Struth! It's a pretty bizarre state of affairs for automakers down under. Despite Toyota's status as Australia's largest vehicle importer (138,640 vehicles year-to-date), the automaker's calling for the Australian government NOT to lower import tariffs below 10 percent. Speaking to the Sydney Morning Herald at the Tokyo motor show, Toyota's executive vice-president of global product planning warned that lowering the Ozzie tariff risked crushing the country's exports. Here's the deal. Toyota builds Camrys in Melbourne. If it can't sell enough Camrys locally, then it makes it harder to justify keeping the plant open to export the vehicle to countries in the region. Tokuichi Uranishi reminded the Herald that Melbourne competes for biz with the six other Camry factories worldwide. And a strong Australian dollar isn't helping matters– at all. But the country's Automotive Competitiveness and Investment Scheme (ACIS) is; the feds have pledged import tariff rebates on cars and components worth AUS $7b between 2000 and 2015. So where does all this leave Ford, Holden and Mitsubishi's home-grown products? Splitting less than 20 percent of Oz' domestic market, down from 50 percent ten years ago. 

Detroit News columnist John McCormic joins the chorus of Detroit cheerleaders who echo GM Car Czar Bob Lutz' infamous rallying cry against the transplants' hugely popular products: "soulless appliances!" McCormick's rant was inspired by a Sin City tete-a-tete with ex-Toyota appliance maker and current Chrysler co-Veep Jim Press. After telegraphing the new Chrysler's new party line– damn! we're fast!– the auto scribe portrays Press as an exec on the horns of a dilemma. "Some customers really love the passion and emotion of cars," Press told Big Mac. "When you drive the Viper or the new Challenger, the hair on the back of your neck stands up." And then, a confession. "There are many customers who want to drive appliances and we've got to get better at giving them appliances." The answer? Give 'em both! And there you have it: a "new paradigm" for a resurgent Motown. "Press is not alone in recognizing this viewpoint. General Motors has been laboring hard over the last few years to create a new overall formula for dependable and engaging vehicles and the results are showing in the U.S. market. So too has Ford, although with more success on the dependable side of the equation than the appealing element." Hey, who can argue with that?

OK, here's the rule for car buyers looking to claim a federal tax credit for their hybrid: "Original owners may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter." So the Internal Revenue Service (IRS) had a butcher's (look) at GM and Ford hybrid sales for the quarter ending Sept. 30 and decided neither automaker's sold enough gas – electric vehicles to start the winding down process. Ford's getting there; The Blue Oval Boyz sold 38,743 hybrids last quarter. GM's not even close, at 9,577 hybrids. For a full list of the qualifying vehicles and the tax credits for each, click HERE. Oh, and in case you're wondering, Toyota blew by the 60k hybrid tax barrier on June 30, 2006. In the second quarter of '07 alone, Toyota sold sold 79,723 hybrids (54,821 Prii). 

Many of our commentators have pointed-out that automakers hoping to compete against the lean, mean, hybrid-building machine known as Toyota are chasing a moving target. While GM is busy trying to stuff Li-Ion-shaped eggs into a Volt-sized basket, Toyota has just announced they've downsized their nickel metal hydride battery-based gas – electric propulsion system by 50 percent. What's more (or less), they've also reduced their manufacturing cost by 50 percent. Speaking to Reuters at the Tokyo Motor Show, Executive Vice President Kazuo Okamoto (the guy in charge of Toyota's research and development) said the advancement was only to be expected. "When we went from the first-generation Prius to the second-generation, we did the same thing." Okamoto also revealed that ToMoCo's looking to increase the visibility of their Synergy driven vehicles, "perhaps through a unique front grill." As for the diesel-powered alternative to his employer's hybrids, Okamoto admitted that oil burners were more fuel-efficient for long-distance cruising. But he promised that Toyota's future hybrids would meet or beat the challenge. The competition better hope Okamoto's blowing smoke, and act as if he isn't.

Now that Detroit (plus Toyota) has decided that some hike in the federal Corporate Average Fuel Economy standards is better than a BIG hike, Detroit's heavy hitters have hit the nation's capitol seeking support for their position. WSBT reports that Ford Boss Alan Mulally met with [union-supported] House Speaker Nancy Pelosi and her cohorts. Big Al pronounced that Ford is "absolutely committed to providing our customers with vehicles they really want and value. That is why improving the fuel economy of our vehicles and securing energy independence is important and that is why we fully support increases in CAFE." The Associated Press reports that GM CEO Rick Wagoner schmoozed with officials at the White House National Economic Council, the National Highway Traffic Safety Administration and the Environmental Protection Agency. Wagoner poo-poohed CAFE, asserting that the country would be better off developing alternative fuels and advanced batteries for plug-in hybrids and electric vehicles. “Our only hope is that the policies we pursue in the next 10, 20, 30 years, I hope that we end up with better results.” Meanwhile, some of the proposals “look like a stretch and look tough” and others “don’t look achievable.” Chrysler's Nardelli kept a low profile and ToMoCo was nowhere to be seen. But all three U.S. execs got a tongue lashing at a Democratic party luncheon. Sen. Byron Dorgan (D-N.D.) declared that Motown had resisted past CAFE increases and was now running advertising saying a Senate proposal would “take your pickup truck away.” “I think the issue is over — I think you’ve lost that issue. I think your position is yesterday forever." Maybe, maybe not.

