As much as U.S. automakers, especially GM, rely on China to bolster their global sales numbers and to supply cheap parts, Detroit is scared excrementless that the Chinese may apply the Western technology which had been exported to their shores, and sell cheap cars in the U.S. So far, it hasn’t happened. But it’s happening in America’s underbelly and NAFTA partner Mexico. “FAW Group Corp., one of China’s three largest domestic auto manufacturers, has begun selling new cars for as little as $6,550 in Mexico in what is believed to be the first foray by a Chinese auto-maker into North America,” Canada’s Financial Post reports. This being a Canadian paper, they are probably talking Canadian dollars, so in real money, it would be $5550. Or more like $4999. Scary.

A boatload of about 6,000 FAW cars have been brought to Mexico by Grupo Salinas, a specialty retailer. “They’re not all sold,” company spokesman Daniel McCosh said. “The higher-end and the lower-end vehicles are moving better than the mid-priced models.” That Mexican beachhead is troubling news for Detroit.
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A recently-released Kelley Blue Book survey says that nine out of ten car-shopping Americans have at least one hunk of Detroit iron on their wish list. Even more tellingly, one third of shoppers polled would only buy a car built by Ford, Chevy or Chrysler. That’s a considerable preference for America as a nation-state of ostensible origin compared to Japan (12 percent) or Germany (five percent). “Seeing the domestic automakers’ recent struggle has ignited a heightened sense of patriotism among some American car shoppers, and the latest Kelley Blue Book Marketing Research indicates that people are pulling for the Big Three to survive and thrive,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book. Which is one way to look at it…

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Despite the recent arrival of a Tahoe Hybrid (I’m on it), a Chevy Avalanche and whatever the Cadillac version of same is called in my daughters’ PC school parking lot, the death of the full-size SUV has been well-documented and publicized. Less well known: the mid-size SUV is even deaderer (sorry Andrew). Ward’s Dealer Business tells the tale: “SUV sales took a 39.3% plunge, going from 1.91 million units in 2007 to 1.16 million in 2008. Middle SUVs was the biggest segment loser, with sales sinking 45% in 2008. By comparison, midsize cross/utility vehicle sales were off 6.8%. ‘People are moving out of the midsize-SUV market completely and going to CUVs,’ says Matt Traylen, senior director for Automotive Lease Guide. ‘What people don’t want now is anything with ‘SUV’ in the name.'” Thank Got BMW called the honking great X5 and X6 “Sports Activity Vehicles.” And how’s this for a piercing glimpse into the obvious: “They don’t go up mountains or off-roading. They take their kids to school and go to the grocery store,” Matt says. “A lot of people are waking up and asking, ‘Why did I buy this vehicle?’” And then saying “Now what?”

China’s Passenger Car Association released their numbers for the year. For China, which was used to double digit growth, they are disappointing. Other markets, such as the U.S. would die for them. China’s full year passenger car sales rose 7.4 percent in 2008, the Association says.

Before we delve into them, be warned about Chinese numbers. China doesn’t have a “light vehicle” category. Vans or minivans, such as the GM-Wuling offerings, are counted as “commercial vehicles,” and are not in China’s passenger vehicle count. Also, to understand the market, one must be aware of China’s wild and woolly joint venture situation where cars of the same brand are made by different and often competing companies, and sold through different dealer networks.

Here are the top 10 Chinese passenger vehicle sales as Gasgoo reports them. These are real sales, not cars dumped on dealer’s lots. These are government numbers, based on cars that have been registered by owners and issued license plates. However, they count factories. They don’t count brands.

1. FAW VW: 498,867 units
2. Shanghai VW: 490,087 units
3. Shanghai GM: 468,642 units
4. FAW Toyota: 365,699 units
5. Chery: 356,092 units
6. Dongfeng Nissan: 350,621 units
7. GAC Honda: 305,997 units
8. Beijing Hyundai: 294,517 units
9. Geely: 230,420 units
10. Changan Ford: 202,797 units

Now for a closer view:
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From menno: “My Prius is now down to about 30 miles per gallon on E10 (real MPG, not on the computer – it’s showing 38.5 mpg). 130 miles on the trip meter and over 4 gallons used – you do the math. Just for the sake of comparison, before the loss of real gasoline, I was averaging 44 mpg (real calculations and on the car computer) in the winter, and about 50 in spring and fall, and 48 in the summer. This was with both the 2005 Prius and the 2008, over 48,000 miles on the 2005 and now having 21,000 miles on the 2008. Don’t know if the continuous E10 has made the difference between the computer MPG and calculated MPG, but there is essentially no point in having a Prius anymore. The Prius sucks ethanol tainted fuel like a drunk at a free bar. My wife’s (way) less expensive to buy, more comfortable, zoomier, roomier and nicer Sonata averages MPG in the low-mid 20’s in the winter, 26-27 in spring, summer and fall, and did 32.2 mpg on a 5000 mile trip on expressways and in mountains. As soon as gas prices hit $3.00 a gallon I’m putting the Prius up for sale. Recently, the last gas stations in the area stopped selling 100% gasoline (it was BP). The resulting MPG loss was immediate.” And he’s not the only one who’s turning his back on E10…

