010. With a TDI TT on sale now in Europe, there's a chance the TT Clubsport will offer the breathed-on diesel as an option. Or better yet, Audi may actually build the A3 TDI Clubsport as part of a whole line of Clubsport models. Normal, S-line, S and Clubsport. You pays you money, you take your depreciation…