The Chairman of the National Automobile Dealers Association (NADA) doesn't believe "overdealering" should take the rap for Detroit's woes. In an editorial posted on NADA.org and published without comment in Automotive News, Dale Wiley attempts to refute a Detroit Free Press article claiming that a glut of franchisees costs The Big 2.8 some $4b a year. [NB: The article in question has mysteriously disappeared from the newspaper's website.] Rather than address the big picture, Wiley (both by name and by nature) hones-in on the Freep's assertion that the Bigs pick-up the cost of sending vehicles to dealer parking lots. Nit picked and any discussion of actual dealer numbers ignored (GM has some 7100 U.S. dealers while Toyota somehow "makes do" with about 1600), Wiley poses the "real" question. "Will the Detroit 3 will drastically lose market share if they drastically reduce the number of their dealers?" Good question, even if it mistakes cause for effect. Shame the NADA boss doesn't answer it. But we do learn that "research at GM found that a dealership only needs to sell 10 new vehicles a year to pay for the cost of supporting that dealership." Huh? Anyway, here's Wiley's bottom line: "Anti-trust laws impose restrictions on trade associations advocating actions that would reduce competition, so it is inappropriate for NADA to take sides in the debate over dealer numbers." Wink, wink.

Bill Reinhert is Toyota USA's national manager-advanced technology group. He wants you to know that Toyota's decision to offer an E85-compatible (a.k.a. flex fuel) Tundra pickup has nothing to do "greenwashing." “It’s a longer-term strategy," Reinhert told WardsAuto. "What we’re not going to do, in the short-term, is say: ‘Look at us! Aren’t we green?’” Bob Carter, ToMoCo NA's group vice president and general manager, seconds the motion. He claims Toyota's decision to develop the flex-fuel full-sizer was designed to help the company capture more sales in the American heartland; where corn is grown, ethanol subsidies flourish and E85 stations abound ('cause they don't have to schlep the pipeline aversive juice cross country). Be that as it may, the Midwest is certainly a key battleground for the new Tundra. "The Midwest is where we’re seeing our strongest sales growth percentage-wise, not volume-wise.” Oh, and the fact that inexpensively converted E85 Tundras will boost Toyota's CAFE (Corporate Average Fuel Economy) ratings may have a little something to do with it too. 

After Chrysler's executive [I have a] dream team addressed the issue of Canadian pricing in Sin City, they may soon wish that what they said in Vegas stayed in Vegas. Speaking to WardsAuto, Ex-Toyota Prez Jim Press said Chrysler had inflated their sticker prices north of the border to account for the historic 10 to 40 percent gap between the dollar and the loonie. And now that the currencies are at parity? “Currency is a long-term move," a pressed Press confessed. "It goes one place to another, and when cycles come up, you take (that) into account. What you have to do is price at where the market is, and that’s what we’ll continue to do.” As for Canadian customers who dare cross the border to buy a Chrysler product, the automaker admits it's trying to cut them off at the pass. Steve Landry, executive director-North American sales, told Wards that he's sent memos to U.S. dealers warning them against selling vehicles to Canada on the gray market  Needless to say, Landry claims it's for the customer's own good, considering Canadian auto regs. “It’s not just homologation of an odometer. You have to also change the daytime running lights, which is a pain… Our dealers are more into selling vehicles where they can take care of the entire lifecycle of that customer in that vehicle." Convinced?

Toyota's not the only one questioning GM's logic in pushing for plug-in hybrid technology. Honda's CEO Takeo Fukui told the Wall Street Journal that plug-ins don't have enough environmental benefits to interest his company. In fact, GM's Hail Mary Chevy Volt makes little sense. In a news conference, Fukui characterized plug-in hybrids as "a battery electric vehicle equipped with an unnecessary fuel engine and fuel tank." He added that Honda could easily develop a plug-in hybrid but won't because "I don't think that would contribute to the global environment, to reduce [global warming gas] emissions." Yes but– Fukui hinted that Honda is developing a battery electric vehicle. "Assuming that we can come up with a really high-performing battery that we are working on currently, I think a battery electric vehicle [that uses such battery technology] would actually be a plus from an environmental point of view." Given Honda's engineering track record, GM and Toyota both better watch their backs.

