The BRIC countries, Brazil, Russia, India, China, long treated as pariahs, have lately advanced to savior of the world status. Whatever growth there is on the planet, it’s supposedly made of BRICs. Now, even the BRICs crumble. Latest case in point: A Ford factory near Russia’s St. Petersburg announced today that it had shut down its assembly lines. It will not re-open them until January 21, Russia’s news agency Novosti reports. Reasons? Don’t even ask. You know them already: “The ongoing global financial crisis and the necessity to reduce production due to the expected drop in car sales in the country next year.” That’s coming from Russia, where last summer unit sales were up by 41 percent.

The Ford plant was opened in the summer of 2002 to satisfy the demand. It employs some 2,200 workers, who’s jobs are temporarily pisdoj nakrytsja (gone.)  According to Russian labor law, the workers are entitled to two thirds of their wages during the closure.

The factory, which produces Ford Focus cars, previously announced it planned to produce 125,000 cars in 2009. Two items stand out:
Read More >

The production version of the new Opel Meriva will keep the concept’s suicide doors, say Carscoop. Nope, no stylish, efficient people movers in the GM stable. Keep moving people. Nothing to see here.

According to the Financial Times, the French president Nicolas Sarkozy and his government are sitting on an independent report about the future of cleaner, more fuel efficient cars. The 129-page document has been finished for months (since late September) and yet, from what the FT says, it will not be released to the public in the forseeable future. Apparently people who have seen the report say that it looks negatively on all-electric cars, instead preferring a motoring future based on a mix of gasoline, diesel, biofuel, and parallel and series hybrid cars, all with enhancements in tires, aerodynamics, and so on. In other words, the report said the variety pack we’ve got now seems to be the right approach. Unfortunately, Sarkozy is chummy with two billionaire businessmen who are both pursuing electric car businesses (Serge Dassault and Vincent Bolloré). To make matters worse, the French government still owns a 15% stake in Renault, which has poured a small fortune into the development of electric cars — including a large pilot testing program in Israel previously expected to launch in 2011. This stinks of corruption. And before we say “Well, it’s the French. They surrender and keep mistresses,” keep in mind that you should be no less bothered.

European car buyers show solidarity and join the worldwide buyers’ strike. November sales in the EU fell 26 percent to 932,500 units, Automobilwoche (sub) reports. That, people, makes the EU the world’s largest car market. And we aren’t even counting “light trucks” here. Western Europe sank 26 percent to 854,700 cars. For the year, Western Europe is down 8 percent. Biggest losers: Spain (-50 percent,) UK (-37 percent,) Italy (-30 percent.) Even the new EU countries, previously the only places where there was growth, are no longer immune. Except for Poland (+11 percent) und the Czech Republic (+2 percent,) sales are down everywhere. Rumania even imploded to the thumping tune of minus 53 percent. Car sales in the new EU countries are down 23 percent to 77.800 cars. Nobody is an island, even Central Europe ain’t.

As far as brands go, GM is the biggest percentage loser with -37.5 percent. They sold 76.383 units in November, their market share shrunk from 9.7% to 8,2%. Toyota lost a third of their sales, their market share is down to 4.7 percent from 5.2 percent. Ford gets a gold star. They lost only 19.6 percent and increased their market share from 9.5 percent to 10.3 percent. And it gets worse …

Read More >

For days, Fiat’s CEO Sergio Marchionne had made noises that his company cannot survive alone and is in urgent need of a strong partner to live to tell the tale in the nasty car business. He may have found a suitor, the Italian business paper Milano Finanza (sub) reports: PSA, maker of Peugeot and Citroen. According to the paper, the marriage is being arranged at the highest levels: Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy are discussing to tie the knot between their countries’ automakers. There could even be a dowry: Berlusconi is currently thinking about aid to the auto sector. Except for Fiat, Italy hasn’t much of an auto sector. PSA and Fiat are no strangers. They have two joint ventures, one for trucks and one for the “Eurovan” MPVs. Combined output of the two companies was 6.2m units last year. A combined Fiat-PSA would have a good shot at the number 4 slot, with Toyota first, GM second, and VW third. Fiat-PSA would have to duke it out with Ford and Renault-Nissan. What’s the prospective couple saying to all this?