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Yes, it’s that time again. Time for the Paris – Dakar Rally (a.k.a. “the most dangerous race in the world”), where large trucks, cars and motorcycles drive as fast they possibly can across the African continent. Oops. Sorry. It’s the Dakar rally now, ’cause it’s taking place in South America, even though Dakar (Senegal) is, you know, in Africa. Last year, the race was cancelled due to “terrorist threats.” The fact that the race features a bunch of Europeans tear-assing across open territory– occasionally mowing down innocent bystanders (called “spectators” by race organizers)– might have a little something to do with it. About.com glibly reports that “A total of 48 deaths among competitors have been recorded since the rally began. Spectators have also been injured and killed either by competitors or their support vehicles.” In any case, the South American version has claimed its first victim: French motorcyclist Pascal Terry. The Canberra Times reports: “”Officially the result of the autopsy revealed that the French pilot Terry died of pulmonary edema… which produced cardio-respiratory failure,” Julio Acosta, chief of the department of operations of the La Pampa province police, said.” No word– yet– on any “spectator” ksi’s.

As the city of Fairfax prepares next week to become the first in Virginia to resume the use of red light cameras, the history of a county intersection offers an important lesson regarding the area’s first experiment with photo ticketing. Of the thirteen intersections where red light cameras were used in Fairfax County, only the intersection Route 50/Lee-Jackson Highway and Fair Ridge Drive reported a significant accident reduction, according to figures provided in a 2007 report by the Virginia Department of Transportation (VDOT) (see page 75). It is also a location where the length of the yellow signal was both shortened and lengthened, providing a rare glimpse into the real world effects of each change.

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60 Minutes nearly killed Audi in North America. After “Unintended Acceleration in the Audi 5000” aired in 1986, Audi sales dropped from 74k sales a year in 1986 to less than 12k by 1991. Sales remained constant until 1996, when Audi debuted a car that would finally tackle the BMW 3-series and the Mercedes C-Class head on. With its still unusual all-wheel drive system, classic German styling and interiors that set the industry standard, the A4 single-handedly revived sales in North America. An Audi fan since birth (when I was driven home in an Audi Fox GTI), I viewed them from afar; Roswell’s nearest Audi dealer lay eight hours away in Dallas. So I rejoiced when I signed the paperwork to purchase the first of the 5-valve V6 powered A4 quattros. Little did I know the next year would be filled with Germanic Sturm und Drang.

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From: GM Dealership Employee Discount <GM_Dealership_Employee_Discount@email.generalmotors.bfi0.com>
Subject: A remarkable loyalty offer for GM owners
To: XXXXX@yahoo.com
Date: Wednesday, January 7, 2009, 6:19 PM

Loyalty works both ways.
To show how much we appreciate your continued business, we’re offering this special purchase opportunity — exclusively to our best customers:

Up to $3,000 Owner Loyalty Bonus Cash1 on almost every new GM vehicle now through February 2, 2009. You can combine your Owner Loyalty Bonus Cash with your GM Dealership Employee Discount2 and most current incentives, including special GMAC financing on select vehicles. So, if you or someone in your household owns or leases a 1999 or newer model year GM vehicle, now’s the perfect time to buy.

See the attached flyer to learn some surprising facts about today’s GM vehicles and for a full listing of the many models that are eligible for this offer.

To learn more, log on to gmded.com.

Don’t delay.
Hurry in to your GM Dealer before February 2, 2009, to take advantage of your Owner Loyalty Bonus Cash. Remember, this special offer can be combined with your dealership employee discount2 and most current incentives, including special GMAC financing on select vehicles.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing this week, from Berlin next week.

Volkswagen makes its million in China: When Winfried Vahland, VW’s honcho in China, stuck to his guns and a 1m sales target months ago, people rolled their eyes. Well, he made it, Automobilwoche (sub) reports. VW sold 844,491 units in China, Audi contributed119,598, newcomer Skoda sold 59,284 – a total of 1,023,373 units. Growth for 2008 was 12.5 percent, above market trend. With this result, and the slight plus in the home market, VW could be the overall winner for 2008.

