I have no idea why Autoblog transcontinental trekker Sam Abuelsamid has suddenly and finally “woken up” to the fact that the U.S. new car market– indeed the entire U.S. economy– is in a deepy parlous state. But some prince has kissed our sleeping beauty. And now Sam is beginning to realize what we’ve been saying before he turned a wheel [slowly] in anger on behalf of Audi’s poorly-timed diesel-powered High Mileage Marathon: the whole project is a futile gesture. “The TDI technology used by Audi is available now with more coming to the U.S. market in the coming months. The question is will anyone be able to buy it or any of the future powertrains? Very few people buy new cars with cash. The industry relies on being able extend credit to drivers. The key element of what is happening this week is that financial institutions have become unwilling to loan money to anyone. After loaning way too much over the last decade to people who couldn’t afford to pay it back, there is now nothing going out. That creates a great deal of uncertainty in product planning. Audi made the decision to launch their new diesels in the Q7 long before this ever started and it’s unclear what their future path will be. The A4, Q5 and A3 have all been talked about as potential future U.S. diesel products, but without knowing where auto sales in general are going it’s hard to choose a direction. With Toyota already having canceled its planned diesel for the Tundra and rumors of other product cancellations on the horizon, the only thing we know for sure is that we know nothing.” Point taken.

While global stock markets are in full retreat, Volkswagen shares have soared to a 20-year high. Marketwatch has plenty of theories to explain the recent 60 percent surge: short covering, inclusion in market indices and the relatively small number of VW’s shares which trade on the open market. Even the collapse of Lehman Brothers gets an honorable mention. Whatever the reasons, “with a market capitalization of 95 billion euros, or $129b, VW is now worth more than Toyota.” Surely the big rise in VW shares has nothing to do with the company’s ongoing inability to get anything right in the U.S .market. VW’s US sales were down 9.4 percent in September and would have been even worse were it not for the introduction of the Jetta SportWagon and the Tiguan. The best explanation for the recent VW share price run-up: the tug of war between Porsche, the state of Lower Saxony and various factions within VW’s management and a related squeeze on short sellers who had bet that VW would crater along with the rest of the automotive stocks. Barron’s summed-up the situation up nicely today with this note: “Holding VW shares can be likened to musical chairs. Each time the music stops, some of the shorts cover and drop out. At some point, relatively soon, the shorts will be out effectively of the stock, and VW shares will start trading on fundamentals again. When that happens, the game will be over, and holders of VW shares will be left standing with shares that will plummet to where fundamentals dictate.” So, if you are a betting person, short some VW stock and wait for it to unfold. Me, I’ll be watching from the sidelines.

As the U.S. economy craters, the price of gas is about to fall below $3 a gallon. Most experts believe that lower fuel costs will not lead American consumers into gas-guzzling SUVs anytime soon. If at all. Given the sudden arrival and frentic pace of the last gas price spike, even an extended period of low, stable fuel prices wouldn’t convince American consumer to “trust” lower pump prices. In other words, an entire generation of drivers may have suffered “pump trauma.” And until somebody buys the damn things, and lots of ’em, SUV and pickup truck residual values will remain low enough to make an ant’s ankles look like Godzilla’s eyeballs (or something like that). But hey, that’s the 411 from “experts,” not TTAC’s Best and Brightest. So I turn to you for a more thoughtful analysis. Will Americans “forgive” their gas guzzlers and “forget” their pain at the pump, plumping for ye olde guzzlers when the economic crisis passes? If so, how long would it take? What effect would cheap gas have on eco-oriented whips like the Chevy Volt and Toyota Prius?

