Car makers like to take the credit, but auto suppliers have invented much of contemporary car technology. So when the boss of Germany's Bosch (the world's biggest auto supplier) talks about the future of automotive technology, people listen. Here's what Bernd Bohr had to say to Auto, Motor und Sport . "For the year 2015, we expect a total world market of 80 million new cars, of which only about 2.5 to 3 million will be hybrids and 800,000 will be purely electric. So gasoline and diesel engines will continue to predominate. Actually, we calculate that the world market share of diesel cars will rise by another 5 percent, to reach 28 percent." How come? "Despite disproportionate price increases for diesel fuel, in places such as France the share of diesels has increased from 70 to 80 percent, because of a new CO2 tax. Diesels are 30 percent more efficient, too. There is a political dimension: the EU's ambitious plans to reduce CO2 emissions are only reachable if Europe stays at least 50 percent diesel." But the U.S. has shown that diesel is a no go, no? "This is mainly because of high prices for low-sulfur diesel fuel which is caused by low refinery capacities. This bottleneck should be gone around 2010. We expect a diesel market share for the U.S. of 15 percent by 2015". Are you betting the company on these predictions? "We plan to reduce our dependence on auto technology from currently 61 percent to 50 percent."

Turns out TTAC isn't alone with its Tesla Death Watch and Volt Birth Watch series: Toyota has its own going. EV World's (sub) Bill Moore got this and a few other juicy tidbits from a casual conversation with Toyota's "grumpy old man" Bill Reinert, National Manager of the Advanced Technology Group. Toyota has a Death Watch going on Fisker , Tesla, and…the Chevy Volt. Toyota doesn't think any of them will ever be built in large volumes, because their Li-Ion batteries are simply too expensive to be cost-effective. He also cited concerns over global supplies of lithium. Meanwhile, Toyota is hard at work on next-generation batteries , especially air battery chemistry, including zinc-air, as well as stepping up production of NiMH packs and starting Li-Ion factories. What's the line about not "having all your eggs in one basket"? Reinert also thinks it's unrealistic to expect owners of plug-in to only tap the mains at night. Utilities are going to have to step up capacity. And forget about all the 2010 Prius spy shots floating around the web, they're just cobbled-up mules based on the current Prius. Toyota is famous for keeping their final products under wraps (just one of the many differences with GM). And one more goodie from the grumpy Toyota brain trust: "liquid peak" (every conceivable liquid fuel from petroleum, coal and biofuel) arrives in 2018. That's when global demand will outstrip capacity to produce them all.

Transplant firms pride themselves on running NA operations differently than the D2.8, but the body-on-frame tailspin has no interest in pride or strategy. Automotive News [sub] reports that Nissan, which has never laid off a North American worker, will buy out about 1200 employees from its Tennessee plants. Workers at Smyrna Assembly and the Decherd powertrain plant will be offered up to $125k to leave over the next three years, saving Nissan 18 percent of its TN payroll and shutting the night truck production shift. By Detroit standards, this measure is almost not worth reporting on. But for Nissan and its employees, the stakes are considerably higher. At least that's what the UAW wants us to think; they're playing the told-ya-so card to Nissan's worried Tennessee employees with more than a little schadenfreude. "As a union member, contractually, I know what my rights are," says Mike O'Rourke, whose UAW Local 1853 has twice failed to unionize Smyrna. "Unfortunately, at Nissan, they don't know what the bottom is. And they're afraid… In their employee meeting, one of the employees said, 'If we don't go, are you going to reduce our wages?' And management wouldn't answer," says the UAW honcho. "I think you and I both know the answer to that question." Except that, absent any actual examples of transplants screwing workers, the evidence points rather away from O'Rourke's scaremongering suggestion. For example, rather than abandon or otherwise its employees at Tundra/Sequoia plants, Toyota is keeping employees busy (and paid) by training them and improving operations. While UAW shops are cut and shut left and right. Funny how that works.

The Detroit News reports that Ford and GM boffins have spent the last month or so discussing joint-development of engines and powertrains. The usual anonymous sources say GM approached Ford first, and that Dearborn's initial response was "mixed." But the Blue Oval Board of Directors authorized negotiations. The two firms' heads of powertrain development have met at least three times. Neither company has commented on the reports, but analysts point to a jointly-developed six-speed automatic transmission as a sign that I know it sounds crazy, but it just might work. GM is said to be "ahead of Ford on four-cylinder engine development," while the General could learn a thing or two from Ford's Ecoboost program. And then there's the wild card: the plug-in electric – gas hybrid Volt. "If GM is smart [hold the guffaws please], they will proliferate Volt technology," says featured analyst Jim Hall of 2953 Analytics. "Ford has more experience in getting the costs down, and that could really help GM." Or is it that Ford is five years away from a PHEV of its own, and will do anything to get on board GM's moonshot? Or it could be as simple as splitting a development bill or two. Either way, file this under "How the Mighty Have Fallen" and block your nose. This collaboration reeks of desperation.

