Fiat never had much luck in China, one of the few remaining growth markets on the planet. Neither had Chrysler. One word fits both: “Orribile!”

“Never say die,” says Sergio Marchionne (or in Italiano to that effect.) Today, he will try again. At a ceremony in Rome, flanked by China’s President Hu Jintao and Italy’s President Silvio “Daddy” Berlusconi, Sergio will sign a deal for joint venture with China’s Guangzhou Automobile Industry Group, Reuters reports. Hu Jintao is in town anyway to attend the G8 meeting. And what will they build together?

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You know this one is going to be good. Auto Motor und Sport says the two giants are having a little klatsch about platform and technology sharing, with typically crazy rumors flying out of the discussion. Mercedes hasn’t planned its next-generation A- and  B-classes yet, and Toyota is looking to rationalize its European production capacity. Could the Merc A/B end up sharing parts, platform or even production with future Toyota models? It sure looks like the possibility is on the table. But that’s not the weirdest rumor. There’s even talk of sharing costs between future generations of the Mercedes S-Class and Lexus LS. Plus Toyota is reportedly interested in Mercedes’ battery technology. Or is that Tesla‘s? As tempting as it is to simply dismiss this all out of hand as just another wild-ass rumor, the Aston Cygnet proves that Toyota is more willing to enter into ridiculous deals than you might imagine.

It’s BMW’s most efficient 3 series yet, which means it’s a brand-killer stateside Not to worry though, the new M5 will have 600hp. We’ll get that. Anyway, the two liter BMW oil burner gets 62.8mpg (52 miles per US gallon, non-EPA testing) and emits fewer than 120 grams of carbon per kilometer. Too bad it still starts at about $38K (in the UK). And takes 10.9 seconds to reach 62 mph. And since we’re in the realm of Euro-diesel fantasy, wouldn’t you just as soon cough up $40-42K for a 123d five-door? It may only get 50 mpg (41 US, etc), but it’s the first diesel to produce 100 hp per liter, and “a gem of an engine,” according to Autocar. Back in the stark reality of the American market though, that new M5 is going to have a twin-turbo V10. And in case that’s not enough, it will also boast a boost button based on the F1 KERS system. Good times.

Hydrogen-fueled propulsion has been the Next Big Thing since the 1970s. Recently, it has also been assigned to the past, at least by US Energy Secretary Steven Chu, who said, “We’re going to be moving away from hydrogen-fuel cells for vehicles.” Thus, hydrogen propulsion seems to be one of those things that are everywhere in the time-space continuum except in the present. Some hydrofans are refusing to give up, though. VW’s evil genius boss of bosses, Ferdinand Piëch, has a nephew, Sebastian Piëch, who is a grandson of Ferdinand Porsche. Seb seems to be a smart, rich guy who speaks four languages, has an engineering and marketing background and lives in Shanghai and Tokyo. He’s a big name among big names at Riversimple, an alternative-car company which recently presented its first car in London. If Piëch had a monkey-man slogan, it’d be “ideas, ideas, ideas.”

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While French workers take hostages, French companies do a little extortion: “PSA Peugeot Citroën has warned that its 2009 operating loss could reach €2bn if France does not renew its cash-for-bangers scheme, due to expire later this year,” the Financial Times reports. Without “cash-for-bangers,” as the Brits call their clunker culling program, Peugeot will scale down fourth-quarter production, anticipating an utterly awful 2010. Jobs will be lost, red ink will be all over the place. The FT rightly assumes that PSA’s “mutterings may be intended to press the French government to continue the plan.” Can the French possibly say non?
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Workers of French parts maker Raquet held three leading managers hostage at the Monthermé factory in the Ardennes. The workers called the kidnapping a protest against cutting 73 of a total of 187 jobs. After the leader of their prefecture agreed to talks, the managers were released shaken, but unharmed. Automobilwoche [sub] says that this kind of hostage taking has become commonplace in France since the onset of carmageddon. The kidnappings receive a Gallic shrug-off: “This barely elicits a reaction anymore amongst the populace.”

Kids, don’t try this at home.

In addition to offering hybrid options across its lineup, Mercedes-Benz will mount a three-cylinder engine in certain vehicles by 2012, reports Motor Authority. Mercedes R&D Boss Thomas Weber does mention that there’s a slight hitch to the plans, namely that “Mercedes is currently looking for a partner to help develop the new three-cylinder engine.” In what appears to be a case of car-before-horse(power), Weber confirms that this undeveloped engine will appear in future iterations of the C-Class, B-Class, A-Class and Smart ForTwo. The American market is not expected to receive three-banger benzes, although a 1.4-liter Kompressor engine is being considered for the C-Class.

European car sales are not out of the woods yet. But they are on the rutted logging road to recovery. That’s the bottom line of the May sales report of the European Automobile Manufacturers’ Association ACEA.

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Snickers in Detroit, horrors in Rüsselsheim: Suddenly departed Government Motors purchasing chief Bo Andersson is taking a job in Russia. He will be Putin charge as chairman of Russian automaker Gorkovsky Avtomobilny Zavod, better known as hapless GAZ.
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If we’ve learned anything from animated cats over the last several decades, it’s that opposites can attract (and that music video directors get all the good drugs). But if there are serious doubts among analysts about the Fiat-Chrysler hookup, imagine what they’re saying about the Saab-Koenigsegg deal. After all, the buying firm sells one-of-a-kind cars for a cool million dollars a pop while the purchased firm can’t sell reworked GM offerings at zero-percent interest. Is there something rotten in the state of Sweden?

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The European Commission has scrutinized care packages given to car makers by their governments. The Commissars find those programs highly objectionable. According to Reuters, “U.S. financial aid to carmakers and a number of stimulus packages adopted by other countries to fight the economic slowdown could distort global trade,” a (probably not very) confidential European Commission report says. Here are the EU commission’s main objections:

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Swedish supercar firm Koenigsegg has signed a letter of intent to purchase Saab, reports Reuters. “Final negotiations about details on the deal will go on in the next months.” Meanwhile, imagine the synergies. On the one hand, 1,000 hp+ supercars, on the other the 9-5. High tech plutocrats and befuddled history professors shopping under one roof. How do you say schizophrenia in Swedish? Speaking of crazy, who else is dying to know how much Saab is being purchased for? Or is this one of those Marchionne-style, no-money-down deals?

We are an equal opportunity auto news provider. Don’t like the news that China’s sales exploded by 55 percent in May? No problem! Go to Russia! In May, Russian car sales tanked by nearly 60 percent, Automobilwoche [sub] reports. The former great hope for car growth and member of the BRIC (Brazil, Russia, India, China) states turns into a basket case. It’s down to BIC now to re-ignite growth. Ooops, Brazil’s first-quarter GDP shrank 1.8 percent, so let’s make that a bIC. Back to Russia’s implosion: Who’s to blame?

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Auto Motor und Sport has driven VW’s “Blue Concept Sport” roadster (in concept form, limited to 100 km/h), and praise its agility, steering precision and weight distribution (48:52). Not to mention it’s near-production feel. Word is that the two-liter diesel (180 hp) convertible could go into production by 2013 at a €22k-25k price point. Building the better MR2 sounds like a good place to correct one of Toyota’s major errors: surrendering the fun.