Motor Trend has a hot hand right now with the investigative journalism. After stunning the world by announcing that the new Corvette wouldn’t be mid-engined (gasp!) the MT boyz have more hot, fresh news to blow your mind. Specifically, that they hear rumors that the Toyota iQ could be sold stateside as a Scion. What, you mean the iQ city car won’t be sold next to the cheaper, larger, faster Yaris on Toyota’s showroom floor? We’re shocked, shocked we say. The US iQ will be revealed at the LA Auto Show in November, at which point we will know if it’s to be a Scion or a ‘yota. Not that there’s half as much drama as MT lets on. In addition to the difficulties in positioning the iQ vis-a-vis the Yaris, there’s also the concern that it could steal some thunder from the new Prius, set to be unveiled early next year in Detroit. Yes, it would be priced similarly to the xD, but the size an door-count differences make cannibalism less of an issue than if the iQ were branded as a Toyota. Besides, Scion desperately needs a sales boost right about now. Then again, the iQ could also fit well with a rumored dedicated Prius brand… except that it will be expensive and efficient enough without a hybrid powertrain. And so Toyota begins to reap the bitter harvest of multiple brands, an early symptom of what ToMoCo Prez Watanabe calls “Big Company Syndrome.”

Sometimes, when we podcast, we just have too much fun. Jonny and I were yammering about the Nissan GT-R, Porsche’s PDK transmission, and of course Toyota’s ass-kicking Hilux and Audi’s bizarre plans for the R8 (which I still don’t totally grasp). The result? We ran way over time. Twelve minutes, forty-one seconds. That’s not okay. The mission is ten minute podcasts with perhaps a minute for a grace period. We’ll be sticking to time from now on. As for the video, never underestimate the stupidity of Russian oligarchs and their even stupider children.

WARNING: Podcast contains some profanity, including an f-bomb.

After hearing all the stories, legends, and Top Gear specials on the fabled Toyota Hilux, I couldn’t wait to get my hands on one. While I was in Afghanistan, I heard that a Hilux dragged itself and four American soldiers over forty miles to safety while only able to drive its front wheels when its rear drive shaft was blown off. Another ran for over 100 miles with no oil and a leaking head gasket after being shot by an AK-47 in the mountainous highlands. Talk about a letdown. Driving the Hilux sucks.

Perhaps Toyota Sales Chief Jim Lentz would like to type the words “credit crisis cars” into his Google bar. Because Jimbo doesn’t think that credit’s the main problem with a U.S. new car market that’s pretty much stopped dead in its tracks. “The vast majority of our customers are able to get approved for loans,” Jim Lentz told The Detroit News after cutting the ribbon on the ToMoCo’s new research-and-development center in Michigan. “In our case, credit is not the biggest challenge. Our biggest challenge is consumer confidence.” Ah, in our case. You know, for the automaker who could STILL buy BOTH Ford AND GM with their projected 2008 profits. That said, Lentz isn’t the only one who says you want a loan? We got loans! “‘There’s no issue at all with above-average credit,’ said Alan Helfman, owner of River Oaks Chrysler Jeep in Houston, adding that he is also still doing deals for customers with bad credit, albeit fewer than he was a year ago. ‘Hurricane Ike was a bigger problem for us than the credit crisis.'” You ain’t seen nothin’ yet Al. Or, if you have, you better get used to it. Just sayin’

I was walking the dog the other day when I heard a V8 bellow. I turned around to see a perfect example of a latter day muscle car: a Chevy Silverado pickup truck. I was surprised by my surprise. Although the Northeast represents Middle America’s automotive tastes about as well as Harvard professors reflect conservative political values, I wondered if society has reached the point where the sound of unabashed engine power has become, well, boorish. Has the average American automobile, once a symbol of status, virility and pride, been castrated? And is that a bad thing?

Focus on the word “average.” Yes, hundreds of thousands of enthusiasts continue to bask in the aesthetic, accelerative and aural afterglow of octo-cylindered SRT8, SS, GT, M and AMG-branded products. Widen the remit to include the tuned-four cylinder machines favored by the ricer set, and it’s clear that American car culture is alive and well and living in a comments section near you. But these vehicles cater to a relatively small subset of American consumers.

