Update: It’s obvious I’m confusing as many or more folks with this post as I am enlightening some. As an addicted Economist reader, I enjoy unraveling the myths and stereotypes that Europeans pay $30k for a basic Ford Focus or pay $9 for a gallon of gas. We do, if we go there with our dollars. They don’t. The information below is intended as a set of tools to better understand the issues, but will not explain them all perfectly. I’ve run out of time to respond to comments, so I hope this helps. Or pick up an Economist :)

European new car prices can be as confusing to us Yanks as ordering from a menu in Latvia. We’re always hearing about tiny $29k econoboxes and the like. List prices are typically converted to US dollars, and the results can be very misleading. MSRPs are assumed to be more solid than ours. And the 19% VAT (value added tax) is not factored in. The result often is an assumption that European car manufacturers are getting ginormous prices for their little hatchbacks. Lets pull back the curtain of confusion and seek some truth. Like the Audi A3 shown above: if you factor in purchasing power parity, remove the (included) 19% tax, and factor in the 29% discount being offered, the equivalent US price is: $12,353. Allow me to explain: Read More >

With all the now-distant brouhaha over the VW – Porsche tie up, it’s easy to forget that they started out as kissing cousins siblings, in more ways than one.

The Opel negotiations are stuck – again. By the end of January, GM wants to present its final plan for the restructuring of Opel. An important part: The workers. Opel workers are supposed to forego €265m a year as a contribution to the cause. The unions want a share of the Opel business in return. Suddenly, GM balks at it. Read More >

More than a year ago, TTAC reported top-level attempts of a cooperation between BMW and Daimler. At the time, we didn’t give the cooperation big odds. Our educated prediction: As much as the heads of the automakers may desire mutual aid, middle management and especially the engineers will torpedo any tête-à-tête. “If you think South Korea and North Korea have communication problems, then you should be in a meeting between Daimler and BMW engineers,” was our analysis (based on input of people who have been in those meetings.) And we wrote: “Currently, Daimler and BMW don’t share much more than common pain.”

Supposedly, they kept talking. They could agree to joint purchasing of parts, but even that didn’t progress beyond less than lofty goals. Projects which promised savings of hundreds of millions, such as the joint production of transmissions and engines, went absolutely nowhere.

Now, Der Spiegel reports that all talks about possible jointness between Daimler and BMW have been called off. “There are no new meetings,” said a top manager to Der Spiegel. “There is nothing to talk about.” Read More >

Yesterday, Volkswagen became the Suzuki’s top shareholder. VW transferred $2.4b in return for a 19.9 percent stake in Suzuki. Suzuki turned around immediately and used $1b of the money received to buy stock in Volkswagen. Consider the couple as intertwined.

With the marriage sealed, both companies went right to work. Read More >

GM sent Opel “an additional $930m in temporary aid until more permanent financing can be found” (good luck with that,) GM disclosed in a filing with the SEC. The total financing GM has provided to Opel now stands at $1.83 b, writes the DetN. It’s not that GM sent the money out of the kindness of their hearts. Read More >

People have a refound appetite for luxury vehicles, decided Daimler. Their workforce in Sindelfingen is working full-time. Wonders of wonders: They even brought temporary workers back. All this as per the Frankfurter Allgemeine Zeitung [sub] in Germany. Reason for the sudden Benz boom? Read More >

Daimler’s Dieter Zetsche arrived at NAIAS with his left arm in a sling. What happened? Too much arm wrestling with unions or suppliers? Nah, that would be the right arm. Turns out, Dr. Z was injured by a woman. On the ski slopes in Austria, a female snowboarder had crashed into Zetsche. Left shoulder fractured. Dr. Z wore a helmet, which avoided more serious damage.

Germany’s BILD Zeitung reports that doctors at the Austrian hospital prescribed at least 6 weeks of strict convalescence. Says BILD: “Daimler’s boss ignored them. He popped some pain killers, flew to Detroit with shoulder and arm bandaged. Courageously, he presented the new Mercedes products.”

Volkswagen and Suzuki aren’t wasting any time in consummating their marriage. VW is thinking of providing its hybrid technology to Suzuki. This is what Ulrich Hackenberg, head of VW’s Forschung und Entwicklung (R&D) told The Nikkei [sub] on the sidelines of the NAIAS in Detroit. As usual for a tight-lipped R&D guy, Hackenberg did not volunteer any details, timing or models.

Unusual for a usually tight-lipped R&D guy, Hackenberg said Suzuki has excellent technologies, including low-cost production know-how, and that the two firms have a lot to learn from each other. He also said VW will support its Japanese partner in China, where Volkswagen has a commanding market share, and where Suzuki needs help.

“What Volkswagen hybrid technology?” you will surely ask. Read More >

Bloomberg read it in Sweden’s Dagens Industri that General Motors will send the tools for Saab’s new 9-5 model to China. Mind you, these are not the old 9-5 tools sold to BAIC. These are the tools for the new Epsilon 2 based 9-5, or what Dagens Industri calls “the crown jewels of Saab.”
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GM’s interimitis is turning into a chronic disease. First, Whitacre becomes interim replacement of Henderson, and is in no hurry to give up the job. Then, in November 2009. Nick Reilly becomes interim head of GM Europe while GM is supposedly searching for a replacement of Carl-Peter Forster. In December 2009, the interim boss was installed as permanent chief of GM Europe. Now, Reilly will be named permanent CEO of Opel, writes the Frankfurter Allgemeine Zeitung.
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Official Kraftfahrtbundesamt data are uncharacteristically late. But Dow Jones Newswire (via Finanznachrichten.de) has it from two reliable sources that Germany’s new car market rose to 3.8m units in 2009, which would be an increase of 23 percent if it pans out. According to the report, Germans bought 3.8m units in 2009, in 2008 it was 3.09m units.
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The “S” word became one of the more popular words in online discourse this year, typically derailing discussions way off topic and resulting in the kind of partisan screeching that drives everyone bonkers. More often than not, these fruitless debates settle around a single major point of contention: the definition of Socialism. Well, thanks to a 48-picture gallery of auto ownership in the former East Germany at Autobild, we now have a distinctly automotive definition of Socialism. Autobild’s thesis is that automobiles helped destroy Socialism, and certainly being forced to choose between a Trabant, a Moskvitch and a Lada would be enough to turn Che Guevara into Milton Friedman. But the gallery also includes images of the Neo-Trabant, an EV concept that plays on Germany’s strange quasi-nostalgia for the bad old days. Or at least the bad old cars of the bad old days. Which indicates that the most typical response to all forms of politics is ambivalence.

To have a chance of succeeding with its Opel turnaround, GM needs two things: Financial support from the European governments to the tune of €2.6b. And concessions by Opel workers worth €265m a year.  GM itself doesn’t have more than $600m to contribute. Not the best bargaining position.

Chances of government support are getting slimmer as time goes on. Now, Opel labor representatives flat out refuse any support if GM sticks to its turn-around plan for Opel. It is “totally unacceptable” said Opel labor leader Klaus Franz. “A reduction of 9,000 jobs in Europe is out of the question,” Franz said to the Frankfurter Rundschau.
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Russia’s Sberbank isn’t the only party that is unhappy with GM and wants to see money.

Germany’s government wants GM to put “a lot of money” on the table before any further discussions about European state aid for Opel would be entertained, reports Germany’s Handelsblatt.

Note that the harsh comments are coming from Roland Koch, Premier of Opel’s home state Hesse. Previously, Koch had been a vociferous proponent of state support for Opel. Not more.
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