"Oh, the poor unions!" says Max Fraser, a "2006 Intern" now scribing full time at The Nation. The budding curmudgeon supposes that The Big 2.8 will be the death of the unions (not the more likely murder-suicide). That's because Detroit's robber barons just keep squeezing those wages and benefits. Unfortunately, his explanation of how this is happening, and why we all should be worried is… well, let's just say Mr. Fraser has penned the Chrysler Sebring of rants. In a sweeping example of internally-inconsistent analysis, Fraser manages to blame Toyota and Honda for paying their workers more than UAW guys make– and then urges the UAW, for the good of the workers, to get into Toyota and Honda's factories as soon as possible. Fraser also manages to insult and put down outsourcing, insourcing, rural areas, and the "Third Worldization of the American South." Gee, with all those corporate headquarters in the South (Coca Cola, Nissan, Wal-Mart, Saks Department Stores, Home Depot, UPS, Bank of America, Lowe's, Wachovia, Sprint-Nextel, just to name a few), a $3b biotech industry in North Carolina's world-class research triangle, and the busiest airport in the world, the "Third World American South" sounds like a pretty productive place to me.

Even as Chrysler talks of cutting models, closing dealerships and ramming through a new contract with the United Auto Workers, their dealers claim they're hopeful about their future. This according to USA Today, whose reporter attended a no-holds-barred meeting in Las Vegas earlier this month between 75 percent of Chrysler's dealers and the automaker's top brass. Specifically, Chrysler CEO Robert Nardelli and Toyota renegades VP Jim Press and Marketing Maven Deborah Wahl Meyer (Tom LaSorda must have been busy with union negotiations) held an open mic Q&A session with the front line troops. Dealers says they came away feeling that, for the first time in years, someone at headquarters is listening to them. Chrysler's dealer council member John Schenden was ecstatic. "As a dealer body, we are more optimistic than we've been in the last 20 years." Reflecting his newfound confidence, Schenden recently bought land to expand his dealership. I guess he hasn't seen TTAC's TWAT nominations yet.

Bloomberg reports that GM outsold Toyota for the first nine months of this year, to remain the world's largest automaker. GM's strong showing overseas gave them a total of 7.06m sales, compared to Toyota's 7.05m. Both companies are seeking to ameliorate a slump in their home patch by expanding into emerging economies. GM's fastest growing markets in the third quarter: Latin America, Africa and the Middle East. The General showed double digit sales increases in these territories, along with solid gains in the Asian-Pacific region. Meanwhile, GM's North American sales sank 6.6 percent for the year. While ToMoCo's NA sales are increasing, the Japanese automaker's growth stateside has slowed over the past three months. Toyota expects to overtake GM for worldwide production this year, as GM cuts production of trucks and SUVs. In sum, GM projects total worldwide production will hit 9.285m vehicles in 2007. Toyota predicts they'll produce 9.34m units.

"'People who took interest in electric vehicles are showing interest in plug-in' vehicles, Mr. Asakura said, through a translator. 'But my wife does not accept charging [the vehicle] every day.'" Speaking to The Wall Street Journal in Tokyo, Toyota's hybrid vehicle system-engineering division's project manager poured a torrent of cold water on GM's belief that their plug-in hybrid Hail Mary Volt will be practical, affordable, desirable, reliable or doable. Other than that… Toyota says its exploring plug-in possibilities using its existing nickel-metal hydride battery-powered Prius. An undisclosed number of Prii are headed for two undisclosed California universities for testing. Oh, and Toyota will also look at lithium-ion technology for their Synergy Drive system, in accordance with an undisclosed timetable. In any event (or lack thereof), Toyota's NOT down with GM's plan to build a car that motors around on battery power alone, then switches to internal combustion. If Toyota develops plug-in hybrids, they plan on powering the car on electricity for short bursts, alternating with power from the gasoline engine. 

Kids love to play connect the dots. When the dots are numbered sequentially (with a few outlining details thrown in to keep 'em focused), it's easy to do. When the numbers are missing, it's hard to see anything more than random points on a page. And so it is with Chrysler, an American automaker that's generated enough bloggable news during the last six months to keep Google News-alerted surfers away from their designated job for hours at a time. Even though only Chrysler's new owners know their real game plan, there's been enough new "dots" to form a recognizable pattern. What it reveals is a company on the cusp of a major revolution.