By the same token, you have to discount the eco-whips favored by equally passionate “green” car enthusiasts. In a recent study re: popular attitudes towards mass transit, four percent of respondents said they’d consider switching to mass transit on environmental grounds. While the survey methodology wasn’t entirely reliable, it supports a common sense conclusion: auto-oriented environmentalists proselytize from outside of the American mainstream. The media may swoon over hybrids, PHEVs, hydrogen fuel-cells and the like, but the average American aspires to a plain Jane Toyota Camry.

Or not. Post-September sales results, the general decline in vehicle sales (their lowest level in 15 years) and Detroit’s disastrous truck sales slump (down by 20-plus percent across the board) received the ink it deserved. Meanwhile, according to the American International Automobile Association, the Chevrolet Silverado and Ford F-Series scooped the top two sales slots.

Startling discounts may account for the fact that two American-made pickups edged-out the Toyota Camry in last month’s new car showroom hit parade. And there’s no question that the U.S. automobile market is undergoing an epic, convulsive shift, as hundreds of thousands of Americans abandon their SUVs (if and when they can) for more fuel efficient vehicles. But you have to wonder if falling gas prices and, more importantly, long-standing consumer tastes, mean that the death of the Great American Land Yacht has been greatly exaggerated.

Consider the much-lamented– if only by enthusiasts– “bloat” of the average American automobile. And by that I mean, of course, the Honda Accord and Toyota Camry.

In their early iterations, these Japanese cars were relatively diminutive compared to their American counterparts. Consumers chose the transplants for longevity and frugality and put-up with relatively tight packaging (especially when compared to their aging American counterparts and gas-guzzling SUVs). Today, numbers three and five on September’s sales chart are significantly larger than their predecessors. And they’re bisected by the Impala, an older Chevy that outsells its smaller and more modern “replacement.”

High gas prices or no, the automotive up-sizing trend continues. Even the new Mazda6 has traded zoom-zoom for elbow room. But something has been lost. (Don’t say handling, ‘cause that’s just you, a pistonhead, talking.) Thanks to mechanical and ergonomic improvements, the idea that a small-engined car is, ipso facto, a penalty box has left the building. While there’s some V6 up-selling down at the dealership, the vast majority of these popular cars are four-cylinder automobiles. More importantly, there’s no apology needed.

Mpg bragging rights have replaced engine envy. In a few short years, “That thing have a Hemi?” has gone from a come-on to a turn-off. At the risk of contradicting myself, the Toyota Prius has almost single-handedly made it “cool” to save gas. You can no more imagine the average American car buyer showing off his new car/truck by revving the engine than you can image a Dodge Challenger SRT8 driver whipping out his gas receipts.

This transition in the American automotive psyche– from a passionate lust for sheer horsepower to a profound admiration for fuel efficiency– is far from complete. But when a “car guy” like GM Car Czar Bob Lutz, the man who helped unleash the Dodge Viper and the Pontiac Solstice, spends his days touting the plug-in electric – gas hybrid Chevy Volt, you know which way the wind’s blowing.

In short, the bellowing, brash automobile, the car as a symbol of virility (a.k.a. penis substitute) is destined to become an increasingly obscure concept, even within the mucho macho pickup truck fraternity. BUT– automobiles are still, and will always be, a status symbol. And Americans will always love their faithful steeds, for one reason or another. Whether or not this petro-chemical reliant relationship (for now) is a good thing or not is irrelevant. It just is.

Marketwatch reports that Honda and Toyota are warning against using their hybrid vehicles as taxi cabs, on safety concerns. Ford, GM and Nissan have also refused to certify the crashworthiness of their hybrid vehicles as hire cars. The story starts with an August 29 letter, sent from the New York Taxi and Limousine Commission (TLC), asking automakers to certify that their hybrids or alternative fuel vehicles are manufacturer-approved to be used as taxicabs and safe when modified with partitions and other TLC requirements. This letter in turn came from a Metropolitan Taxicab Board of Trade (MTBT) legal challenge to TLC’s mandate that all new NY taxis be hybrids or other vehicles that achieve 25 miles-per-gallon. Citing a 2008 engineer’s report that finds hybrids to be unsafe and unfit as New York City taxicabs, the MTBT have held up TLC’s mandate in court, and now that automakers won’t certify their safety, the TLC mandate may be DOA. Issues over safety partitions and their interaction with side-curtain airbags and other safety equipment prevent automakers from certifying the safety of their hybrids when modified for taxi use. Since nobody crash-tests hybrids modified with safety partitions, nobody will take any legal responsibility for them, and thus they may well die on the vine. Meanwhile, in less hellishly violent corners of this great nation, cabbies are turning to hybrids with enthusiasm. As long as you don’t need several inches of bulletproof glass between you and your customers, hybrids are a safe, efficient choice for taxis.

