Our previous blog post made the connection between China's increasing demand for imported oil, The People's Republic's subsidies for the black gold ($40b p.a.) and the policy's inflationary effect on U.S. gas prices. Common sense (and The New York Times) suggest that other "managed economies" are using the same pro-growth strategy, amplifying the inflationary effect on world oil prices. "The oil company BP, known for thorough statistical analysis of energy markets [excellent hat tip to Big Oil!], estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels." Hey, what happened to "Let's all blame the evil speculators?" Anyway, you think the U.S. is "addicted to oil?" Malaysia spent 7.5 percent of its economic output on oil subsidies. Indonesia shelled-out $20b this year to keep prices down. And where there's no political will to let the free market do its thing, there's no way they'll stop. "You talk about subsidies, you’re not only talking about the economy," asserts Purnomo Yusgiantoro, Indonesia’s minister of energy and mineral resources. "You’re talking about politics.” I.e. his job. So they're damned if they do, damned if they don't. And for this you pay at the pump. [thanks to OldDavid for the link]

Those who claim that the current price of oil is a supply – demand deal have some new ammo. Industrialinfo.com reports that The People's Republic of China imported 90.53 million tons of crude oil in the first half of 2008, up 11 percent over the same period last year. And you know all those dollars we send over to China to build the cheap stuff we buy at Wal-Mart? A big chunk of that went to "Angora, Saudi Arabia and Iran" [sic]. "The value of imported oil rose to $64.98 billion, representing a dramatic 85.8% increase in costs." Although China exports some oil (2.37m barrels worth $1.42b), experts reckon the percentage of imported oil will continue to rise. The only possible brake on Chinese oil consumption: the lowering of government subsidies. The New York Times pegs that number at $40b per annum. So far, nothing much happening on that front. All of which means the current status is likely to remain quo. 

Just kidding. Toyota wouldn't say that, what with Motown's implosion about to force the transplants to paint themselves as nativists. But even if they aren't saying it, they're doing it. The Nikkan Kogyo [via Automotive News, sub] reports that the Japanese automaker is shifting non-Prius production out of its Tsutsumi plant to build as many gas – electric vehicles as they can (presumably without working their employees to death). No question: ToMoCo's going Hell for leather. Last year, they sold 281,300 Priora. With these changes, they'll be cranking-out at least 480k units. By the time a single example of GM's Hail Mary-shaped plug-in electric – gas hybrid hits the streets, Toyota will be building their fuel-sipper stateside. ToMoCo will have amped-up (so to speak) worldwide Priora production to 1m unit p.a. Whilst shunning the grammatical consensus on Prius pluratization established by TTAC's Best and Brightest, AN reports that Toyota built "320 Priuses in China last year." What's that all about? 

According to Autospies' spies, Volvo NA is shipping C30s "back to Sweden." Yes, well, the C1-based hatch is assembled in Ghent, Belgium. In any case, the C30 seems to be selling poorly; Volvo's dropped C30 prices in Australia and Old Blighty. This might have something to do with a $22k base price for what is, in essence, a tarted-up Focus. Though the C30 offers more cargo space than, say, a MINI Cooper, the C30's practicality is hurt by its awkward hatch shape. And then there's the Swede's EPA 20/28 mpg via a turbo I-5. The poisoned cherry on top: the Volvo brand is in the weeds, facing a date with Ford's corporate strimmer. Add it all up and the C30 boomerang story seems plausible. Throw a little anecdotal evidence into the mix (how many C30s have you seen on the road lately?) and well… if Volvo can't sell its smallest, most efficient car, what does that say about its odds of survival?

While its competitors were bought out (Volkswagen – Audi) or formed abortive alliances (Daimler – Benz), BMW has long been fiercely, proudly, publicly independent. So much for that, then. These days, The Boys from Bavaria are embracing global alliances, developing EVs with Magna, MINI engines with PSA, and sharing small car platforms with Fiat. Und now BMW is partnering with longtime nemesis Mercedes-Benz. Auto Motor und Sport (AM&S) reports that BMW and Daimler plans to share components across each other's car lines. BMW development boss Klaus Draeger says ja, it's a logical extension of BMW and Daimler's hydrogen fuel-cell technology development thingie (available never). At the mo, we're talking air conditioning units and brakes. Soon, it'll be hybrid technology and robot tanks [just kidding, I think]. With so much technology to share, so much brand image to protect and Daimler's history of stiffing Chrysler, this is promises to be a genuine disaster.

