While GM, Toyota, Nissan and Mitsubishi are readying their electric vehicles, a new contender has emerged and is aiming to beat them all to the punch. Tata motors, in conjunction with Norway’s THINK!, plans to launch an electric car themselves. Reuters reports that the car will be based on the Tata Indica and be launched in Norway within one year. S. Ravishankar, senior general manager at Tata Motors’ engineering research centre, says that the car can run for 175 km (110 miles) to 200 km when fully charged with a “two-pack” battery, but mileage could vary according to the battery used. (Ya think?) There’s little doubt that, if successful, Tata will use the Jaguar/Land Rover global dealer network to sell these cars. “Could I interest sir in a Jaguar XJ? A Supercharged Range Rover sport? A Tata Nano? or an Electric Tata Indica?” Uh, maybe not.

The market for diesel technology just got a little more interesting. Nissan has announced they’ve become the first Japanese car maker to launch a diesel vehicle in Japan for six years. Nissan and Renault co-developed the X-Trail 20GT SUV’s oil-burning engine to create the world’s first Japanese emissions-pleasing “clean” diesel. The only other diesel car that meets the world’s toughest particulate regs: the Mercedes-Benz E320 CDI sedan. The Merc costs 8 million yen ($73,510); the X-Trail 20GT just 3 million yen ($27,710). Other car makers aren’t far behind. Volkswagen, Honda, Mitsubishi and Subaru are all planning to offer diesels in Japan. Meanwhile, Toyota’s pulled all diesels from their Japanese line-up (the last being the Land Cruiser Prado) and continue to push hybrids. With the Japanese government planning on placing consumer incentives on diesels meeting the new standards, and Toyota and Honda’s hybrids set to fall in price, it looks like Japanese enthusiasts will have a genuine diesel vs. hybrid debates. Lucky them.

It was Marx (Karl, not Groucho) who said that history repeats itself-– albeit the first time as tragedy, the second time as farce. Between the World Wars, Talbot built cars that were among the most expensive in Europe, and amongst the most beautiful ever. The post-war period of austerity was hard on Talbot; the company was integrated into what was later the European affiliate of Chrysler. When Peugeot bought Chrysler’s European operations in 1978, it unearthed this proud but almost dead brand, and sold some undistinguished cars for a few years (until it changed its mind about the whole idea). Fast forward. According to Automobilwoche, PSA Peugeot Citroen is now planning the add further disgrace to injury. Renault-Nissan’s Dacia marque of superaffordable cars is a runaway success, which Peugeot would like to emulate without damaging its present brands. So it’s thinking of importing cheapo third-world-built cars and marketing them under the Talbot name. Aaargh! Dacia is a great idea whose time has come, managed with considerable skill. But some marketing people have no respect for historical significance. Why not just think up a new brand name? Personally, I’d rather drive something called Guglhupf or Superfromage than a made-in-India Talbot.

Nissan’s two divisions did well in August 2008, thanks to a heavy dose of incentives. Nissan division sales were up 14.2 percent over last year, but car sales flat at plus 0.6 percent. The Altima is outselling all other Nissan cars combined (25,298 units), down just 0.5 percent for the month, up 9.2 percent year-to-date (YTD). Versa sales took a breather for the first time in months at 8,015 units, down 5.2 percent for the month (up 15.7 percent for the year). Suprisingly, Nissan’s trucks/CUVs did well, up 22.7 percent. Dealers pushed another 6637 Rogue CUVs out the door, and racked-up double-digit percentage sales increases for the Frontier (55.5 percent), Xterra (76.9 percent), and Quest (64.4 percent). The gains are a complete U-turn from whopping drops just two months ago. The Rogue jump certainly makes sense, cannibalizing the Murano and probably getting some mileage out of its relatively high MPG ratings (for the segment, at least). The larger new Murano CUV continues to sell off the pace, down 22.9 percent , and Titan down 15.9 percent. On the luxury side, Infiniti sales rose 8.0 percent over last year. A 7.7 percent drop in G35 sedan sales were offset by a 27.3 percent rise in FX CUV sales. But that’s just 300 vehicles either way. If anyone’s counting, Godzilla GT-R sales are 484, and 631 in 2008. And guess what? No factory incentives involved.