Not the best metaphor for a writer (or reader) who’s feeling a bit thick-headed this AM (although I have to say, Jay, that Coppola’s Director’s Cut chardonnay is wicked pissa). Anyway… first we had Honda’s robot playing violin for the Grosse Pointe gadflies at the symphony hall. Now Toyota is expanding– as in opening not closing– a new facility in York Township. Toyota’s press release re: their new Toyota Technical Center (TTC) is full of gloating, snickering and sneering. Not. But it does feature some of the same characters we last saw sticking their noses in the federal taxpayers’ trough, rooting for bailout billions on behalf of ToMoCo’s competitors. Yes, Shigeki Terashi, TTC president, “celebrated the grand opening of its new engineering and safety testing facilities here today with Michigan Governor Jennifer Granholm and U.S. Congressman John Dingell, as well as several hundred government officials, community leaders, suppliers and Toyota team members.” Those team members will now be “engaged in engineering design, prototype building, vehicle evaluation and engineering, materials engineering, powertrain tuning and design, regulatory affairs and advanced technical research. TTC has developed the Avalon, Sienna, Solara, Tundra and Venza vehicles for the North American market.” Now what?

Automotive News [sub] reports Toyota’s profits are set to slide 40 percent when the firm announces its annual numbers. At issue: exposure to weak American sales and a slowdown in China. And though reaping just over half its expected profits sounds like bad news, ToMoCo will still pull down $12.8b this year. Needless to say, that’s a mighty impressive accomplishment for a firm that’s so dependent on flagging US sales. Koichi Ogawa, chief portfolio manager at Daiwa Asset Management, says Toyota is still on solid ground. “Given that the price of fuel and some raw materials is falling, earnings in the auto sector are likely to start to recover in six months to a year. This could be a good buying opportunity for long-term investors.” A quick look at Toyota stock shows it’s fallen steadily from its longtime high of $137/share in February of 2007. It’s still dropping, currently trading at about $65. Still… with a rock-solid 6.5 price-to-earnings ratio, and a portfolio that includes massive investments in hybrid and electric technology, Toyota is no GM or Ford. No siree.

Detroit’s movers and shakers have a chip on their shoulder larger than the Rock of Gibraltar. They feel besieged, besmirched and belittled by the feds and liberal elites. Of course, that was BEFORE the Beltway Boys lavished bailout bucks on Motown’s moaners to retool their factories to build better cars than their competitors. Detroit’s playing kissy-face with their former antagonists now, right? Wong. “Clearly, now that Washington is loaning Detroit auto makers $25 billion to begin repenting their evil ways, legislators will try to turn the fuel-economy screws tighter so they can limit the number of unhealthy vehicle choices General Motors, Ford and Chrysler are able to sell weak-willed consumers.” Well, duh! What part of CAFE doesn’t WardsAuto scribe Drew Winter not understand (other than, you know, the actual regulations)? The part where everyone does the same thing, apparently. “When I see pictures of them [Chevy Volt, Toyota Prius], I can’t tell them apart. It reminds me of Soviet-era central planning. Yes, all these cars further The State’s goals of reducing carbon emissions and consumption of foreign oil, but comrade, they look boring and not everyone can drive one… Forgive us for our decadent and unhealthy choices, oh wise members of the new Washington Automotive Politburo. Fast red convertibles and big utility vehicles are the opiate (or tobacco) of the people. But this still is America, where people should be allowed to buy what they want and auto makers should be allowed to make a few dollars off our human weakness. Pretend the profits are from something politicians like, such as casino gambling. This still is a capitalist society after all. At least, it still was at press time.” Wow.