Audi sells a million worldwide: Audi defied gravity, motor malaise, and assorted other ailments, and closed out the year 2008 with a plus of 4.1 percent worldwide, for a total of 1,003,400 four-ringed units sold throughout the world. In Asia/Pacific, Audi sold 15.6 percent more for the year. Outlook for 2009 is even better, because in the disastrous December 2008, Audi sold 17.4 percent more than in the same month a year before.

SAIC lets Ssangyong fail: Ssangyong Motor Co. has filed for court receivership after if had failed to secure necessary funds to continue operations, the Nikkei (sub) reports. Ssangyong Motor is 51.3 percent owned by China’s SAIC. They only wanted to help if the unions would make significant concessions. Now they may have to. Ssangyong Motor’s board Friday called on management and the company’s union to closely cooperate on voluntary retirement, paid leave, wage cuts and a halt to certain benefits. Commenting on the filing, Ssangyong union spokesman Choi Hyung-gil said: “The decision is very disappointing. We will discuss how to react.”

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GM has responded to yesterday’s story “revealing” that no one wants to buy the Saab brand. The fact that the denial is off the record [via AFP] tells you that either A) The General is involved in delicate, top-secret negotiation to transfer ownership of the Swedish near-luxury brand to a third party or B) they’re lying. The off-the-record comment from “one GM official familiar with the proceedings” smacks of B: “It’s still early in the process. It’s going to take some time.” Which is the one thing– well one of many things– that GM doesn’t have. Meanwhile, Chrysler is also involved in a smoke and mirrors campaign as part of its ongoing and increasingly incredible effort to convince the world that it’s an ongoing and credible commercial enterprise. Ahead of the don’t call it the Detroit Auto Show, Chrysler product development chief Frank Klegon is talking-up the possibility of building a car-based lifestyle truck. It’s a fiction so boneheaded that even The Detroit News was impolite enough to mention that GM had just abandoned said genre (G8 ST RIP), and that Honda’s Ridgeline is a flop. In fact, scribe Alisa Priddle does a yeoman’s job proving that Klegon is lost in space. “This is a segment where many automakers have recognized there isn’t enough volume for all of the players to invest in their own platform, and there is a lot of sharing going on.” And that’s as good as it gets…

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GM has placed HUMMER and Saab under “strategic review.” Which is a fancy way of saying if they could afford to kill them, they would. But thanks to 50 states’ worth of dealer-lovin’ franchise laws and a pile of cash that looks a lot like an asteroid impact crater, they can’t. So they’d like to sell them. But thanks to a global auto industry meltdown– worldwide production is well below 50 percent of capacity– they can’t. So… nothing. Well, your tax dollars hard at work. And soon, Sweden’s. Meanwhile, Automotive News [AN, sub] is confirming common sense, quoting sources familiar with people who know someone who may or may not be involved with the sale but since there isn’t going to be one do we really need to Deep Throat this thing oh what the Hell. To their credit, AN got the HUMMER-Saab-Cadillac channel’s spinmeister to reveal the corporation’s plans for their zombies, now that U.S. taxpayers have a direct stake in their fortunes. Just kidding. “Joanne Krell, a spokeswoman for GM’s Hummer-Saab-Cadillac sales channel, declined to discuss efforts to sell Saab. ‘We are not commenting on the details of the strategic review,’ she said. ‘As soon as we have some details to report, we will.'” As for Ford’s Volvo, everyone and their mother told The Blue Oval Boyz to sell the brand even before the crash of ’07. When Alan Mulally took the reins from Billy Ford, the ex-Boeing exec said no ‘friggin’ way. By the time he admitted to yes way, he couldn’t even get ten-foot poll marks on the brand [see: above]. It’s got to the point where Volvo’s grounded their press fleet. HUMMER, Saab, Volvo, Buick, Saturn, Pontiac, Mercury, Lincoln, GMC– can’t live with ’em, can’t live with ’em.

The Detroit News reveals that page 60 of the Loan and Security Agreement between GM and the U.S. Treasury Department commits GM and Chrysler to a Catch-22. “They would be in default of federal short-term loans if the United Auto Workers [UAW] or another union engaged in a strike or work stoppage.” At the same time, the loan agreement requires GM and Chrysler to bring their labor costs in line with the transplants’ (by February 17 no less). So the UAW is carrying the football; they can nuke GM’s call on the public purse simply by striking. “I can’t see that a strike would serve any benefit right now,” analyst Aaron Bragman of IHS Global Insight told the News. “It sounds like maybe some Republican union-busting language got in there, which would not surprise me.” And it sounds to me like Aaron, and perhaps the Treasury Department, got it exactly backwards. Will the UAW strike GM? No, but they could. And when it comes to negotiations, potential power is as real as it gets.