Ford’s popular European Ka car might be coming to America after all. The Associated Press reports (via Yahoo) that Ford decided to “give the Ka another look due to high fuel prices pushing up demand for small cars and the response to introduction of the Fiesta subcompact.” Perhaps the sudden availability of tens of billions of taxpayer-backed bucks to retool domestic factories for fuel-efficient vehicles had a little something to do with this change of heart. Ford has recently written off $8b worth of previous investments in truck and SUV production lines. It’s currently sitting on $25b of highly explosive long term debt. So yes, a little boost from Uncle Sam (that’s you) would be just the thing to get Ford to sing “Baby you can build my Ka.” Yes, but– can Ford get the kind of price premium for the Ka that Mercedes somehow cons people into paying for the Smart car? CAFE be damned; the idea of driving next to full-size SUVs from the driver’s seat of a Ka-sized car sets my teeth a chattering.

Oh man, this is getting ugly. After Porsche’s Turbo and GT2 lost their fastest ’round the ‘Ring record to the Nissan GT-R, the German automaker was… skeptical. So they bought a GT-R in the U.S. and ran the Nürburgring to verify their Japanese rival’s claim. And so they didn’t, failing to get within 25 seconds of GT-R’s ‘Ring highly hyped lap time. Porsche attributed the GT-R’s triumph to non-standard tires, which would nullify the Nissan’s “fastest production car” lap record. Cornered at the Paris Auto Show, Nissan’s European spokesman Neil Reeve said “Quite simply we’re not going to get into a war of words with Porsche.” And then did exactly that. “The final word from us is that it was done on absolutely standard tyres which are available to customers in the showroom. They’re not trick tyres – absolutely standard tyres, normal road tyres. The GT-R comes with Bridgestone and Goodyear (Dunlop). One tyre gives slightly better times around the ‘Ring. We did it on Dunlop. They’re available with the car.” When car.com.au‘s Andrew Heasley pushed him for an explanation, well, read between the lines. “We absolutely maintain (that) Tochio Suzuki – the chief test driver on the GT-R program pounded thousands of laps – he got to know every inch of Nurburgring (circuit) and how the car performs on the Nurburgring and hence set that fabulous lap. More than that, I can’t speculate. I can’t explain why they couldn’t match the time.”

Toyota begins assembling its Prius hybrid in Tupelo, MS sometime late in 2010, and you can expect this development to spawn some form of flag-waving PR from ToMoCo. After all, repositioning itself as an “American” company has been the central project of Toyota PR for a solid decade. But Automotive News (sub) reports that the Prius’s top supplier Denso has no plans to initiate production of hybrid components in the US… or anywhere else, for that matter. “Components used for hybrid vehicles are now experiencing very dramatic change and advancement,” says Denso CEO Nobuaki Katoh. “Given this timing, I still think the activities of development and production of the hybrid components should be concentrated here in Japan for the time being. After that, we may have to consider local production of components in overseas countries.” Quality, it seems, is the rallying cry keeping high-value hybrid component manufacturing jobs in Japan. With new lighter, smaller and less costly components being developed for the next-generation Prius, Katoh insists that Japanese production processes must be refined before they can be exported. Though an obsession with quality and process refinement has launched ToMoCo to its current dominant position, capitalizing on its early hybrid investments require driving costs down and production up. America has bought every available Prius for years now, and establishing top-to-bottom NA production of the Prius as soon as possible has got to be a priority for Toyota.

