Green Car Congress reports that the Senate Committe On Finance is recommending (PDF) increases in the amount and size of the plug-in hybrid electric vehicle (PHEV) tax credit. The proposal has been put forward as part of Barack Obama’s stimulus plan, the American Recovery And Reinvestment Act Of 2009. The availability of PHEV tax credits would be doubled under the plan, from 250k to half a million vehicles sold before the credit phases out. The tax break amount is unchanged, with a base credit of $2,500 per qualifying PHEV plus $417 for each kilowatt-hour of battery capacity in excess of four kilowatt-hours. For vehicles under 10k lbs, the maximum credit is $7,500. Credits increase by vehicle weight, but the maximum (for vehicles over 26k lbs) is $15k.

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Poor Ford. All they wanted to do was claim to offer “the most efficient midsized car in America.” “We’ve been pretty clear, probably annoyingly clear, to Toyota that we’re comparing Fusion to Camry,” Ford spokesman Mark Truby tells USA Today (via Daily Tech). After all, the Camry gets a paltry 33 city/34 highway rating from the EPA. At 41/36 mpg, the Fusion is clearly a more efficient mid-sized car than the Camry. But wait!

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Remember the good old days when the US was committed to free trade, and constantly complained about Japanese protectionism? Those days are long gone, as the US is now a world leader in national bailouts and it has become Japan’s turn to stand on free-trade principle. Detroit News‘s Christine Tierney reports that Japan has no interest in joining China, Germany, France, Russia and the US in subsidizing either production or consumption of vehicles. “We regard the auto industry as very independent from the government,” said Noriyuki Shikata, director of the Second North America Division at Japan’s Ministry of Foreign Affairs. “Our government hasn’t extended massive subsidies to companies. A company like Toyota has accumulated some cash and should be able to survive.”

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The Hyundai Sonata is a great car for people who don’t care all that much about cars. That’s not a slam. I have a friend who considers his car a device for moving bicycles around. Another buddy would drive a large teapot if it promised a cheap commute. These are bright, successful guys for whom “driving dynamics” are as valuable as GPS on a squirrel (hunters excluded). These motorists deserve a decent ride. Once again, Hyundai’s stepped up to the pump with an automobile that’s so generic you expect to find it in the paper towel section of your local supermarket.

I find the whole “TTAC is pro-Toyota” meme a little strange. Have a look at our coverage of their greenwashing or our reviews of their automobiles (including our excoriation of various Scion). Yes, The Big 2.8 get ten times the coverage afforded the transplants. But we’re an American-based website, and the Motown meltdown is the biggest story in the history of American automaking. Yes, our Bertel Schmitt recently wrote a compare and contrast blog, pointing out the differences between Toyota’s response to the auto industry meltdown with GM’s. But it’s the truth dammit, and that’s the business we’re in. Feel free to discuss TTAC’s “perception gap” below. Meanwhile, I want to point out that Autoblog’s recent “discovery” [via their BFF at AutoLine] that Toyota has “only” $18.5b worth of cash, supposedly placing them in the same boat as, say, GM, is wildly disingenuous.

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For a long time, the Chinese car market looked more like the American and less like the European markets. They liked big, they liked SUVs, they liked real cars with a trunk. For a long time, hatchbacks and subcompacts were unsalable in China. Last year, the picture changed. More and more low cost subcompacts are getting on Chinese roads.

“In China, new-car sales last year rose just 6.7 percent to 9.38m units, slamming the brakes on the market’s double-digit growth. Nonetheless, a batch of automakers enjoyed nearly 30 percent jumps in sales,” the Nikkei (sub) writes. And who might those be?

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CEOs usually don’t get paid for gloomy forecasts. It’s their job to instill at least a modicum of stockholders fantasy. If two of them paint a dark picture the same day, take note. Reality will surely be darker.