The July sales numbers are starting to come in and they're not encouraging. Toyota's overall sales dropped 11.9 percent from last July.  As you can probably guess, trucks were responsible for the largest chunk of Toyota's dismal numbers; passenger cars were down only 5.7 percent while trucks plummeted 29.5 percent. If Toyota's turning in numbers like this, it's going to be scary to see everyone else's reports. We'll post 'em as we get 'em.

Click here for Toyota sales press release

[NB: The numbers in the official press release are adjusted for sales days; TTAC reports the unadjusted numbers.]

Forbes is reporting that Chrysler and notorious industry-alliance slut Fiat are discussing terms of an agreement that could bring Fiat products back to America. Chrysler could lease North American production capacity and share retail space with the Italian automaker say enigmatic "people briefed on the talks." But Chrysler isn't in this just to have another competitor hocking its wares next door, luring the crowds away from Sebrings and Journeys. No, the Auburn Hills crowd has a cunning plan, and it involves Fiat's other, other squeeze: Tata Motors. Chrysler thinks the Wrangler would do well in India and other Asian markets, and talks with Tata are already underway. Since Fiat and Tata are becoming increasingly joined at the hip, Chrysler seems to be imagining a global triumvirate of second-tier automakers. Oh yes, and as one (again with the anonymity) investment banker puts it " "You could definitely see this evolve into something. It would make sense for Tata to buy Jeep if this partnership went through … and Chrysler could really do with selling a brand and getting some cash." So Fiat gets US market access, Chrysler gets a buyer for Jeep (and sweet, sweet cash), and Tata gets an armor-ready platform (Wrangler J8) to sell to the Indian military. Meanwhile Fiat has, quite by coincidence, agreed to finance all of Tata's Jaguar and Land Rover sales in Europe. This is starting to get kinky.

When the new energy bill mandating higher CAFE ratings came out last December, it didn't offer automakers any kind of financial assistance to meet those goals. Since then, we've been treated to a parade of industry types wailing that with times so bleak, CAFE will kill Detroit unless the government bribes assists the domestics with following the law developing more efficient cars. Perhaps sensing John McCain's weakness with the industry, Senate Democrats are rushing to position their party to take advantage of the now free-floating "bailout vote." The Detroit News reports that Democrat leadership has agreed to support $6b in loan guarantees to domestic automakers, and is considering a further industry stimulus for plant retooling. All told, the package will total some $25b in loan guarantees that would cost taxpayers $3.75b. Tellingly, $300m of the initial $6b is earmarked for advanced battery development. If that sounds familiar, that's because it's a pretty handy preemption of John McCain's "Project Lexington." And since McCain seems happy to stick to his Nancy Reagan (just say no!) on bailouts, Obama and the Dems are going to go after the weird industry-worker alliance that wants bailout. It's populist, it's patriotic, and (post-Bear, Fannie and Freddie) it's principled. Best of all, it only costs the taxpayers a few billion. Game on!

Much to GM Car Czar Bob Lutz' chagrin, hybrids are a bit more than the flash in the pan he predicted . A study from RCNOS titled "Global Hybrid Car Market Forecast to 2010" (reported by Research and Markets) predicts global hybrid sales will experience a Compound Annual Growth Rate (CAGR) of 12 percent in the next six to seven years. They also prognosticate that the hybrid battery market will grow by 10.4 percent between 2010 and 2015. From 2008 – 2012, the hybrid component market will increase at a CAGR of 17.4 percent. The U.S. is the top market for gas – electric vehicles. RCNS says American hybrid sales should crest the 1m mark by 2012. At the moment, there are only a few major (i.e. remotely credible) players in the hybrid game. But with the Koreans and the Chinese busily developing their own hybrids, the playing field could become crowded in a hurry. And since competition drives prices down, the consumer will be the overall winner. Not to mention air quality and CO2 emissions. 

Nothing in Chrysler's dated portfolio needs attention more than its Camcord-fighting D-segment offerings, the Avenger/Sebring. The March departure of the lead on the Avengbring replacement didn't bode well. Motor Trend now reports that Project D is heading for disaster, gobbling-up huge engineering and design resources. Chrysler's in crisis mode. Option one: an all-new platform. No money. No way. Option two: deploy an existing chassis (e.g.  Nissan's Altima) and wrap it in new sheetmetal. Option C: rip off another automaker's work wholesale, a la VW Routan. Needless to say, these cop-out options will do nothing to improve Chrysler's rep for mediocre products. Then again a badge-engineered Altima might be better than what Chrysler can cobble together on a shoestring. Either way, with Project D seemingly doomed to mediocrity, what else can keep Chrysler alive? Hybrid minivans? Cherys? Government bailouts? Not good. 