Say what you will about the evils of globalism. One thing’s for sure: if you’re a global playa, there’s no escaping the market’s judgment. The Washington Post reports that sure, falling oil prices have taken their toll on the Russian economy. But Vlad the Inhaler’s power-grab is the real deal. “Analysts say Russia faces continuing doubts about the investment climate, given the Kremlin’s concentration of political power. These concerns were exacerbated by Russia’s war with Georgia last month. Putin’s tough, anti-Western rhetoric raised fears of a turn against foreign investors and even greater state control of the economy. Investors pulled nearly $35 billion out of the country in the weeks after the war.” Translation: GM’s highly-touted Russian investments are not looking so good, these days. “Rising inflation is a political problem. Most analysts expect inflation to hit 14 or 15 percent this year, which for the first time in Putin’s rule would leave the average Russian worse off at the end of the year than at the start.” Oh, and Putin’s regime has increased Russia’s roadways by .1 percent. [thanks to wludavid for the link]

Last we checked in on the unfolding Porsche family drama, cousin Ferdinand “Phaeton” Piech had made a play for the CEO spot at Porsche Holdings. Turns out cousin Ferdie may have overplayed his hand by taking on Wendelin (I’d tell you my salary but then I’d have to kill you) Wiedeking, current Porsche Holdings CEO and darling of the Porsche clan. Wiedeking’s patron d’overcompensation and Porsche paterfamilias Wolfgang Porsche tells Focus Magazine (by way of Automotive News [sub]) that Piech will pay dearly for going after his Wendelin. After a particularly “turbulent” meeting of the VW advisory board, Wolfie told Focus “I am horrified by the behavior of the chairman,” and that Piech’s removal from that position was imminent. “It is not a question of ‘if’, rather ‘when’ and ‘how’,” Focus quoted one Porsche manager as saying. But don’t expect Piech to simply fade away into that good night. Sure, the Porsche clan damns him and the oversized Passat he rode in on. But Piech still has VW CEO Martin Winterkorn, the massive VW Unions and all of their paid politicians on his side. These interests aren’t backing Piech because they particularly like him or his ideas; they’re scared of Wolfie and Wendelin and their curious “profit fetish.” Is a family being torn apart because Wolfgang Porsche don’t understand the importance of company-funded brothel outings for labor leaders? Because that would just be so tragic. And hilarious. Watch this space.

If you believe Iran will abandon its nuclear ambitions in the face of economic sanctions, there’s nothing to see here. If you believe there’s no way deny Iran The Bomb short of a military strike, the question becomes who and when? It’s hardly likely the Bush administration will want to engage in yet another military “adventure” before the next guy to accompany the football takes office. On the other hand, Bernard Baumohl thinks the Israelis want to get this thing done before Barack or John assumes the position (so to speak). ABC News reports that the Economic Outlook Group’s Chief Global Economist says a strike would disrupt oil prices (surprise!), one way or another. “It all depends on the success of the Israeli strike. If it was a quick, successful strike and Iran doesn’t block the Strait of Hormuz — a key oil route in the Persian Gulf — Baumohl sees a quick spike in oil prices and then a steady decline. He says that within three days of the strike oil could costs $175 to $225 a barrel. The record of $147.27 a barrel was reached back in July and oil today closed at less than $108. But within three months the price would fall because Iran’s nuclear weapons program would be destroyed or crippled. Oil would cost $70 to $85 a barrel. Of course, Baumohl has a more-dire scenario with oil prices between $200 and $300 a barrel. This happens if the strike fails, triggers a bigger war and the flow of oil is disrupted. In that case, the price of gas in America would climb to $5 to $7 a gallon.”

Back when GM and Ford claimed that foreign sales would keep them afloat long enough to patch their hulls, turn their ships around and avoid reefs of their own making, TTAC called bullshit. First, we pointed out that the domestics’ American losses were simply too large to sustain with foreign profits. Second, we said overseas car markets were hardly immune to the forces sending the States into the doldrums. And so… The Daily Telegraph reports that rising petrol prices have lowered UK vehicle sales to their lowest level since England won the World Cup against Germany in 1966. “The latest sales figures from the Society of Motor Manufacturers and Traders (SMMT) showed that the number of new cars registered last month was down 18.6 per cent on the same period last year. Worst hit were luxury marques and 4x4s, with monthly sales of Aston Martin cars down by two thirds in a year, Land Rover suffering a 58 per cent drop and demand for Porsche models 58 per cent lower than August 2007.” Worse– much worse– is yet to come. “The car market is now in real pain, real free-fall,” Professor Garel Rhys, director of the Centre for Automotive Industry Research at Cardiff University, told the Torygraph. “It is not just the private buyers who are not buying it is also the companies and the fleet side who have decided to pull their horns in, it is a sign of pretty awful times ahead.” Oh, and The Times of India says “Sluggish outlook in India has forced Japanese car major Toyota  to revise and extend further its market share target from the country by as much as 5 years.”

