New car sales in Japan have dropped for the fifth straight year, to their lowest level since 1975. Thomson Financial (via Forbes) cites a Japan Automobile Dealers Association study which points to high gas prices as the prime culprit in recent sales losses. Even Japan's 660cc kei car category is feeling the hurt, dropping for the twelfth straight month. Japanese automakers have been fighting sliding sales aggressively, rolling out new models and pouring money into marketing gimmicks like Toyota's Auto Mall . But there's nowhere to run in such a saturated market. Honda, Nissan, Subaru and Suzuki posted modest sales gains in March, while Lexus dropped nearly 18 percent, Isuzu dropped 12 percent, and Mitsubishi lost nearly 14 percent of sales. The biggest losers? Truck manufacturers, who saw between 12 and 27 percent losses. If economic misery loves company, America and Japan could be best of friends.

It's not shocking that Jay Leno was the first guy NBC called to front their version of Top Gear. Leno's the biggest auto enthusiast in showbiz on this side of the pond, and like any good gearhead he loves the show's no-holds-barred, enthusiast approach. But Leno thinks that Top Gear won't work on American TV, and he penned a column for the Sunday Times of London where he says so– Jeremy Clarkson style. The American version of Top Gear was pitched to Leno by an unnamed honcho (who didn't know the name of the show) as ""Well, like, one week you build a car that flies and the next week you make a car that goes under water." Leno knows how Clarksonian slams go over on networks where the sponsor is king. "When Jeremy rips into some sponsor such as Ford or Chrysler, well, that's the last time they sponsor that show. Then what you have is 'the meeting' after the show, where they tell him to tone it down. That's just not what they do at Top Gear." Fearing a lethal combo of stunts, advertainment and a firm pair of editorial handcuffs, Leno passed on the job offer. "Cars are my hobby. Television is my job," says Jay. "For me, my great release from any sort of pressure is to go to my garage." And who can blame him? As great as Jay would be as an American Jeremy Clarkson, we would hate to see America's gearhead end his public love affair with the automobile over "that meeting." [Hit tip to QuasiMondo and AutoBlog for the link]

California state Senator Dean Florez has introduced a bill to repeal the the San Joaquin Valley Unified Air Pollution Control District's exemption from state emissions tests for vehicles made before 1976. The District includes eight counties in California's Central Valley, which are home to a number of now highly pissed-off tuners, hot-rodders and retro gearheads who are mobilizing to fight the new restriction. The usually apolitical Hot Rod magazine blog has posted an action alert by aftermarket industry association SEMA, urging fans of malaisemobiles and other oldtimers  to contact their representatives and protest this proposed law. Asserting that "Pre-1976 vehicles constitute a small and shrinking portion of the overall vehicle population in California and are a poor source from which to look for further emissions reductions," the SEMA bulletin warns that should this measure go through, the whole state could go on to force newly registered pre-'76 cars to undergo smog checks which they would be unlikely to pass. This should make for some interesting protests.

Bloomberg reports that Ford is investing $165m in its Essex Engine plant in Windsor, Ontario.  The plant, which has been shuttered since November, will produce an unnamed new Ford engine, and will return 300 jobs to the province. The plant refurbishment was made possible by a $16.5m investment by the Ontario provincial government, or about $55k per job created. Although Ford refuses to comment on exactly which engine will be produced at the plant, timing seems to indicate that the new EcoBoost line of turbocharged, direct-injection engines could be a prime candidate. With the first EcoBoost V6 set to debut as an option on the Lincoln MKS in 2009, and planned as an option across the Ford line aimed at lowering fleet fuel consumption, this EcoBoost is a rare investment at a time when Ford is trimming its manufacturing profile. The Canadian Auto Workers have been angling for a Ford engine project for some time, although CAW President Buzz Hargrove hinted that a fuel-efficient 5-liter engine might be in the works for Windsor. Whatever the engine, this is big news for the CAW, which lost a quarter of its D3-employed membership in the last three years alone.

Michigan-based ForeSee Results has set a new record for weirdest company name developed the first Automotive Website Satisfaction index, which shows that online car purchasing has plenty of room for improvement. The Detroit Free Press reports that Honda's website logged the best score among the six top brands in the 2,000 respondent survey, scoring an 80 compared to an industry-wide average of 78. The index uses methodology from the University of Michigan's American Customer Satisfaction Index and measures how effective the sites are in giving consumers the information they want, getting them into dealer showrooms and driving sales. With the the Detroit three, Honda, Toyota and Nissan all rating between 80 and 76, there's not much to differentiate between them, but there's plenty of opportunity for all six to improve to the 88 scored by Amazon.com. "You walk away from these Web sites feeling like they were designed by a committee," says Larry Freed, president and CEO of ForeSee Results. "There's a lot of noise on them."