Speaking at a meeting held in Riyadh, Saudi Arabia, Renault & Nissan Jefe Carlos Ghosn said that worldwide sales of all new cars will likely drop 14 percent to 55 million units this year, the Nikkei (sub) reports. The Nikkei: “His projection means that new-car sales, which slid 9 percent last year, will take an even steeper tumble in 2009. Ghosn also predicted that it will take at least seven years for global new-car sales to recover to their peak level of 69 million units, seen in 2007.” Ghosn expects that the current economic slump will drag on:
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At the moment, Chrysler reimburses a dealer for the cost of topping-up the gas tank on a car the dealer sells to a customer. No mas. That little tidbit was buried deep in the Detroit News story about Chrysler’s incipient “traveling roadshow”– a corporate effort to “convince” dealers to order more cars despite the fact that no one’s buying them and it costs money for the dealers to have vehicles sitting on their lots. We also learn that Chrysler has frozen the labor rate for warranty work, scheduled to rise in ’09. “‘I think they understand the place we are in and understand the need for all parties to put some skin in the game,’ said [former Toyota Prez and current Chrysler Co-Prez Jim] Press, who received a standing ovation during the meeting with about 400 dealers.” Somehow I don’t think it was that particular statement that earned Mr. Press the standing O. Perhaps it was his pledge to work for $1 until Chrysler paid back its four soon-to-be seven billion dollar loan. Just kidding. Unfortunately. Anyway, Chrysler’s set a target for channel stuffing– I mean, dealer orders…

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How reassuring. Not to taxpayers, obviously. We’re supporting this dead brand with $13.4b of our tax money– if you don’t include GM’s share of the Department of Energy’s $25b retooling loans (remember those?). Still, Saturn dealers must have been pleased as punch to hear The General claim– at The National Automobile Dealers Association (NADA) conference in N’orlins– that it will continue to build models for Re-Thinkers through 2012. Why “in some cases,” they’ll keep creating Saturnalia until 2013! After the meeting, GM Marketing Maven Mark LaNeve told Automotive News [sub] “We have all the current products funded. What we told them was the biggest issue is slimming down our product cadence. We don’t have enough finances to fund all these brands.” What new product cadence would that be? “I’m talking about vehicles with a fluid, uniform design theme, top-notch engines, dynamic chassis philosophy and a focus on detailed interior and exterior execution.” GM Car Czar Maximum Bob Lutz, “Product Will Reign,” 2005. Two years later, via Edmunds, “If this lineup doesn’t work, I’m out of ideas.”

General Motors hasn’t made money on its core auto business since 2004 – and did nothing. Same cars, same talk, same mismanagement. GM is in the government’s intensive care, hangs on a the tax payer’s money drip, and still hasn’t changed.

Contrast that to Toyota. Toyota will announce its first operating loss in its history – approx $1.6b, less than GM’s monthly cash burn – and Toyota went to battle stations months before the announcement.

Toyota does everything GM failed to do. They changed the management. Akio Toyoda, grandson of the founder, will take over as president. Even before he’s officially taking the job, Toyota “appears ready to overhaul its entire operations, from development to production to its sales network,” the Nikkei (sub) reports. Nothing is sacred. Plants are idled worldwide. Output is slashed. A few days ago, the company held a meeting in Nagoya that was attended by 1,000 representatives from Toyota dealerships across the country. Toyoda made it clear that he would not hesitate to drastically revise the firm’s domestic sales structure. And that’s just the beginning. More drastic moves are afoot.

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Definitely infrequent for a few weeks while I’m in Europe, hunting the elusive Euro: 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 Berlin – when I’m in Berlin.

Idle chatter: More and more drivers of Japanese cars will have their rides die on them at an intersection, only to miraculously re-start once they mash the pedal. “Japanese carmakers have been equipping more and more of their passenger cars with a function that automatically kills the engine when the vehicle is stationary,” the Nikkei (sub) writes. Mazda aims to make the idling stop function available with some configurations of its fully remodeled Axela to be launched this summer. Toyota started offering a newly developed idling stop system on some of its Crown Comfort sedans in August. Toyota plans to install the system in a wider range of its passenger cars in the future, with a focus on Europe. Mitsubishi aims to offer some of its European model Colt cars with an idling stop system starting this year.