Read More >

For some companies, the ongoing financial crisis will be fatal, but for others, it may turn out to be a historical opportunity to re-define themselves. When weak brands disappear, others can fill their niche. Honda, for one, seems to be one of the first car makers to seize the opportunity that the industry’s re-structuring is providing. “Where we want to be by 2015 is the environmental leader. I mean that in a credible sense, not a greenwash sense,” Chris Brown, the head of marketing for Honda Motor Europe, told The Guardian. Which is easy to say, although Brown says Honda does support an eco-rating system to prevent misleading environmental advertising claims. But the first step in this branding conversion was announced last week, when Honda said it would be terminating its Formula One activities and re-assigning its F1 engineers to work in eco-technology. Egads! Is Honda about to put all that talent towards becoming the car for the dour, anti-car league?  Honda is directing its $150m+ ad budget for Europe and Africa towards addressing this question. As Brown puts it, “We want to change the conversation completely. At the moment everything is heavy-handed, preachy and overwhelming. We want it to be positive, optimistic, joyful, powerful.” Read More >

Over in what we affectionately call the “Old World,” C-segment hatchbacks like the Golf, Focus, Megane, Civic, and Corolla/Auris also come in higher roofed variations affectionately called MPVs (multi purpose vehicles). One of VW’s entries into the market is the Golf Plus; and since the Golf was just redesigned somewhat, the Golf Plus has been updated accordingly. Except for VW’s little trick – the Golf Plus is still riding on the outgoing Golf platform, and has only gotten cosmetic updates to match the new one. It still shares the Golf’s mix of turbocharged and common-rail diesel engines and available DSG transmissions. And you might recognize the interior from the Tiguan – many components are shared.

One of the reasons that U.S. pistonheads pine for Euro-Fords: the performance variants. On this side of the pond, Ford has abandoned its SVT division. In mainland Europe, Ford continues to crank-out expertly tuned economy cars for budget-minded enthusiasts. The new Focus RS continues the tradition. AutoExpress reports that Ford Austria has leaked performance details for the upcoming Focus RS, “and they’re just as shocking as its lurid green paint job!” (Forgive the hypersonic tail waggging. That’s the way AutoExpress rolls.) The Express pegs the front wheel drive RS at 296bhp. “Ford is adamant that, thanks to its revolutionary ‘RevoKnuckle’ suspension, the RS will have no problems putting power to the tarmac.” Yes, well, no knuckle dragger this. The RS will sprint from 0 – 60mph in 5.9 seconds, and on to a top speed of 164mph. The Boys from the Blue Oval Boys are pricing the RS at £33k in Austria, and an estimate £25k in The Land of Hope and Glory.

If you think the U.S. auto market is bad, here’s something to cheer you up: it’s not as bad as Spain. November car sales are one half of their former self. Si, muchachos. According to Forbes, Iberian new car sales dipped by 49.6 percent. Explanation? In 2007, Spanish real estate cratered. Then, the country’s industry went anorexic. Spain now has the highest unemployment rate in Europe– 12.8 percent– and it’s expected to rise to 15 percent in 2009. That doesn’t bode well for Spain’s extremely shaky car industry, where another 50k citizens may go on the dole, pronto. Last week, the Spanish government announced a $1b package to resuscitate the nation’s car industry. With buyers on a general strike, it’s too little, too late. As far as brands go, in November VW was first, SEAT second, Ford third. For the year, Ford is leading before Peugeot and Citroen. Still, a perro flaco se le suben las pulgas.

Euro NCAP crashed 12 cars, and caused surprisingly little damage. Eight out of the 12 demolished vehicles received the coveted 5 star rating. Mercedes Viano and Ford Ka have four stars, the Dacia Sandero has three. The Ford Ranger limped out of the testing lab with only 2 stars: Bad boy! Results can be found here.