The expression "doing well by doing good" is totally hot in business/academia. This Third Way thinking attempts to reconcile the [allegedly] conflicting notions of "making enough money to buy a Ferrari and a house in the Hamptons" and "getting enough props for being socially responsible to keep the trophy wife happy." As your average Land Rover belches-out enough CO2 to offend every environmental group on planet earth, Land Rover's got to hold a pity party to make their PC bones. And so they have, by donating 60 vehicles (48 Defenders, eight Discoveries and four Freelanders) to the British Red Cross (BRC) and other national Red Cross societies in "troubled" countries (Sierra Leone, Mongolia, Liberia, Lesotho, South Africa). Accepting the gift, Sir Nicholas Young, the CEO of the BRC, remarked that the people they help are often "in the places that are hardest to reach." True dat. And we applaud both the positive impact of this largesse and its PR efficacy. Every time the BBC shows all hell breaking loose somewhere, the guys handing out medical supplies and food are in a butch Defender 110. Our only question: why didn't Land Rover ship some free vehicles to the Red Cross (or other worthy group) in Tata's Indian pridelands? 

With mature markets under-performing spectacularly, Toyota continues to invest in supplying China's endless thirst for cars. Shanghai Daily reports that ToMoCo is about to drop some $529m on increased production capacity in the Middle Kingdom. With volume leaders GM and VW in its sights, Toyota hopes to snag ten percent market share (1m vehicles). Sales are already headed for 700k this year. Toyota is scrambling to meet demand with a production capacity of only 640k units annually. And so its joint-venture plants are getting more money for more cars; Guangzhou Auto Group will double production to 400k units, while Sichuan FAW Toyota will hit 30k and Changchun FAW Toyota will build up to 10k Priora and Land Cruisers. Of course tooling-up takes time; ToMoCo won't be finished until 2010. By which time steel and fuel prices may have taken some of the zest from the Chinese market. Still, in its pursuit/maintenance of world domination, Toyota can't afford not to build more cars in China. 

Anyone remember the 1932 film If I Had A Million? Didn't think so. Long story short, a dying rich man picks eight people at random from the phone book and gives each of them $1,000,000. The best sequence (of course) belongs to W.C. Fields. Fed-up with "road hogs" and "Sunday drivers," he buys a phalanx of jalopies and begins to run the offending cars off the road. Then, when both the hog and Fields's jalopy have been totaled in a ditch, he climbs into the next junker (he's paying a a bunch of kids to follow behind him in "fresh "cars) and looks for a new target. I mention this classic scene because the Tata Nano's $2,500 price has given me ideas. I mean, for not that much money I could remove a lot of first gen Dodge Caravans from the road [Ed: Jonny's convinced that all traffic everywhere would improve if still existing K-Car Dodge Caravans were outlawed]. However, like most of my fantasies, this one ain't going to happen. Looks like the rising cost of steel is turning into the rising price of Tata Nanos. For their part, Tata ain't saying nuthin' 'bout nuthin'. But Automotive News [sub] is reporting that the Indian automaker is trying to cut deals with its suppliers to keep raw material costs down. Luckily for Tata, they happen to own Tata Steel Ltd., the largest steel producer in India. However, as John Adams said, facts are stubborn things– steel prices are up. As for my twisted plans, I should be able to get all the Hummer H2s I need for less than $2,500 real soon. 

Citroen has unveiled its new C3 Picasso, which is Citroen-code for mini-minivan version of their regular B-segment car, the Citroen C3. What is a mini-minivan version? The not-all-that-secret secret is that before Scion gave us the xB and other high-roofed five-passenger vehicles, the Europeans were all over that business. They call 'em MPVs (Multi-Passenger Vehicles, en anglais) on that side of the pond. The term can describe anything from an eight-passenger Chrysler Grand Voyager to a top hat-friendly version of a B-segment car (Fit, Yaris, MINI). The C3 Picasso fits into that last category, where it will compete with the likes of the Opel Meriva, Renault Modus, and Honda Jazz. Citroen is saying it'll install 90 and 110hp diesels, as well as gas engines good for 95 and 120hp. All will tote around what is pretty much guaranteed to be an extremely flexible interior of folding, flopping seats. Let's just hope that sinking European sales don't make this the Picasso's blue period.

Pixamo Gallery

Give all the hype surrounding Chevrolet's forthcoming plug-in electric – gas Volt, I guess we've got to call the Chevrolet Beat GM's mini-Hail Mary. Or is that MINI Hail Mary? Actually, let's stick with the small "m." Lest we forget, the Beat is/would be no less a Daewoo than the South Korean-built Aveo. Regardless, GM's Car Czar Maximum Bob himself is floating the micro-car-shaped trial balloon to The Wall Street Journal, as above. Freelancing Detroit News scribe Sharon Terlep's lead makes it clear that obfuscation is the order of the day. "General Motors said it is giving a higher priority to deciding whether it will bring the next-generation Chevrolet Beat mini car — a vehicle it sells overseas — to the U.S. market in the 2012 timeframe." [Note: higher. Not highest.] Meanwhile, Ford is making a similar move. I mean, mulling. "Ford Motor Co. said Thursday it has no plans on the table to bring its micro-sized Ka mini car to the U.S., but it is monitoring the success that Smart is having. 'We have small cars on the shelf all around the world,' Ford spokesman Jay Ward said. 'If at some point we decide to bring [the Ka] over here, we would be in a position to do so.'" Sensible caution or institutional paralysis? We report, you deride.