So there we were, joining the speculation that Russian, uh, “oligarch” Oleg Deripaska was about to scarf GM’s HUMMER brand. While that turned out to be a journalistic damp squib, the Russian billionaire that the feds won’t allow on our shores (now that his $500k bribe to former Senator Bob Dole has expired) has found a way to join hands with The General. The Moscow Times reports the deal: “GAZ, billionaire Oleg Deripaska’s automaker, will partner General Motors in Italian engine maker VM Motori, after agreeing to buy the 50 percent the U.S. company does not own.” The Veep of GM Powertrain Europe is thrilled. “Our joint venture agreement with GAZ Group provides business opportunities to expand our diesel engine business with new customers,” Mike Arcamonet announced. To that end, “GAZ will gain the right to build the Italian producer’s light-diesel engines in Russia under license after acquiring the stake from Detroit-based Penske. This according to Yelena Matveyeva, a spokeswoman for Deripaska’s Russian Machines transportation division. Matveyeva “declined to disclose the financial terms” of the deal. I wonder why.

It's official: Chrysler's in talks with everybody and nobody. As if finally realizing that the North American market is lost to it, Chrysler has been going after the much-touted growth markets of India and Russia. Not that there's much to talk about yet. "When we look at alliances in different regions, we have had discussions with multiple companies in Russia," says Chrysler's Tom LaSorda. "In India we have had discussions with many companies." Mr Lasorda also confirmed that the sky is indeed blue. When the talk turns to Fiat, LaSorda gets all bashful, like an eligible bachelor accused of lowering his standards. "Have they approached us? Yes," LaSorda tells Reuters . "At this stage there is no formal discussion going on, but there was an inquiry." And he's quick to point out that Fiat will get with anyone, asserting that "we are not the only ones." In India, Chrysler wants to sell Wranglers through Tata Motors, and it's expecting to announce a new Russian hookup by the end of the year. Between Nissan, Fiat and Tata, the Chrysler plan is beginning to look like rebadging foreign cars while building trucks for others to sell around the world. Then leasing cheap American manufacturing as the dollar continues to slide. Or being sold for scrap when they run out of time to sort it all out. We shall see.

GM CEO Rick Wagoner and his Motown pals maintain that "nobody could have predicted" the recent surge in gas prices. You know, the price hike that's driven a stake through the heart of their high profit light truck biz. Never mind the fact that TTAC and others were bemoaning The General's re-investment in their GMT900 trucks back in '03. Well, guys, here's an article in The New York Times that says that nationalization of oil resources around the globe could lead to a drop in supply. (Maybe we should drill nearer to home? Nah.) OK, it's kind of funny (ironic) that the Gray Lady's piece paints Big Oil as the good guy. But that's not the point. Now pay attention: this trend could mean oil prices will go up again. Which would raise the price of gas. Now there's many a slip between the well and the ship, but do NOT tell us that you're surprised if pump prices go up again. That is all. 

The Detroit News reports that The People's Republic has a new strategy to combat air pollution: tax the shit out of large cars [paraphrasing]. "The tax on passenger vehicles with engines bigger than 4 liters will be doubled to 40 percent from 20 percent, effective Sept. 1, the Finance Ministry said Wednesday in a statement on its Web site. Those buying vehicles with engines sized from 2 liters up to 4 liters will have to pay a 25 percent tax, up from the current 15 percent, it said." So, Buick's big barges get blasted. Ditto Ford's Chinese Volvos and Lincolns. OK, so both companies sell small cars in China as well, as part of their [mandatory] joint ventures. Only just-auto [sub] reports China's new car market has hit the skids. July sales fell 17 percent. "The Chinese vehicle market has cooled this year under the combined influences of higher inflation (reducing consumers' disposable income), increased petrol prices, the effects of the Sichuan earthquake and generally lower consumer confidence (stock markets are down)." Things don't look so bad year-to-date, but the domestics' Chinese bright spot won't be shining a ray of sunshine on next quarter's financials. Beyond that, the threat of official action to tamp-down the JVs to help the home team looms large. [thanks to autoacct628 for the link]