You know how it is. You step out of the office for a transcontinetal journey to prove the worth of diesel propulsion to a skeptical– not to say distracted, disinterested and dismissive– nation and bang! The whole oil burner thing blows up in your face. Well, not literally. That would be WAY too exciting. No, I mean the major diesel story lies elsewhere. This time it’s Toyota, who’ve announced that they’re NOT going to build a diesel-powered Tundra. Automotive News [sub] reports that ToMoCo NA Prez Jim Lentz confirmed that the development of a diesel-engine variant of the Tundra has been deep-sixed. While a diesel option has “not been canceled outright,” it’s been cancelled forthwith. (See how that works?) AN says “That’s a big step back from Toyota telling dealers at the National Automobile Dealers Association convention last year that a diesel would arrive by 2010 or 2011.”

Easy answer for me: Porsche 914. Justin and I talked about this (kinda) on today’s Podcast. He still hates it. But not me. I really, really admire the diminutive sports car. That’s right, I said sports car. Before I explain why, let me explain why I used to be a hater. There’s an entire class of cars I dislike because they were driven by the biggest assholes at my high school. Specifically, ’55 Chevys, all Chevelles, Toyota 4-Runners and Porsche 914s. VW Bugs were a mixed bag. The most date rapingest quarterback had one (I played center — I have issues) but so did a close friend. So, we’ll call it a wash. Anyhow, jerks drove the 914 and I had always heard that in Europe they sold it as “just” a Volkswagen. But a dear friend of mine — Davey G Johnson — showed me the error of my ways. By using facts! And while it is true that both companies sold the car, the bulk of the development was handled by Porsche. Any guesses as to who specifically was in charge of the 914 project? If you guessed Ferdinand Piech, pat yourself on the back. You may recall that Piech is the man responsible for the Volkswagen Phaeton. But, he also willed the Bugatti Veyron into existence. More importantly he brought about the all-crushing, all-dominating Porsche 917. Seriously, they canceled Can-Am because nothing could compete with the 917. Not one race, but the whole series. So, the 914 has some pedigree. Lots of success on the track, too. Don’t believe me? How does a 6th overall finish at Le Mans grab you? And yes, I know I said 7th on the Podcast. Again, not 6th in its class, but 6th overall. Why, that’s amazing! Especially when you consider the cars it beat, which include a bevy of 911s and Corvettes, Alfa Romeo T33/3s, several Ferraris, several Porsche 908s and even a 917. Hell yes I now love the 914. You?

The National Automobile Dealership Association (NADA) predicts that some 700 of 21,461 U.S. car dealers are going tits up this year. And you know what? It’s still not enough carnage for domestic automakers, whose bloated dealer networks are a major millstone around their neck. (Ford, Chevrolet and Chrysler started the year with around 4k stores vs. Toyota’s 1220 dealers.) Soaring floorplan costs– the interest charged by banks to fund a dealer’s inventory– have Darwined what The Big 2.8 learned not to do when GM paid a heavy price for terminating Oldsmobile. Automotive News [sub] reports that GMAC Financial Services, Ford Credit and Chrysler Financial are the major culprits; they’ve all raised their interest rates by roughly half a percentage point in a market where inventory just kinda sits there. But here’s the real story: “Some lenders are refusing to floorplan unprofitable dealerships, to the point of recalling their loans… Bank of America supplied two of [LA chain owner Mike] Kahn’s dealerships with $60 million in floorplanning, capital loans and mortgages. Last winter, Kahn says, the bank did not want to renew the loans and raised his floorplan interest rate through the roof. ‘I never felt so betrayed… You sign this agreement and they raise your rate. Or you don’t sign and they put you out of business.'” And now, file this one under “be careful what you wish for: “Last week, key lawmakers said the Federal Reserve also has authority under ‘extraordinary circumstances’ to make special loans for dealers’ inventory costs.”