I prefer to buy my shopping from a company in the UK called "The Co-op." It's an ethical supermarket, which invests its profits into schemes which benefit society (says them). This got me thinking, would you NOT buy a car from a company for moral reasons? Henry Ford I was a raging anti-Semite, Toyota overwork their staff, Nissan are bullying a small company to relinquish www.nissan.com (despite Nissan computers traded as "Nissan" back when Nissan was Datsun) and Volkswagen was borne of a brutal dictatorship. Maybe you can't bear the thought of your money going to GM to fund their outrageous executive pay schemes? Or maybe there's a company who you LIKE to buy from because they support a cause you like? Do morals or some other personal belief come into your car buying habits?

Discuss Detroit's bailout plans with one of its well-informed backers, and they will inevitably bring up the Chrysler bailout of 1979. Chrysler's near immediate return to profitability after receiving low-interest government loans is considered proof that U.S. government intervention in the American auto industry can work. After all, Chrysler paid back all its federal loans seven years early. But this comparison doesn't hold water. If anything, the bailout of '79 points out the many reasons for opposing the next big Detroit giveaway.

Bailout backers claim that low-interest federal loans helped Chrysler turn its business around. But there are loans and there are loans. Detroit's lobbyists [correctly] call this year's Department of Energy funding “an incentive to help the country meet its energy goals.” Back in 1979, Uncle Sam's money was universally and unashamedly acknowledged as a bailout.

Bottom line: the forthcoming $50b in low-interest government loans will arrive with far fewer and less powerful strings attached than the $1.5b lent to ChryCo back in the day.

When Chrysler came begging to congress in '79, it was in the midst of massive restructuring. The automaker had already sold or shuttered huge portions of its business, laid off workers and extracted then-historic concessions from the UAW. Even so, Congress was in no mood to give without asking. Our legislators placed significant conditions on the eventual bailout package.

To qualify for loans, Chrysler was forced to raise another $1.5b in private capital, present a convincing plan to return to profitability, and accept Treasury oversight of its implementation. This included the ability for the treasury to shuffle Chrysler's leadership in order to provide "a sound managerial base."

Needless to say, the “un-bailout” of 2008 is unlikely to include any such conditions.

The first $25b which has been authorized– but not yet appropriated– will be used to retool plants to build more fuel-efficient cars. But Detroit is transitioning to increased fuel-efficiency anyway, thanks to both market demand and beefed-up fuel economy regulations. And though final rules for the loan program have not yet been drafted, Washington doesn't appear to be asking for any more than business as usual from Detroit.

Considering the risk to taxpayers, Detroit needs to prove there is at least a chance it will be able to pay these loans back.

The key to Chrysler's post-bailout success was a well-grounded turnaround plan rooted in solid products. The K-Car and minivans were the right products at the right time. The government could invest in Chrysler with some confidence that it would return to profitability. Especially with Treasury officials closely monitoring the turnaround. Not to mention the salutary effects of a little job insecurity among Chrysler's execs.

Today, the federal government has no such grounds for optimism in Detroit's short-term future. Chrysler's new-product pipeline is a wasteland as far as the eye can see, with only the Hornet compact standing out from the Nissan re-badges and mild re-skins.

GM is banking on the Volt EREV to turn its fortunes around, but without inexpensive, fuel-efficient options in the meantime, the General won't survive to see the [initially] low-volume Volt turn a profit. Nothing minivan-like looms on GM's horizon to justify a huge, public money investment.

Ford alone shows signs of the kind of across-the-board revamping demanded by the dire times, bringing proven, paid-for and popular European models stateside over the next several years.

But congress won't be in a position to bail out specific automakers based on their turnaround plans; The Big 2.8 are approaching congress as a single block. What's more, they're framing the bailout in terms of environmentalism and nationalism (i.e. an entire industry in decline). This plan seems specifically designed to shield individual automakers from scrutiny and accountability whilst manufacturing a atmosphere of crisis.