Next year, Euro NCAP will use a new, more stringent method. Cars without ESP won’t stand a chance to receive 5 stars. Seats will receive special attention. As a warning to manufacturers, Euro NCAP published results of its rear impact (whiplash) test which hadn’t been part of this year’s star ratings. It will be next year. Automakers better get off their duffs and start working on those seats now. Only 4 out of 25 received good marks. The rest are marginal or poor. Results here. Doing nothing will result in major demotions next year.

The other day, I told my mechanic I needed winter tires, and asked for a recommendation. “I’ll get you some Dunlops, they’re not bad, and cheaper than the Uniroyals you had last time.” When I asked him about rolling resistance and about tire wear, he looked at me like I was stupid, and repeated: “They’re pretty good tires”. So I looked at some car sites in the Internet, gave up after about five minutes, and ordered the Dunlops. Does buying tires have to be a “trust the guy in the greasy overall” event? The EU Commission (the executive branch of the European Union) says no, and intends to introduce new rules for labelling tires. The tire industry agrees that yes, change is probably necessary, with some qualifications, under certain conditions… Read More >

Inside Line recently got a friendly call from a Tesla spokesperson who was positively bursting with the good news: Porsche had purchased a Tesla Roadster. And though its always nice to make a sale, the Tesla flack was clearly more interested in the PR benefits of Porsche engineers studying the $120k roadster. “A Porsche senior engineer actually came over a few weeks back, and he was seriously analyzing the car in every detail,” dishes the Tesla source. Separately, a “German source” tells Inside Line that Porsche is “none too pleased” with the recently-released eRuf, a lithium-ion-powered electric Carrera. So what does this all add up to? Porsche’s building a lithium-ion sportscar. After all, they’re not buying a Tesla to study their customer service. According to the Tesla spokesperson, Porsche’s order is “pretty far down on the list of current orders.” Chances are we’ll see an EV Porsche on the Nordschleife before Tesla makes its way down that notoriously interminable waiting list.

The Porsche vs. Nissan catfight over Nurburgring lap times has done more to publicize both company’s products than anything else. Besides, as Chris Harris of Driver’s Republic puts it, “Nurburing lap times… say far more about the conditions of the track and (fortitude) of the driver… than they do the vehicle in question.” Still, Harris was drawn to recreate the battle, pitting Porsche GT2 against Nissan GTR on the Nordschleife. Driver’s Republic presents the experiment in its online-magazine format, which brings high-quality photos, video, words and telemetric data together in one highly entertaining read. Check it out.

GM has already announced that it’s trying to come up with no less than $5b in savings by the end of the calendar year. To assist these efforts, GM has put Jones Lang LaSalle in charge of 200m Euros worth of sell-offs and leasebacks. Together with its attempt to sell or lease its Renaissance Center headquarters, GM’s fire sale should bring in some $750m. Property Week reports that JLL’s portion of the sell-off will include non-manufacturing sites in Europe and the UK. On their selling block will be Saab’s properties in Gothenberg and Trollhatten, while Vauxhall’s Luton headquarters, GM’s headquarters in Dublin and other Chevy, GM, and Opel sites are said to be on the sale list. Including factories, GM is estimated to own some $43b in real estate around the globe.

AFP is reporting (via Yahoo News) that German Solar Power firm SolarWorld has offered to buy Opel for 1b Euros, in hopes of creating Europe’s “first green automotive group.” The offer consists of 250 million euros in cash and 750 million euros in bank credit facilities for Opel’s four auto factories and a key research centre in Ruesselsheim, western Germany. I know, I know, you’re probably asking yourself if this is some kind of twisted joke. “I could not be more serious,”  says SolarWorld boss Frank Asbeck. “We would not make this offer otherwise.” Of course there are still strings attached. For example, SolarWorld wants a liquidity guarantee for Opel from the German government. The deal also would require a complete split of Opel from GM, and compensation payments of 40,000 euros per Opel worker, which would approximately equal the one billion euro purchase price. But, as Global Insight analyst Christopher Stuermer points out, “Adam Opel Germany has total assets of around eight billion euros — SolarWorld’s offer is ridiculous.” The consensus appears to be that this will only happen if GM goes under, in which case the German state of Hesse has already pledged 500m Euros. After watching several hours of House Financial Services Committee hearings, this blogger is as convinced as ever that this is an outcome worth betting on.