Oh me, oh my, GM is opening a new powertrain development center in Pontiac, MI. Why? According to GM Media Online, "Time equals money, and in keeping with this formula, General Motors today opened a brand-new, state-of-the-art global Powertrain Engineering Development Center that will bring advanced, fuel-saving powertrains to market faster and at less cost by reducing 10 weeks from its powertrain development process." Funny, doesn't building huge facilities equal money too? But seriously, GM says that powertrain development savings will hit $200m this year, thanks in part to this new facility. The 450k square foot building is "where GM will develop and test the Chevrolet Volt's electric drive unit, motors, power electronics and engine," according to the press release (note the use of future tense). The General will also use the facility to develop electric motors for fuel cell and hybrid powertrains, as well as other advanced gasoline, biofuel and clean diesel engines and transmissions. Compressed-air pallet lifters cut test changeover times from 24 hours to 20 minutes. New dynamometers can test every powertrain in all conditions. A global operating system unifies the development process and by shifting early calibration testing from raods to labs, GM says it can cut ten weeks from development time. Which should come in handy if they want to get the Volt developed within the already "well-pushed time envelope".

While Chrysler and GMAC are cutting out leasing altogether, Ford is just raising lease prices on its sucky-residual trucks and SUVs to make them "lease proof." The Wall Street Journal reports Ford officials sent a memo to dealers Monday that said "due to extreme losses Ford Credit is taking on off-lease vehicles, it will be necessary for Ford Motor Credit Company to adjust residuals mid-quarter on the following vehicle lines." The memo specifies the Ford F-150 and Super Duty pickups, and the Ford Explorer and Sport Trac SUVs. They're raising lease prices so high customers won't agree to the terms. [NB: We've predicted this de facto exit from leasing for GM.] Last week, Ford revealed that average auction values for 24- and 36-month lease vehicles were down $2.7k and $2.4k each, respectively. In its recent financial statements, FoMoCo wrote-off $2.1b for leasing losses. 

We catch some flack around here for [allegedly] taking the fight to Detroit a little harder than patriotism demands. But compared to the latest spleen-venting by Chicago Tribune scribe Paul Mack, we're about as critical as a golden retriever puppy on benzodiazepines. Mack's thesis: "GM has traded in its navy blue suits and wingtip shoes for tie-dyed shirts and sandals, and is betting its future on the eco-trifecta of fuel efficiency, flex-fuel capability and electric motors. It is unclear whether the makeover is more than skin-deep, but history provides ample room for skepticism." So we're all on the same page right? Er, no. Because when you're criticizing GM, the very least you can do is stick to the facts re: its doomedness. After all, there are so many. So when Mack pooh-poohs the Volt program because critics have "argued" that the EV1 was DOA to "prove CARB wrong," he's trotting out the worst possible argument when so many better ones exist. And rather than criticizing GM's dependence on ethanol based on the fuel's inherent inefficiencies, he wrongly argues that America is "devoid of an ethanol infrastructure." And adding insults to weak criticism, Mack fills logic gaps with ad hominem put-downs. Calling GM's 30mpg mileage claims "the stuff of dreams for men like George Jetson," Mack says the Japanese automakers achieved the 30mpg goal in the 1970s. Which must mean he'd rather drive a Mk. 1 Accord than "the 2009 Chevy Malibu-now with Betamax!" By feeding his readers invective and insults rather than the truth, Mack has passed on a "teachable moment." Like Walter from the Big Lebowski, he's not wrong… he's just an asshole.

Bucking the tide, Honda announced an eight percent increase in profits for the April-May-June 2008 quarter. Profits would have been higher still were it not for the incredible shrinking US greenback. The Financial Times tells us that "the yen's sharp rise compared with early 2007 – it hit a 12-year high against the dollar in March – reduced the value of its overseas sales and turned what would have been a 7.1 percent first-quarter revenue increase into a 2.2 percent fall." With over 50 percent of its business in the stricken US market, higher raw materials costs and a mix-shift away from higher-priced large vehicles to low-cost cars Honda still pulled a profit increase out of the hat. Then, there is what being able to nix the cash-on-the-hood for your best sellers does for a business. Sure the Pilot, Ridgeline, Odyssey and MDX need incentives to move; but the Fit, Civic, Accord and CR-V are all selling with no rebates and no dealer "marketing support". Meanwhile, over at your friendly Saturn dealer there is cash on the hood of ANY 2008. Even with today's good news, financial analysts are spooked by Honda's warnings that the second half of the year is likely to be more difficult than the first half was and that total fiscal year profits are likely to be down by 18 percent. Honda stock swooned two percent today, but GM dropped eight percent.

Just when you thought it couldn't get any more miserable being one of Chrysler's Dealer "Partners" comes the news that the Chrysler Financial is out of the lease business! The Wall Street Journal reports the decision with a note that "Chrysler is expected to brief dealers formally later in the day in a conference call". Boy, it must suck to find this out in the news before getting word from corporate. Nardelli's previous claims that renegotiating bank loans is just a routine matter have been blown out of the water. That $30B revolving line of credit only runs through August, and IF Chrysler is able to get it extended the terms will surely be much more costly than before. Negotiations must be going very, very badly for Chrysler to take one of the most popular sales financing tools off the table. One has to wonder if come August any new lending will be of the Debtor in Possession variety.