Though rationales for the bailout are expressed in terms of decreasing America's dependence on foreign oil, this is a red herring. As Farago points out, consumer tax breaks make far more sense as a means of approaching this problem. And contrary to the all-for-one talking points, the American auto manufacturing segment is not in ruins. Transplant factories still build high-quality, profitable products across the land.

This bailout then is a political decision, motivated by political goals and wreathed in nationalist rhetoric. It seeks to collectively rescue several failing firms in a rapidly-changing industrial landscape.

As such, its closest comparison is to the British Leyland debacle of the 1970s. Then, an emotional attachment to failing British car brands cost UK taxpayers billions before the whole mess fell apart in a pile of rust and faulty electrics.

Without principled political resolve from Washington, Detroit faces a similar fate. Even with appropriate terms and conditions, Chrysler's return to the brink of bankruptcy– via a series of bone-headed product decisions and executive greed– demonstrates conclusively that, ultimately, no amount of money can save an automaker from its own incompetence.

Of all the failures that have led GM to the brink of bankruptcy, the automaker's failure of imagination is the most profound. Never mind the plug-in electric – gas hybrid Chevy Volt. How about conjuring a vision of a company with two or three tightly-focused brands that each produce a handful of distinctive, class-leading and profitable vehicles, that markets them with relentless focus, and stands behind them with a national network of honest, efficient and courteous salesmen and mechanics? Whatever else Car Czar Bob Lutz can say about GM's product strategy, that ain't it. Which begs the question: what does The General want to do with U.S. taxpayer’s money?

The proposed cure is symptomatic of the disease. Like General Motors’ endless, target-less turnaround, the automaker’s plans for low-interest federal loans are utterly vague. GM won’t disclose exactly how much federal money it wants, or what they want to do with it. “We know the legislature authorized up to $25 billion," GM spokesman Greg Martin told the St. Louis Post-Dispatch. "But the amount that could really make a difference likely is much higher.”

Of course, that all depends on who gets how much and what Martin means by the phrase “make a difference.”

If GM wants a share of the proposed $25b in federal loan guarantees to subsidize production of the company’s “game-changing” plug-in Volt, six to ten billion ought to do it. Free marketeers may wonder why American taxpayers should subsidize the producer (GM) rather than the consumer (a buyer of ANY vehicle that meets a certain mpg rating), but hey, Michigan is a "battleground state." American votes jobs are on the line. 

Did I say $25b? In the run-up to and (especially) including the Democratic and Republican national conventions, Detroit has been lobbying pols to increase the federal tax cash to $50b. Michigan Senator Debby Stabenow hinted that even more federal funds might be needed (a lot now, a lot later). This desperate doubling down stripped away any pretense that the supposedly eco-friendly federal loans will pay for Uncle Sam's green dreams. It’s bailout bucks, pure and simple.

Well, not so pure and not so simple.

The $25b loan program is part of last year’s Energy Bill. Your elected representatives mandated that the funds be used to develop and build fuel-efficient vehicles. To channel these loans to The Big 2.8, applicants (supplicants?) must use the low-interest (4.5 percent) loans to re-tool U.S.-based production facilities to manufacture gas-misers. The bill also stipulates that The Department of Energy– the agency charged with steering boatloads of Benjamins to Motown– must give “priority” to assembly plants that are at least 20 years old. (Toyota and Nissan have one qualifying plant each, and they don’t want/need the money).

Of course, federal programs are almost infinitely… mutable. Even though the Energy Bill’s wording seems clear enough, Detroit’s spinmeisters are already pointing out that the final rules are yet to be written. (The final definition of applicable vehicle types should be a fun read.) Taxpayer grumbles about federal favoritism aside, dumping more money into this part of Uncle Sam's trough will be easy enough.

Assuming (as we must) that significant federal funds will flow into GM’s new product development, it should be remembered that the tax money will replace GM cash already allocated for that purpose. GM can then use the [former] development money for housekeeping: union buyouts, unconscionable executive compensation, Delphi's pensions, etc.