Ready, set, fire: Toyota plans to reduce its full-time work forces in North America and the U.K., by more than 1,000 jobs, the Nikkei (sub) says. The move is unprecedented for the automaker, which has protected full-time jobs even in tough times. A rare exception was in 1950, when it let go roughly 1,600 workers in Japan through early retirement programs. Toyota employs nearly 30,000 in North America, mainly at seven assembly plants, and about 5,000 in the U.K., where it has one assembly facility. The scope of the job reductions there will likely be finalized as early as this month. Toyota is considering pay cuts as well.

Nissan joins club of lost profits: Nissan joins other Japanese car makers such as Toyotay and will most likely ost a group operating loss of more than 100 billion yen for the year ending March 31, its first dip into the red since fiscal 1994, the Nikkei (sub) says. Depending on car sales for the January-March quarter, the loss could even swell to around 200 billion yen. The automaker logged an operating profit of 790.8 billion yen for the year ended March 2008. Sinc January, “the situation has grown more dire each day,” a company official says. Depressed demand alone will eat into operating profit by more than 200 billion yen. In addition, the yen’s appreciation against the dollar, the euro and emerging-market currencies is seen dragging down the result by some 100 billion yen.
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Former Toyota President and current Chrysler Co-Prez Jim Press has been out and about, playing pimp my press. In so doing, he’s revealed his employer’s strategy for scarfing another $3b in bailout bucks from its current (not to say only) financial backer (that’s you). The ailing American automaker must present its case to Congress on or around March 31. And here, via Ward’s Dealer Business, it is…

“Press says there are four points to the auto maker’s turnaround:

* Chrysler has invested in new product – the auto maker has eight new vehicles coming out in the next year and a half and 24 in the next 48 months.
* The company will continue to support its dealers “with record levels of incentives.”
* Credit is improving with the auto maker’s finance company.
* Fiat has some of the best platforms in Europe in terms of cost and performance.”

Now how much would you pay? Well don’t answer! Mr. Press is happy to share some of the philosophy underpinning his Congressional term paper.

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“I found real gasoline again. So my days of 33 to 37 mpg in the Prius during winter SHOULD be over soon, and hopefully I’ll see my typical winter time 44 mpg overall average return soon.  On the current tank of E10, as the trip meter passed the 120 mile mark, the fuel gage went to 4 bars used up (4 gallons roughly). When you’ve seen the car doing 58 mpg, you KNOW damned well that it’s more than a little frustrating to see this. Computer claims about 37 mpg, but with E10 that seems to be off when it used to match the measured MPG pretty closely ON AVERAGE over say 10 tankfuls (which evens out the topping-up variations).    

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2008 was supposed to be a banner year for Hyundai. The company predicted a huge sales jump and promised a new flagship. And then 2008 actually happened. Sales were, well, you can guess that one. From a sales and PR point-of-view, the new, V8-powered Genesis was well received. From a sales perspective, not to much. Still, as one Hyundai Marketing VP put it, “if [consumers] aren’t forced to reconsider us, they won’t.” To paraphrase Elvis, perhaps we ought to give Hyundai a little more time. Meanwhile, the comparison between Hyundai and a young Toyota seem to have faded from view. In fact, you could make the case that Hyundai is more GM than Toyota. Well, if not you, me.

Perhaps one of the biggest similarities between GM and Hyundai: a disfunctional relationship with its organized labor. Actually, the comparison leaves the GM-UAW relationship looking downright touchy-feely. In 2006 alone, Hyundai lost 118,293 vehicles worth $1.75b due to strikes and walkouts alone. When it refused to pay year-end bonuses of 1.5 times the monthly pay (even though the production goal wasn’t met… due to strikes and walkouts) workers (wait for it) walked out.

