In 2005, Mexican President Vincente Fox accelerated the opening of Mexico's markets to American used cars, allowing the free importation of American vehicles between 10 and 15 years old. In the last two-and-a-half years, an estimated three million used American cars answering to that description have found their way into Mexico. As the San Francisco Chronicle reports, the business of importing American junkers has been good to the 25k families who earn their living in the trade, but not everyone is muy alegre. Mexico's new car dealers are feeling the pinch; sales have stagnated at 1.1m per year. Sales of subcompacts have dropped over 16 percent, as Mexicans opts for cheaper, more spacious American metal. And when the Mexican car industry sneezes, American manufacturers catch a cold. GM, Ford and Chrysler are all top sellers in Mexico. They stand to lose big as the wave of American jalopies continues to take the air out of the Mexican new car market.

When American automakers want to cut costs on parts, they turn to China. When German automakers want cheaper parts, they turn to North America. Automotive News [sub] reports that German automakers are looking to buy more parts made in North America to "cope with the dollar-euro exchange rate." AN says the Germans are asking their suppliers if they can build sub-assemblies (e.g. seats) with parts bought in the "dollar-zone." That's a no-brainer for Mercedes and BMW, who assemble vehicles in North America. But the dollar – euro disparity is now so great that even Audi, who builds NA-spec models in Europe, are switching to American parts to cut costs. Does this mean we should start looking for the UAW label in German vehicles? Nope.

Auto Motor und Sport reports that a gas explosion rocked Porsche's famed Zuffenhausen factory early this morning. The blast originated in the factory paint shop at five a.m. local time, when gas apparently escaped a drying kiln and ignited. The explosion triggered the factories automatic sprinkler system, which prevented the spread of fire, but also left the paint shop and other portions of the 911 assembly line underwater. Two factory workers were hospitalized for unspecified injuries, but no fatalities were reported. Damage from the explosion and the sprinkler system will halt the production of up to 500 911's during the planned two to three day cleanup period. Despite the shutdown of 911 production, Zuffenhausen-sourced components for the Leipzig-built Cayenne and Finnish-finished Boxster will continue to roll out of the factory, meaning that for at least a few days the cynics were right, and Porsche will be building everything but a real 911.

OK, it's a love letter to Toyota, written by a local Mississippi paper pleased as punch that their audience are enjoying the economic uplift provided by a new, $1.3b Toyota factory. But The Northeast Mississippi Daily Journal still offers a fascinating look at how ToMoCo gets the party started at a new production facility. "Numerous training sessions at other Toyota sites, including Georgetown, Ky., and San Antonio, are part of the regimen. TMMMS [Toyota Motor Manufacturing Mississippi] employees will spend three weeks or so at one of those facilities, then return home for training at area community colleges for a few weeks. The schedule rotates for a few months until employees are ready to 'graduate.' Then the next batch of employees starts the process again. But the training doesn't stop… Toyota workers are cross-trained to do other jobs. The premise is simple – the more you know, the more you can do, the more valuable you are." Production at the new plant– just outside Elvis' birthplace in Tupelo– begins in late 2009 for the 2010 model year Highlander.

What starts out as the [now] usual report on the huge number of high-risk sub-prime car loans– "According to Power Information Network, 1.85 of the 9.6 million customers in 2006 who leased or financed a new car were subprime borrowers or consumers with weak credit"– suddenly swerves towards Uh-Oh Town. The CBS5.com report highlights BMW Financial lease holder Vivian Snyder. A salesman inflated Snyder's income ($2500) on her credit application by 150 percent. The reporter then secured the loan application and discovered that "Snyder's income had been changed once again – from $6,000 to $8,600, this time without her knowing. An "8" had been placed before the "6" and "0"s tacked at the end." When confronted, Freemont, CA AutoNation General Manager Larry Long claimed the change had been made in Snyder's presence, and then blamed BMW Financial for approving the lease. "We have investigated this matter internally," Bimmer spokesmouth Martha McKinley insisted. "And we are satisfied that BMW Financial Services acted appropriately at all times during the application and credit review process." Yes, well, AutoNation eventually ate the lease and "according to consumer advocate Rosemary Shahan with Consumers for Auto Reliability and Safety the practice is common. 'This is an epidemic of loan applications being falsified. In fact, the model for the meltdown we're seeing in real estate and home mortgage lending was auto lending.'" [thanks to buzzlightyear for the tip]