The first dot: DaimlerChrysler dumping selling Chrysler. Several companies showed interest in buying Chrysler early on, but most industry analysts expected Canada's Magna Corporation to be a shoo-in. Magna had the balls; Chairman and founder Frank Stronach is the personification of unbridled ambition. Magna had Chrysler-specific auto building experience; they held the contract to assemble Chryslers and Jeeps in Europe and run the paint shop at the Jeep Wrangler plant in Toledo, Ohio. And Magna had the money.

But before the Chrysler deal went down, the automaker announced it was moving production of Euro-spec Chryslers from the Magna-Steyr plant in Austria to Chrysler's plant in Brampton, Ontario. Magna wasn't happy. The Canadian Autoworkers Union (CAW) loved it. Dot two.

Third dot: the private equity firm Cerberus came from nowhere to grab the golden ring. It was the union's turn to be displeased. United Auto Workers (UAW) president Ron Gettelfinger and CAW president Buzz Hargrove both suspected that Cerberus was about to "strip and flip" their meal ticket. They saw storm clouds gathering over Auburn Hills.

And yet, after just one meeting with the three-headed dog's masters, both union leaders did a complete 180. Gettelfinger said the sale of Chrysler to the private equity fund was in the "best interests of our members." Hargrove, who had said he was "pissed off" over the sale, suddenly decided "Chrysler is better off under Cerberus ownership than they would be under Daimler." Dot four.

Fifth dot: after taking over Chrysler, Cerberus revamped the company's upper management. Union-friendly CEO Tom Lasorda suddenly found himself shuffled aside to a vice president's position. Former Home Depot CEO Robert Nardelli took over as Chrysler CEO. Toyota's Jim Press moved in as co-vice president, to run sales and marketing. Both came from companies known for their decidedly anti-union stance, yet the UAW and CAW were both uncharacteristically quiet about their selection. 

Then came dot six: negotiating a new UAW contract. In return for ponying-up a bunch of billions for a health care VEBA superfund, the UAW's leadership agreed on a contract radically different from the GM deal. The Chrysler agreement doesn't include job guarantees or commitments not to close or sell plants. If the UAW's members ratify this agreement, it leaves Cerberus free and clear to shut down whatever plants they choose, whenever they choose. OR… sell those plants to someone else.

Last month, Magna surprised everyone. The fiercely anti-union company suddenly opened its plants to the CAW, inviting them to organize their employees. Owner Frank Stronach said the company "would embrace the union" under the "framework of fairness."  He claimed an epiphany: Magna and unions need to work together to save North American auto industry jobs and create new employment. Dot seven.

Dot eight: Chrysler has announced it's [finally] ready to trim models across all three brands. The executions could mean a Chrysler plant now building several variations of one model for three divisions would build one model for one division. Although the divisions might share some components (e.g. engines or transmissions), the new regime will tie a specific production facility to a specific brand.

Connect the dots. As we predicted when Cerberus assumed control of Chrysler, the money men are getting ready to sell part or all of Chrysler to Magna, or, at the least, outsource production to them. This they can do because Chrysler’s unions have been well and truly appeased, paid off in billions and granted access to Magna’s expanding worldwide empire. This they will do because they’re a private equity firm that has always preferred right-now cash cows to long-term plays. 

Magna is also on board because, well, it’s what Frank wanted then, it’s what Frank wants now and Frank’s got the cash to do the deal. Ah, but is this a picture of resurgent automaker? Nope. It’s an abstract image; one that allows both artist and onlookers to see what they want to see. One thing’s for sure: it's still very much a work in progress.

The boys over at ToMoCo NA are not insensitive to the fact that their critics have seized on Consumer Reports' recent reliability downgrade as [alleged] evidence that they've lost their mechanical mojo. So Toyota's released a statement on the PR debacle that assures quality-minded pundits and punters that "we're taking measures every day to continue to sharpen quality and enhance customer satisfaction." Not exactly a major mea culpa, now is it? In fact, the missive is something of an FU to the company's critics, devoting the majority of its editorial space to reminding nay-sayers who's boss around here. "Toyota, Lexus and Scion models collectively led the industry with the greatest number of models, 17, ranked "Most Reliable" in this year's Consumer Reports Reliability Survey. With dozens of models from three dozen makes vying for a spot on the magazine's "Most Reliable" list, only 39 were chosen. Toyota, Lexus and Scion models accounted for 44 percent of the list. Toyota, Lexus and Scion earned three of the top six places among most reliable makes. Collectively they ranked third place in reliability among all automakers." Clearly, Toyota Motor Sales Executive Vice President is a 3/4 full kinda guy. "Over all, this survey reflects well on our products," Jim Lentz pronounced. Oh, the humility!