As the "R"-word unfolds and American car demand plummets, Nissan will be idling Mexican production of its Versa and Sentra models. Reuters reports that the Nissan factory at Aguascalientes was shuttered last Friday, and will remain offline for seven days this month. The plant built an average of 26,000 vehicles per month last year, but will scale back work relative to American demand. Automobile manufacture is a mainstay of Mexico's industrial sector, and weakness in American car sales are expected to have a major impact on the Mexican economy. Although Mexican production grew rapidly in the first quarter of this year despite sluggish demand, plant idlings can be expected throughout the rest of the year, as the American economy goes through what is expected to be a particularly rough patch. Of course, if you own a '98 model year vehicle, you might still be able to get a factory trade-in…

For the first time since WWII, UAW membership has dropped below half a million hardhats, reports the Kansas City Star . The news comes from a Labor Department filing, which shows that the union was down to just 464,910 members by the end of 2007, compared with 538,448 at the end of 2006. This continues a trend of decline for the union since membership peaked in 1979, at 1.5m dues-paying members. Many of the losses can be tied to the dismal performance of the Detroit automakers, who have been cutting jobs, closing factories and buying out workers in hopes of returning to profitability. With American automakers tanking and taking their membership with them, the UAW is trying to rebound by targeting the North American factories of Toyota and Honda. But the transplants have carefully avoided building plants in union strongholds, and have thus far held off attempts to unionize their American factories. And no wonder. Although the UAW has done well by its members over the years, its colossal pension liabilities and uncompetitive approach to wages have been an undeniable factor in the decline of Detroit.

Human Resource Executive Online points out that the new Detroit "easy-fix" of buying out workers with pension-fund money might not be the greatest strategy ever. Chrysler and GM have both recently offered worker buyout packages, with money from overfunded pension accounts. The strategy is attractive, as workers can defer taxes on pension fund payouts to their 401k accounts, and corporate can keep their cash position intact. But overfunded pension accounts never stay overfunded for long, and observers say that intense market volatility makes now a bad time to risk underfunded pension liabilities. "The [Chrysler] fund is probably overfunded because of the over-inflated value of the stock or securities that have been invested," says Gerald Myers, business professor at the University of Michigan and former chairman of American Motors. "Now that the stock market and the real estate market is [sic] going down, it's not unlikely [the pension fund] will be underfunded in short order." Meanwhile, labor relations consultant Bill Adams of Adams, Nash, Haskell & Sheridan believes that buyouts in general merely mask major workforce problems. "The automaker is stomping on the ants, and the bears are walking off with the picnic," says Adams. "They can't dump the relationship with the UAW [so] they're going out of business and delaying the inevitable." Man does that truth hurt sometimes.

Canadian-Austrian venture Magna Steyr had a mini hit on its hands at the Geneva Auto show with its Mila Alpin. With no trucks on the market light enough for hybrid or EV conversions, the folks who developed Mercedes 4-Matic and built everything from the X3 to the G-Wagen wanted to give it a shot. Not only does the Mila Alpin climb 45 degree inclines, it's super light, designed to work with CNG, hybrid, or electric powertrains. More importantly, it's not aimed at fanboys. "Der Magna Mila Alpin ist so konstruiert," says Auto Motor Und Sport, "dass sich fremde Karosserieformen leicht auf der Plattform aufbauen lassen." It's built for others to build on. And just like that, Mercedes and BMW are talking joint project, in hopes of backing-up eco-friendly PR chatter on the (relative) cheap. BMW Development chief Klaus Draeger says talks with Magna Steyr are not about technical ability; they are about strategy and marketing. Mercedes confirms that they're schmoozing with Frank Stronach's boyz, but say their A and B Class cars were designed with "sandwich" floors to ease the adoption of alternative drivetrains. My gut says BMW will go for it. Their motorcycles prove they can go anywhere with their brand. A crazy Isetta electric off-roader would freaking rule.

The General has settled a class-action lawsuit claiming damages from its "Dexcool" coolant, agreeing to pay up to $800 each to customers who can prove damages. Plaintiff attorneys estimate that the final number of claims could top $20 million, a bill which would cost GM of hundreds of millions of dollars. "It could be multiple nine figures; it depends on how many people make the claim," co-counsel for the plaintiffs, Jack Brady tells the International Herald Tribune . "I think it could be a huge settlement." Of course, while the people who had to replace manifold gaskets and heater cores get between $50 and $800 for repairs, Mr Brady and his co-counsels will pocket up to $23 million in fees and $2.8 million for expenses. Still, if you own a GM vehicle with the 3.1-liter or 3.4-liter V6 engines for model years 1995 to 2003; the 3.8-liter V6 engines for model years 1995 to 2004; or the 4.3-liter V6 engines for model years 1995 through 2000 and have had to pay for coolant-related damages, you should check dexcoolsettlement.com to file a claim.