So, what’s the bet that the $25b to $50b (to whatever) loans won’t do any damn good? And by “good” I don’t mean that GM will end-up with electric Volts or gas-miserly Cruzes. I mean what are the chances that our tax money will provide anything more than a temporary, ineffectual band aid for GM’s arterial spray of red ink? 

Even if you gave GM a blank check and said “Here, whatever it takes. Build something that will kick the imports (the other guys’ imports, not yours) ass,” they couldn’t do it. Or do it often enough, what with eight brands selling over 40 different(ish) products.

Heads up feds: tight money has not been– nor is it now– the bane of GM’s existence. The General’s goose was cooked by managerial and union greed, sloth, arrogance and, above all, bureaucratic bungling. As anyone who’s ever worked for a company with its head up its ass will tell you, giving copious amounts of fresh capital to execs in charge of a dysfunctional corporate culture to “fix” their business is like trying to extinguish a log fire with gasoline.

If we used our $25b to buy out every GM senior manager and union worker currently employed by the company, and then let the new guys get on with it (with performance-related pay), GM might dodge the bankruptcy bullet. Or, alternatively, embrace C11 as the best way to create a sustainable American automaking endeavor. In fact, the new team would do whatever they'd have to do to survive. And if they didn’t, they wouldn’t. Imagine that.

The Detroit Free Press reports that early August sales estimates show a 14.4 percent drop in new metal moved. But don't turn off your pacemaker yet; the biggest shocker is that Detroit is bearing the overwhelming brunt of the downturn. Estimates from Edmunds show that Chrysler sales dropped 34 percent, GM slid by 27.5 percent and Ford endured a 16.3 percent drop compared to August a year ago. Toyota continues to shed sales but grow market share, slipping by half the industry average at 7.2 percent. The winners in August were Honda, which posted a 0.9 percent increase, and Nissan which defied the market to bump sales by 2.3 percent. On the whole, the market appears to be picking up slightly, with a 13.1m seasonally adjusted annual sales rate (SAAR) up from 12.6m in July. With consumer confidence rising in August, the overall economy appears to be taking its Prozac, but don't expect an auto sales turnaround this year. GM's sharp losses show that even with once-popular "employee pricing" incentives, consumer demand for cars isn't what it once was.

A little behind-curtain action for you: When I finished with the 2008 Nissan Murano, I asked Farago if he was interested in a "Take Two" review. He wasn't. As I had even less interest in writing one ("Ride is softer than butter… no! Softer than veal fat"), I didn't. Why waste time insulting a fat pig when I can be losing hundreds of dollars at online poker? As you can imagine, I wasn't exactly doing cartwheels when the Nissan Rogue showed up. For all I knew it was a half-pint version of its (uglier) big brother. And a CVT, too? I was upset. But was I right?

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.

My wife and I have been studiously and dutifully test driving cars because we are about to buy two. So far she is insisting upon the better look, roominess and fun to drive 2009 Mazda6. I can't blame her as it is fun and I love our 05 3 hatch. And as of now, after driving the Accord and Nissan and Fusion it has now become my very favorite smooth and buttery 4 cylinder car.But here's the problem… We drive long distances to visit out second home in the mountains of southern MO and we are also looking for a great road cruiser. This is done every two weeks. We want the luxury, but still some hinting of sportiness. Now, after testing so many cars, is it possible that the very best drive for the money is a Hyundai? We half jokingly tested the Genesis…but after the drive, we both stood there with our six foot son and wondered what had just happened. It was absolutely wonderful:

Powerful and quiet 6.
Road softer and sportier than the Avalon.
Great luxury MPG.
Tomb quiet.
The insides felt like Euro pillow mattresses.
Great looks, finish and outstanding paint.
Room for the kid(s)to enjoy the 7 hour drive.
This for around 35K?????