Honda is known for manufacturing some of the sweetest-shifting transmissions in the world. Yet many owners of 2002 to 2008 model year cars claim that when shifting from second to third, the transmission resists, subtly grinds into third or pops out of third gear altogether. More than a thousand Civic Si owners have signed an online petition asking Honda to “correct the problem.” Over at 8thCivic.com, the list of ’06 through ’08 Si owners “signing” the "I have a 3rd gear problem" thread is up to 270. Recently, Road and Track published its Long-Term Test Wrap-Up of their 2006 Civic Si, and they experienced a “binding resistance going into 3rd, which would kick the gear-shift lever back to neutral if the clutch was let out a moment too soon," and speculate that “we're not sure if the gearbox issue is a design flaw or premature wear exacerbated by a diverse group of learning curves.” And this site offers video of a 2004 Accord six-speed popping out of third gear. Recently, Fox news in San Diego posted a “Call for a recall” video about the current-generation Si, and it’s spread like wildfire [shown above]. Disgruntled owners say Honda needs to resolve these issues, or risk damaging its reputation. You know, more.

So there's this big deal panel of "independent experts" from the National Research Council that advises the National Highway Traffic Safety Administration (NHTSA) re: federal mpg standards. The last time the Council got together, they deemed diesel engines too dirty and hybrids as "too niche" for inclusion in their final report. Flash forward seven years and the Council finds that diesels could deliver 30 to 40 percent improvement in fuel efficiency over comparable gas engines. This time 'round, full-electric and fuel cell-powered vehicles didn't make the cut; "the committee does not expect commercialization of fuel cell vehicles or widespread marketing of all-electric vehicles before 2020." Although Congress insists that regulations must focus on gas engines– as these represent the vast majority of vehicles on the road– the inclusion of diesels in the new report may presage regulations allowing a new era of European-sourced high-efficiency oil burners in the U.S. Provided, that is, California doesn't trump the feds again and tighten their particulate standards, again…

What do you do if you're an automaker that's teetering on the brink of disaster, that's so hard up it's offering its entire workforce bribes to quit, that's selling off everything but the gold-plated toilets in the executive suite just to keep afloat? Well, if you're Ford, you give everyone a bonus! The Detroit Free Press reports that FoMoCo is preparing to give bonuses to all its execs, salaried workers and the people who really do the work. Officially Ford says "no final decisions have been made," but they're just waiting on approval from the Board of Directors to make it so. The justification for giving bonuses even though they finished last year deep in the red? Ford "only" lost $2.7b in 2007 compared to the previous year's $12.6b hit. In other words, they sucked, but not as bad as they did before. There's no word on whether the bonuses will come before or after the workforce buyouts.

Infiniti is, for all intents and accounting purposes, a U.S. brand. Last year, Nissan's luxury division shifted American customers' expectations– I mean sold brand fans 127,038 new vehicles (93,717 cars and 33,321 SUVs). And now Infiniti's heading across the pond to convince European buyers that, uh, what's their tagline again? It's not on the press release. Or the Euro-press website. Uh-oh. Despite a deeply worrying lack of branding, Infiniti is set to open some 80 stores throughout the Eurozone. The world's snobbiest car market. Where logical competitor Lexus has gained about as much traction as a Prius attempting a hill climb in a blizzard. To gauge Infiniti's chances of carving out a niche in the home of the luxury car, I rang-up Infiniti Euro Comms. Director Wayne "No Comma" Bruce for the inside dope on the dealers and the marque's plans for luxury conquest sales. [Podcast below] Bruce reckons sporty value-priced products, exclusivity and bespoke customer service will carry the day. Yes, well, the longest journey starts with a single FX: the new model's ready for its Geneva debut. It'll be the first new Infiniti revealed outside the U.S. Infiniti's going to need that kind of commitment– and then some– to make this venture work. Meanwhile, the brand is being "nurtured" in the Middle East.

When I get press releases, there's always an "about whatever manufacturer" paragraph at the bottom. Normally I don't read it; it's just marketing hyperbole. But today, Chevy's 'claimer" caught my eye. "With the largest dealer network in the United States, Chevy is the leader in full-size trucks and the leader in sales of vehicles priced $35,000 and above. Chevrolet delivers more-than-expected value in every vehicle category, offering cars and trucks priced from $9,995 to $83,175." Huh? Why's the Bow Tie brand– GM's supposed entry-level, value-oriented division– bragging that they sell the most vehicles in the "$35k and above" category? With the median new car price hovering around $27K, that's a whole lot of high-priced rides the "value division" is selling. Yes, much of what Chevy sells at the $35k and up price point are trucks and SUVs. But the fact that the spinmeisters view Chevy's $73k price span as a virtue reveals the depths of GM's non-existent branding strategy.

