When we heard that Saab’s deal with the Chinese automaker Hawtai had fallen through, our initial reaction was a complete lack of surprise. My take was that Saab’s attempts to seek Chinese White Knight from the ranks of that country’s smaller automakers was doomed to fail, as the Chinese government has made it clear that it would like to see its auto industry consolidate. As with all things Chinese, however, I should have consulted more closely with Bertel before writing. Our man in China was quick to point out that the Beijing scuttlebut blamed Saab’s lack of intellectual property, rather than government consolidation rules, was to blame for the collapse of the Saab-Hawtai deal. And sure enough, Automotive News [sub] reports today that

Sweden’s Saab Automobile failed to secure investment from Hawtai Motor Group because of “commercial and economic realities,” not a lack of government approval

And, it turns out that’s the nice way of putting it…

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Despite being on something of a roll product-wise, Ford has just experienced its second run-in with Consumer Reports, which failed to give Ford’s new Explorer a coveted “recommended” rating. Why? CR explains its decision in Automotive News [sub] thusly

“The engine is a little noisy, handling is secure but lacks agility, and the driving position is flawed,” the magazine says.

“The optional ‘MyFord Touch’ control interface is over-complicated and distracting,” the magazine says, echoing ongoing complaints about Ford’s family of in-vehicle communications systems.

But there’s more.

“The six-speed automatic is not the smoothest out there and wants to hold on to higher gears too long. It was sometimes slow to downshift and overly aggressive engine braking slowed the Explorer going down hills unless we gave the gas pedal a prod.

“An optional Terrain Management system for the all-wheel-drive system lets you dial in various terrain types such as snow and sand, and it alters throttle, brake and torque split between front and rear wheels accordingly.”

Finally, the latest Explorer is too new to be recommended, the magazine says.

But here’s the kicker: as our “Crossover Report” proves, the Explorer killed the competition last month, outselling every other midsized and large CUV on the market. So, is CR right to rate products like Toyota Highlander Hybrid, Ford Flex, Acura MDX, Volkswagen Touareg, Hyundai Veracruz, Subaru Tribeca, Kia Sorento and Mazda CX-9 higher than Explorer? Or is this yet another example of CR’s well-disguised but often-noted bias against American cars? Is CR right about the Explorer, or is the market?

There’s an old saying that goes something like: “money talks and bullshit walks.” We don’t necessarily subscribe to it completely here at TTAC, where words pay the bills, but you have to admit that no amount of talk could make the same impact as news that GM’s CEO Dan Akerson has dropped nearly $1m of his own money on GM’s underperforming stock. I bring this up because, for the first time ever, you can now buy CARZ, which in addition to being an awful Sir Mix-A-Lot song is the first-ever auto industry index fund. Specifically:

CARZ is designed to track a basket of reputable car makers in the United States and rest of the globe. The fund’s 30 holdings present as a who’s who of the car industry, with Daimler, Ford, General Motors, Honda and Toyota comprising the top five positions. Together, these and the rest of CARZ’s top 10 holdings represent close to 60% of its assets

But, while it’s one thing for a CEO to bet on his own company (or anyone to bet on any company they believe in), investing in the industry at large is a very different gamble. Which raises an interesting question: having destroyed billions of dollars of value in recent decades, and proved itself to be vulnerable to all kinds of unpredictable events in the shorter term (think: recalls, credit crunches and and tsunamis), is the auto industry as a whole really worth gambling on? I’m not sure I’m entirely convinced…

If there’s one potent symbol of the less-than-entirely-glamorous aspect of automobiles, it’s traffic. Our insistence on private transportation, though ultimately liberating, disconnects us from our fellow citizens, and pits us against each other as we madly pursue our individual lives. And once we’re in traffic, nothing, nothing can break us out of the every-man-for-himself dynamic that actually keeps traffic moving. Well, unless you happen to live in Israel.

Monday was the Israeli holiday of Yom Hashoah, a day of remembrance for those who died in the Holocaust, and to mark the occasion the entire nation halted its business at noon for a moment of reflection and prayer. At that moment, Israel roads ceased to be a battleground and became a place of community. The people who share each others traffic every day stopped everything and joined their fellow motorists in profound moment of unity. For such a relatively simple gesture, this video [via Hooniverse] proves that the sight of traffic coming to a halt creates an incredibly powerful message. Just try to watch without getting a few goosebumps.