So help us! Please tell us what we missed before we buy! This cannot be true! – PPellico

As you might expect, with Toyota nipping on GM's heels sales-wise, the two companies' financial arms have also been neck-and-neck. Automotive News [sub] reports for the first half of 2008, though, Toyota Financial Services pulled ahead of GMAC as the biggest U.S. auto lender. Research done by AutoCount estimates TFS had a 6.35 percent share the lending market, while GMAC held 6.2 percent. With GMAC's cuts in leasing, they expect TFS to stay ahead for the rest of the year. In the first six months of this year, 58 percent of Toyota, Lexus and Scion vehicles sold in the U.S. were financed in-house. About 46 percent of GM vehicles in North America were financed by GMAC. Other captive finance companies in the top ten were: American Honda Finance at fourth overall with 4.95 percent of market share; Ford Credit at fifth with 4.77 percent; Chrysler Financial holds seventh place with 3.15 percent and Nissan Infiniti Financial is eighth with 1.87 percent market share. The other four spaces are held by various banks. Perhaps a more interest and relevant stat would be the total lost in over-estimated residuals and bad credit risks.  Anyone want to guess who'd be most likely to top that list?

As you may have seen, Car and Driver did what they're supposed to do and stuck five Nissan GT-Rs on dynamometers to find out just what's up with the cars' world-beating performance. Er, I should say to find out what's up with the discrepancy between their various performances. C&D concluded that U.S. non-press cars make about 520 hp at the crank. Our man Berkowitz concluded that Nissan is feeding the buff books (and Edmunds) ringers. Regardless, does it matter? Here's a for instance… You know the Bugatti Veyron and how it makes 1,001 hp from its quad-turbo, 8.0-liter W16 motor? Well, in Europe it makes 1,020 hp. Something to do with the difference between our more accurate SAE net and the funny Euro (probably metric) whatever system. How does Bugatti explain it? The engines actually produce 1,040 hp, so who cares? And that's kinda my point. Remember when Mazda got "nailed" a few years ago for overrating the horsepower in the Miata. They said it made 155 hp, but in reality it only made 142 hp. Did it really effect the car? Or, closer to (my) home 2006 Subaru WRX had 230 hp when I bought it. Then a few months later the SAE rejiggered how they measure horsepower. Now my car makes 224 hp. Which is actually three horses less than my 2001 WRX. Do i care? Actually, I do. That really pissed me off. You?

Nissan's taking a hit where it didn't expect, thanks to their failing full-size truck sales. According to the Madison County Journal, when Nissan built their plant in Canton, Mississippi, the automaker struck a deal with the county for accelerated depreciation on machinery. The company claimed it would depreciate faster, as it would be "used more frequently across multiple work shifts." Obviously, the local politicians would have said yes to a back massage write-off clause to get the plant. So they agreed. But things aren't working out quite like they planned. The county pays $1.67m per year on debts related to incentives they bestowed upon Nissan. Last year the plant only brought in $1.64m in taxes. And now that the plant isn't generating the estimated tax revenue due to production cuts, the county wants to tax the machinery using a standard depreciation scale. Of course, Nissan protested, saying "the assessment should not be based on a bond payment, it should be based on true value… nothing has changed to take away from the spirit of [the original] agreement." The county says that that may have been the case originally, but running two shifts instead of three changes the equation and doesn't wear out the machinery as fast. The county board of supervisors passed the new tax assessment unanimously. Anyone want to place any bets on whether Nissan will invest any more on expanding their operations in the Magnolia State?

Larry Webster at Car and Driver (C&D) noticed a marked performance difference between some of the five Nissan GT-Rs the mags' reviewers had driven (in case you were wondering, Berkowitz' GT-R count is zero). Suspecting "a ringer," the eds decided to stick the uber-Nissan on a dyno. The Godzilla press car was making 420 horsepower at the wheels. Using an estimate of 20 percent loss, the buff book reckoned the GT-R produced 519 horsepower at the crank. This is, of course, based on that assumption (despite Nissan's claims) that the GT-R has unusually low crank-to-wheel power loss. The carmaker attributed the difference between published and actual hp to "early build" cars' varying computer software programming. Translation: Nissan sent out ringers so that C&D, Edmunds, and the other buff books could trumpet "GT-R DOES 0-60 IN 1.1 SECONDS!" As most of us won't be driving a GT-R, the car's PR importance vastly outstrips the importance of honesty, consistency and integrity. Obviously. And this renews questions (raised at the time by TTAC and others) about the validity of the "production" GT-R's Nürburgring record-setting lap time.