Chrysler's standing by. At 4pm EST, a federal judge will rule whether or not the American automaker owns the tooling that makes the plastic parts they need to build cars. Should the court rule against bankrupt parts supplier Plastech and green light a Chrysler reclamation, a fleet of trucks are ready to swoop in, grab the tooling and whisk it off to other suppliers. According to Automotive News [sub], Chrysler has already signed letters of intent to relocate production with three of their other suppliers, with more sub-contractors "angling" for a piece of the Plastech pie. Wherever the toolings end up, ALL Mopar assembly lines will shut down while they're installing the equipment in its new homes– which could take as long as a week. Or… a year if Plastech's testimony to the judge is accurate. Which would kill Chrysler dead. If you're going with the former scenario, a shutdown could be a blessing in disguise; Chrysler's inventory levels are too high as it is.

Thanks to the rapidly expanding Chinese and Indian automotive markets, iron ore prices are soaring. CNNMoney reports Asia's three largest steelmakers have been hit with a 65 percent increase in iron ore prices from Brazil's Vale (the world's largest ore producer). Unsurprisingly, other large ore producers are expected to follow suit. Even though the trend will increase steel prices and thus production costs, Toyota says prevailing economic conditions (a.k.a. a stagnant Japanese new car market) means they can't hike up prices at home. ToMoCo Prez Katsuaki Watanabe says "It's hard for us to pass on the impact of higher steel material costs to our product prices under current circumstances. We have to cope with increased material costs by reducing our product costs." Translation: either Toyota will have to to cut other operating expenses or use profits from overseas operations to keep the home operations afloat. Sound familiar? [Props to starlightmica for the link]

As reported by Forbes and many others, Chyrsler CEO Bob Nardelli attended yesterday's 50th anniversary running of the Daytona 500. In a magna-nimous moment, Boot 'em Bob told the teams with Dodge decals on their cars (ostensibly, Dodge Chargers) that if any of them won the race, he'd give the team an extra $1m. After last year's pitiful performance by the Mopar racers, it looked like Cerberus' money was safe. And so it was, until the last lap, when Penske Racing's Ryan Newman and Kurt Busch came from behind and blasted past leader Tony Stewart in his Toyota, grabbing first and second places for Dodge. In fact, Dodges were in six of the top eight places. While the finishes were impressive, you have to wonder how Chrysler can afford to keep pouring money into racing. With all the factories they're closing, all the jobs they're cutting and all the suppliers they owe, you'd think they'd need every spare buck they could find. Still, an execs gotta get out of the office every now and then…

While we've taken Detroit to task for its lousy supplier relations (nose, face, spite, rhinoplasty, etc.), we finally get a look at the Plastech showdown from Chrysler's perspective. It's buried at the bottom of a Crain's Business Detroit article on their "Crain's Newsmaker of the Year" award to United Auto Workers' boss Ron Gettelfinger. After Big Ron wishes [unionized] Plastech well, we learn that "During court testimony last week, Douglas Doran, director of interior procurement, said Chrysler had been monitoring Plastech's financial condition for more than a year through Southfield-based BBK Ltd. BBK told Chrysler that Plastech was having trouble paying suppliers and had violated agreements with its lenders." And so "Chrysler twice participated in bailout agreements with other customers [GM? Ford?] over the past year, including in January when it contributed $10.7 million to help bail out Plastech. Chrysler attached conditions to each bailout agreement granting Chrysler the right to relocate its tools at any time." Yes, well, Chrysler acknowledged that Plastech has an additional $13.4 million of equipment for which the automaker didn't pay. Meanwhile, we hear that "Plastech's production quality was falling. In 2007, Chrysler issued 449 'quality tickets' to Plastech for 'non-conforming material.'" That's a lot of deeply worrying info, especially the bit about "other" supplier bailouts. Could this thing snowball? We shall see. [NB: Federal Judge Phillip Shefferly is set to rule on ownership of the disputed tools tomorrow, at 4pm.] 

The Detroit automakers aren't the only ones feeling the cost crunch in Canada. The London Free Press reports our neighbor to the north is also the most expensive place Toyota assembles vehicles– in spite of a distinct lack of Canadian Auto Workers' union members. And yet, in spite of higher operating costs, ToMoCo may be looking to expand their RAV-4-producing Woodstock assembly plant even before it opens next fall. Toyota's playing down the rumored expansion. They're declaring that the plant must first open and perform before they'll consider adding more capacity. When asked why they'd consider spending more on a plant that already costs so much to operate, Toyota Canada's president Yoichi Tomihara replied "Toyota's philosophy is to make the investment in the long term, not the short term." Toyota executives also said they don't let current market conditions sway their strategy; economic conditions can change. Besides, they added, they like making vehicles in Canada. I'm thinking ToMoCo likes it anywhere where they don't have to deal with a labor union.