Crossovers, almost by definition, are hell to segment. This month we’ve taken commenter NulloModo‘s suggestion for separating mid- and large CUVs, so please direct all praise and criticism of this month’s segmentation to him. And then, just to piss everyone off (and save time for other, more interesting work) we’ve lumped all the luxury CUVs of every category into one giant, barely-legible chart. Is it perfect? No. But then, neither are crossovers. And like crossovers these charts will get the job done, even if they don’t wow anyone in the process.

Russian President Vladimir Putin has spent much time and many rubles trying to turn around his nation’s struggling automakers, particularly AvtoVAZ, the makers of the infamous Lada brand. Putin is, after all, a deep believer in the national importance of automaking… which is why he drives a Lada himself. But Putin is also shrewd enough to know that automotive patriotism can have some nasty side effects, which is why his Lada has had its engine discretely swapped for an Opel mill. But apparently Putin hasn’t learned to completely insulate himself from the embarrassment that the Russian auto industry appears to manufacture with at least as much efficiency as it manufactures cars. At the launch of something called the Lada Granta, Putin’s struggles to even start the car were caught on video and posted at Jalopnik. The Moscow Times makes no reference to the humiliating episode, but mentions that Putin hinted darkly to the assembled journalists that the Granta’s trunk could fit “easily take two sacks of potatoes.” If you know what he means… and trust me, anyone who’s been to Tolyatti before does.

Is it an Elantra? A Sonata? The answer is neither… this is the sedan version of Hyundai’s “Mr Euro” i40, which launched first as a wagon. It’s the “Korea-Passat” that hopes to show up the “Kraut-Passat,” while taking the brand into the entry-premium space that the Passat CC helped define. And it looks every bit as good as you’d hope an Elantra-Sonata mashup might. Meanwhile, Euro-phile car lovers the rest of the world over now get to deal with the strange phenomenon of having to lust over Hyundai’s forbidden European fruit.

Saab’s deal with the Chinese automaker Hawtai has failed in a predictable manner, as the struggling Chinese partner apparently didn’t receive government approval for the deal. Saab-Spyker’s announcement of the deal’s collapse explains [via AN [sub]]

Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect. The parties will continue their discussions about a possible cooperation, however now on a non-exclusive basis

This isn’t the first time that the Chinese takeover of a Western brand failed due to the Chinese government’s insistence on industry consolidation, as the Hummer-to-China deal failed for similar reasons. Meanwhile, we should have seen this coming a mile away…

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BMW’s Dreier continues to be the dominant force in the smaller “mid-luxury” segment, while archrival Mercedes controls the large luxury segment (chart after the jump) with its E Class. But the bigger story? Lexus’s incredible vanishing act, with both the ES and IS drooping under the German onslaught. Cadillac’s CTS beat the Audi A4 sedan, but add the A5 in (as the CTS, 3-Series and G37 all include coupes) and the Caddy drops to fourth place for the month. Ultimately, though, the Mercedes, Audi, Cadillac and Infiniti may switch places month-by-month, but all four are clearly stuck vying for the role of best 3-Series alternative. Meanwhile, the large luxury sedan market would thrill for even that level of competition…

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Rated at between 21/28 (2.5l, manual) and 27/34 (2.0l, auto), the Nissan Sentra is a fairly efficient car, albeit rapidly falling out of contention with its new 40 MPG competitors. Using a computer simulation, the developers of the “split-cycle” Scuderi engine showed that their unique, downsized, turbocharged engine can improve up to a 35% improvement in a “stock” Sentra’s fuel economy, when paired with the firm’s AirHybrid system. It’s not clear, even after listening to a podcast with VP Steven Scuderi, which engine-transmission combination was simulated as the “stock” baseline, but for practical purposes the best-performing Scuderi engine (tuned to match the “stock” engine’s power) achieved between 40 MPG and 32 MPG combined (around 50 MPG CAFE combined, or approaching the 2025 standard). Or, not. The EPA city test reportedly does not show improvements with idle fuel shutoff (stop-start), but Scuderi’s simulated stop-start system shows a 14% improvement over the non-start-stop “stock” Sentra on the same FTP-75 test. Was Mazda bluffing (it’s since said it would bring stop-start to all its cars), or is Scuderi’s simulation off? Scuderi (which has nondisclosure agreements with 11 OEMs and is in discussions with 4-5 more) says it will release more information next week at the Engine Expo 2011 in Stuttgart, Germany.