While the 4th is an American day of celebration, it's a day of national shame, disgust, and disappointment for our British friends across the Atlantic (Jeremy Clarkson, in particular, is said to be spending the day sobbing and eating some kind of pie with meat, rather than apples). To help combat their dreadful feelings, BMW of UK has put out a press release on the just revealed new uberlux 7-Series sedan. Not surprisingly, it will holster the new twin-turbo V8 engine (badged 750i in The Land of Hope and Glory). The 740i name returns, denoting the sublime 3.0-liter twin turbo six from the 335i, making 326hp– as much power as the last gen 745i V8. The force-fed six will rocket the 740i to 60 in six seconds. Naturally, the "Biggest Losers of 1777" will get a straight-six diesel 7, stumping-up 245 hp and returning some 32 mpg. BMW UK estimates the six-pot oil burner will account for 85 percent of 7-Series UK sales. With a 0 – 60mph time of 7.2 seconds, why not? So, is BMW ready to bring a six cylinder 7-Series to America? Uh, no. But ours (like theirs) will come with enough gizmos to make an S-Class nervous: optional four-wheel steering (!), side view cameras, variable damping suspension, night vision, and something called "post warranty heart attack." On sale in the UK in November; anticipate a similar date for us Yankees. 

Ah, to be the head of a "managed" economy! Let's say you want to clean-up Bejing's foul air for the Olympics, so athletes don't retch, collapse and die of asphyxiation in front of billions of international onlookers. Simple. First, ban 300k cars in a single stroke. Sorry, your car is illegal. Drive it between now and September 1 and we'll confiscate your car and throw your ass in jail. "The next stage," ABC News [AUS] reports. "Will be for all private cars to be banned on alternate days using an 'odds and evens' number plate system. This will start on July 20 and is expected to take 45 per cent of cars off the streets." That's 45 percent of the 50 percent of Beijing traffic that remains after the first ban. Next? "Factory closures and a halt to major construction will also occur during the same period." Anything else? Raise gas prices. "State-owned oil companies, now subsidizing fuel prices, have been losing hundreds of million of dollars," The Detroit News reports. "Today, Chinese drivers pay $2.85 for a gallon of gas versus $4 in the U.S." Tomorrow, more. China's leaders will work on kicking-out foreign automakers eventually. But that's enough for today, yes?

Last year, France introduced a system known as "bonus-malus." Under the scheme, people who buy gas guzzlers have to pay a €200 – €2600 penalty. Consumers option for something more "environmentally friendly" get a €200 – €1,000 bonus. Automotive News [sub] reports Environment Minister Jean-Louis Borloo plans to "amplify" the program. Car buyers who purchase "extremely polluting" vehicles will soon pay an additional annual fee. As in carbon tax. Borloo didn't say when he plans to start the extortion new program. But here's the best part: "Borloo has said in the past that the system of penalties and rewards applied to vehicles could be extended to other products such as electronic goods." Liberté, Egalité, Fraternité!

To bring you up-to-speed (so to speak) on Norway's homegrown EV maker: "In 1999, Think [was] bought by the Yankee giant Ford Motor Co.," LA Times writer Dan Neil relates. "which was scrambling at the time to comply with California's Zero Emission Vehicle mandate, essentially requiring automakers to build fleets of electric vehicles. Ford renamed the company Think Nordic and began a complete redesign of the car. When, in 2003, the American automakers succeeded in modifying California's mandate, Detroit's flirtation with electronic vehicles ended. General Motors Corp. famously killed the EV1 program, and Ford sold Think to a Swiss electronics firm." So Dan flew over to Aurskog to have think about the recently resurrected Think (and avoid using the word "think" until the summation). Once again, range. "Now, after several course corrections that added perhaps 20Still the Think City — a 2,449-pound runabout with plastic body panels and an official range of 112 miles on full charge — hums along." AND [allegedly] meets federal crash and safety standards, thanks to FoMoCo development. While Think has yet to think-up a suitable anything plan for the U.S. market, Dan thinks Think proves that EVs are viable. I think. "Is a safe, practical electric car possible? The answer seems to be yes." 

Presuming, of course, you're reading this in North America, rather than, say, New Zealand. NZ's Otago Daily Times claims to be surprised (surprised I tell you) by the new Euro-Accord station wagon. "Its arrival comes as part of this month's rollout of an all-new Accord Euro, and completes a freshening of the Accord range that started when a new iteration of the larger, softer V6 was introduced earlier in the year." Not only was scribe David Thompson caught unawares by the Accord wagon, but his efforts to put the wagon through its paces were thwarted. "My plan to preview the new Accord Euro with an extended drive in the upper South Island was thwarted when fog disrupted early flights out of Dunedin at the start of last week. By way of partial compensation, I managed a short drive around Dunedin in one of the first new Accord Euro sedans to arrive here." And Davey was… unsurprised! "Not surprisingly, the car I sampled still felt a little tight mechanically." What exactly does that mean? Your imagination will have to fill in the blanks. Meanwhile, should Honda build an Accord wagon stateside?