The Daily Vedomosti (a combination of The Financial Times, The Wall Street Journal and Russia's Independent Media) says Russian "oligarch" Oleg Deripaska is making a play to purchase GM's HUMMER brand. ABC News repeats the report without providing any further details– save a few salacious facts about the Russian 28-billionaire's unsavory past. In context, of course. "The U.S. State Department revoked his visa in 2005 because they were reportedly concerned he had not been honest about his business dealings. U.S. law enforcement officials reportedly believe he is tied to organized crime. The allegations add a layer of irony to the possible purchase, as the Hummer has been popular with the would-be outlaw set in the United States. Gangsta rappers like now-deceased Tupac Shakur and 'Gangster's Paradise' artist Coolio owned Hummers, as did Christopher Moltosanti, the young ill-fated capo in HBO's The Sopranos." Less culturally aware commentators may remember Deripaska as Magna strongman Frank Stronach's partner in his ill-fated attempt to "liberate" Chrysler from Daimler. Anyway, GM will neither confirm or deny the report. "We haven't announced any of the discussions that have taken place with any outside parties that are interested in the brand," Hummer spokesman Nick Richards announced.

If you're a manufacturer with operations all over the globe and a model is bombing in one market, what do you do? You send it to other markets to see how it fares. At least that seems to be Toyota's plan for the Tundra and Sequoia, according to Steve St. Angelo, president of Toyota Motor Manufacturing Kentucky Inc. Automotive News [sub] reports he stated today that the humongous "trucks could be attractive to overseas buyers." They have to do something to reclaim their investment in design and manufacturing as they aren't selling here. They halted production on both last Friday to try to clear an inventory backlog, with plans to resume production – most likely at a greatly reduced rate – in November. St. Angelo didn't say just where they plan to sell these gas-sucking mega-trucks, or who they think will buy them, but I have a feeling Europe and Japan are pretty low on their list.

As a Jew with a pretty solid claim on owning a functional sense of humor, I have to say that Hadar Goldman, co-owner of the Zarmon Goldman advertising agency in Tel Aviv, is being disingenuous. His company's ad, depicting a wild-eyed Arab sheik wailing on a Nissan Tilda for its [theoretical] effect on his bank balance, is over-the-top, over-the-line and not-so-funny. What if an Arabian agency created an ad that portrayed Jews as money-grubbing shysters? "It's a humorous campaign that was loved by both the Jewish and Arab worlds," Nissan spinmeister Daniella Ribenbach told The Jerusalem Post. Uh, we'd like to see some data on that Danny. Meanwhile, "It's my opinion that Nissan made a huge error by igniting these [racist] instincts," official Hani al-Wafa told Saudi Arabian TV. "In order for Nissan to keep its interests in the region, it must apologize." And so it will.

Despite the fact that SUV are PC pariahs in The Land of Hope and Glory, despite the fact that unleaded costs $8.74 per gallon, SUV sales are up 11 percent on the year. Londoners are buying up SUVs faster than any other municipality. As London's roads haven't reverted to potholes and cobblestones, there must be some other way to logically explain this trend-defying headline. Are the expat Russian billionaires beefing-up their security entourages? Are conservatives celebrating the demise of Ken Livingstone and his $50/day C-charge plan? Is Clarkson on a Landie kick? Why is Old Blighty leading the Charge of the Light Truck Brigade while we here In The Land of the Free run for our Priora at first sign of $4 gas? Whatever the reason keep in mind that Britons consider things like the Daihatsu Terios an "SUV"– even though it sports a 1.5-liter engine and gets a combined 35mpg. Um, not that there's anything wrong with that…