Apparently possessing the institutional memory of sperm, the auto media is once again trotting out the 50-year-old rumor that will never die: OMG, the new Corvette is going to be mid-engined! Or, as we are so fond of saying around here, not. The madness started earlier this week, when GM North America boss Mark Reuss blew his dog whistle by hinting that the C7 Corvette would be “completely different.” The media needed no further encouragement to trot out the mid-engine rumor once again. As Paul Niedermeyer has pointed out, the mid-engined ‘vette speculation has been an industry institution since Zora Arkus Duntov posed proudly with his CERV I concept in 1959.  Besides, Corvette engineers have been emphasizing the C7’s evolutionary nature for some time. Reuss’s hints could be about something as mundane and pre-signaled as a split rear window, or as out-there as Two-Mode hybrid option. Hoping for more is, I fear, would amount to a failure to learn the lessons of history.

Yesterday evening I directed some ire at President Obama’s continued reliance on ethanol as a major plank of his do-nothing transportation/energy agenda, noting

That extra money for 10,000 E15-capable pumps? That’s because no gas station owner will pay to install a pump for a kind of fuel that only cars built since 2001 can use… and which the auto industry has tried to ban. And why E15 in the first place? Because blenders can’t sell enough E10 to blend the government-mandated amount of ethanol and collect their $6b this year in “blender’s credits” to do so. A subsidy to support a subsidy which in turn props up yet another subsidy (I may have missed a subsidy in there somewhere). You can’t make this stuff up.

The “cornerstone” subsidy that all other ethanol subsidies support is the Volumetric Ethanol Excise Tax Credit, or VEETC, or “blender’s credit,” a $6b per year subsidy that directs 45 cents to refiners for every gallon of ethanol they blend with gasoline. The VEETC nearly died in December’s lame duck session, only to be revived as a way to buy votes for the President’s tax policy. Now, however, The State Column reports that a bipartisan Senate bill has been introduced that would eliminate both the VEETC and import tariffs on foreign-made ethanol. And with a rash of bad news coming out about ethanol, this could just be the opportunity to kill this wasteful government subsidy with fire.

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As the graph above [via NHTSA’s latest CAFE data, in PDF here]  shows, passenger car fleet economy has actually leveled off after a brief spike in recent years. Possibly even more surprising is the fact that imports spent a portion of the last decade actually beating the imports in passenger car economy after a 20+ year slide in import CAFE performance [more long-term fuel economy charts here]. These trends illustrate that the sides in the emerging “Battle of 62 MPG” may not as easy to characterize as you might think… as does a new hint from NHTSA about the shape of future CAFE increases. According to the Detroit News, NHTSA is signaling that

it is researching the impact of raising fuel efficiency in the 2 percent to 7 percent annual range.

The agency said it has “tentatively concluded” that 7 percent annual increases is the maximum that is technically feasible.

Before it sets a requirement, NHTSA must take into account a number of factors, including the costs of the regulation and safety impacts.

NHTSA and the Environmental Protection Agency said previously they are working together on 3 percent to 6 percent annual increases.

The high end of that range would result in the much-discussed 62 MPG by 2025 standard, an achievement the government insists would only cost as much as $3,500 per vehicle. The industry points to cost estimates closer to $10,000 per vehicle for that level of CAFE increase. The battle continues…

Some taxpayer-funded turnarounds just have a little more turnaround than others, according to the GAO’s recent report on the auto bailout [PDF here], which tracks the progress of the Detroit patients and considers their futures. Sure, GM received quite a bit more government money than Chrysler, but the improvements in GM’s financial performance compared to Chrysler’s are clear. But the GAO still has a number of concerns about the “more than $34 billion” of taxpayer value that’s still floating around, unrecouped, in the rescued automakers. Feel free to peruse the GAO’s full 59-page report, or you can hit the jump for the highlights.

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We’ve seen the next-generation of front–drive Mercedes hatchbacks in both heavily-camo’d and concept forms, but now thanks to automobilemagazine.fr [via Auto Motor und Sport], we have what appears to be the first look at a production version of the Mercedes A-Class. From some angles it looks fantastic… while from others, it reminds a little too much of a Subaru Impreza. Either way, Americans won’t have to sweat the details when it comes to this bodystyle, as we will be receiving this chassis only in Coupe, Sedan and CUV format. Still, this vehicle will be of major importance to the Benz brand in nearly every other market around the world. Plus, it’s the first time Daimler has entered into direct competition with Audi’s A3 in the Compact class. And all told, Mercedes seems to have done a fairly effective job at transmitting its rear-drive-oriented design language into the front-drive hatch segment.