In one of life's little ironies, Volkswagen is this year's "Official Vehicle" of Adolf Hitler's forgotten brainchild, the Olympic Torch Relay. With riots on the streets in Lhasa and reports of terrorism threats in China already marring the feel-good "One World, One Dream" vibes, the torch run was supposed to be a major  PR effort for the Chinese government and major sponsors. But things are not quite going to plan. The Guardian reports that pro-Tibet protesters broke a "tight security cordon" at Thursday's torch lighting ceremony, and are now planning multiple protests along the relay route. The convoy has already been held up several times due to protesters lying in front of the Vee-Dubs, and the Greek government is upping security in response to specific threats over the weekend. And the caravan of love hasn't even come close to the Nepal area yet where soldiers are already deploying to deal with protests. Maybe someone just needs to let everyone know that it's all good, man… these are green Volkswagens.

With all of the downsides of corn-based biofuel now widely known, eco-friendly motorists are anxious to hear a little good news from the developers of so-called second-generation biofuels. One of the most promising of these new, non-food-based fuels comes from algae, which scientists have been breeding and researching since the Carter Administration. The March cover story at Green Fuels Forecast tells of the National Renewable Energy Labs Aquatic Species Program (ASP), which has been looking for biodiesel-producing algae since 1978, and is now providing the backbone of technology for some frenzied venture capital activity. When the program started, it was estimated that all of America's transportation and home-heating needs could be met by 15k square miles of algae farms. Of course in the 90's as petroleum costs dipped, the Clinton Administration axed the ASP in favor of further ethanol research. Now, the government's abandoned investment is attracting the big boys: Chevron, Shell and others are forming partnerships with start-ups who are building on the ASP's knowledge base. The upsides? Algae needs only sun and C02 to produce the oil which can be burned as fuel or used in a number of other applications which currently require petroleum products. In other words, the perfect fuel source for your favorite Waterworld-esque, post-apocalyptic fantasy.

CarDomain brings us the story of the Blade Runner , a battery-powered Hyundai Getz minicar which is the first vehicle recognized by Australia's Scientific and Industrial Research Organization as a domestically produced ZEV. For about $35k you get room for four, AC, powers steering, and a 62-mile range from pure electric power. The Blade Runner is the brainchild of Ross Blade from Harcourt Australia, whose Blade Electric Vehicles company strips the dirty gas-burning bits from the Getz and retrofits it with lithium iron phosphate batteries, regenerative braking and a 40kw electric engine. The Blade Runner even offers 880 lbs of towing capacity and a top speed of 75 mph, although the the 7 seconds to 62 kph (37 mph) must seem like an eternity when the kids are late for community gardening class. Still, the Blade Runner offers a peek at the burgeoning ZEV-retrofit industry, and a refreshing dose of reality in contrast to, say, the ZAP approach to bringing ZEVs to market.

The leader Chrysler's "Project D" effort to develop a Camccord fighter has resigned after "clashes with senior management. The Wall Street Journal calls Mike Donoughe "a star engineer," and there's no doubt that the project he was heading was a top priority. The Sebring/Avenger combo is dead in the water for Chrysler, and Donoughe had some of the best product development credentials in the company, having headed truck and SUV development. So how does a 24-year Chrysler veteran in charge of a premier development project find himself on the outside of Auburn Hills looking in? The WSJ won't quote anyone, but over at Autoextremist there's a rumor On The Table that "Acting Chief Innovation Officer" Peter Arnell was behind the drama. As long as everyone has plenty of room to swing their egos around, maybe Chrysler could get back to building competitive vehicles?

In another sign that some of the more profitable aspects of the domestic auto biz have little to do with actually making cars, the Oakland Business Review (via Mlive.com) reports that the industry demand is attracting computer graphics companies to Michigan. Computer Graphic Imaging (CGI) is used across the auto industry, from prototype development to sales and marketing, and companies which once focused only on California's film industry are starting to open offices specifically to serve automakers. And these companies offering digital imaging software are attacking traditional marketing firms, offering OEMs the capability to manipulate high-quality images of products and vehicles in-house for less than Madison Avenue charges. "The cost is really driving this industry. Plus, the benefit is you can do a lot more. You can dissolve the skin away of the car," says John Willette, partner at the CGI firm Armstrong White. Dissolve the skin you say? Bring the man a Sebring!