Hyundai caved a few days later, with bosses calling the bonus as a “fresh deal” and “an opportunity to clearly recognize that appropriate remuneration can only come after workers achieve the goals.” But Hyundai management is well-trained by now. Their notoriously militant union has held a strike every year since 1987. Except for 1994. Maybe NAFTA scared them for a year. In any case, if the brand that was launched by Rodney King wants to join the Toyotas of the world, something will have to be done about its labor relations.

But Hyundai management doesn’t have much moral high ground from which to fight. The antics of President Chung Mong-koo would make Blagojevich blush. Mong-koo was convicted on $100m embezzlement and bribery charges–and then freed on the grounds that he could “contribute to the company and the national economy one last time.” Although his son Chung Eui-sun has left the top spot at Kia, he’s still considered the dynastic heir apparent to his headline-grabbing father.

Kia was supposed to provide an opportunity for Eui-sun to prove himself. That hasn’t panned out. High steel prices in Asia and union turbulence have played merry hell with Kia’s thin profit margins. “Kia’s profitability this year and its longer-term competitiveness depend largely on labor flexibility,” says Stephen Ahn of Woori Investments. His theory: it will be better for Eui-sun to keep his hands clean. With another Hyundai strike looming and some serious coming to terms with economic reality ahead, he may be right.

So Eui-sun will stay on as head of Kia’s overseas operations, busying himself with successful Slovakia operations and a giant factory under construction near West Point, Georgia. While basking in the glow of Kia’s new products, from the current Euro Cee’ds to their forthcoming cousins, the Soul, Forte/Spectra and YN. But even on the product front, more symptoms of “Big  Company Syndrome” loom for the Hyundai conglomerate.

If the Genesis got people thinking differently about Hyundai, a super-Genesis will bring in the few remaining skeptics, right? That seems to be the thinking behind the Equus, the troublingly named, packed-with-technology, S-Class fighter. The car will clock-in with a reported price tag north of $95k. Luckily for Koreans, recent rumors of a stateside debut for the Equus means grey-market imports a la Genesis can begin.  

Even at a lower price, the Equus reeks of “Big Company Syndrome.” Whereas the Genesis adds least some enthusiast rear wheel-drive panache to the Hyundai brand, the Equus is a staid limousine. Its owner (Chung Mong-koo?) will likely never stray from the back seat, as he or she is shuttled from payoff to “political fundraiser.” More importantly, a $96k car in the midst of an economic downturn doesn’t say anything positive about the Hyundai brand that the Genesis doesn’t. A budget S-Class is one thing, a Hyundai Maybach is another. And that’s before you start on the name.

In reality, Hyundai is letting Kia take over as the purveyors of cheap and cheerful. And as the “junior brand” picks up its game with the Forte and Soul, Hyundai is chasing the American brands with SUVs, Crossovers and RWD offerings. Product overlap between the two brands, a coming labor confrontation and untimely upmarket ambitions by Hyundai may be enough to take some shine off the Hyundai-Kia juggernaut. Moody’s is eyeing a credit rating cut for Hyundai-Kia, as a weak Won kept things from getting too nasty in 2008. This year will be tougher still.

Last year, Toyota finished the year with an unsatisfying quasi-tie for the title “world’s largest automaker.” The NY Times reports that ToMoCo has won 2008’s volume battle by a 620k unit margin. According to US News and World Report’s Flow Chart Blog, this is no bad thing. Blogger RIck Newman argues that even the most well-insulated GM executive can no longer deny that things have been going horribly, terribly wrong. The company can move on dot org. It can accept the fact that it’s an underdog that must fight for consumer consideration. It can lose the size queen sheen, and operate as if profits are the real measure of success. (A point GM CEO Rick Wagoner made last year when his minions cooked the books to retain the world’s largest automaker title, before the company ran out of cash.) Most importantly of all, Newman argues, Rick Wagoner can finally tell the truth about cars.

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