Developing and manufacturing new cars is expensive. You need a lot of volume to amortize the cost. That’s why more and more Japanese automakers skip the development and manufacturing part altogether. They outsource both and slap their badge on someone else’s car. Last in that development has been Mitsubishi. Ten days ago, Nissan and Mitsubishi snuggled closer and added more OEM deals to the ones they already had. Yesterday, it was announced that Suzuki would supply subcompact vans to Mitsubishi.

Suzuki will supply its latest 1.2 liter subcompact van Solio to Mitsubishi, which will start selling them as a yet unnamed Mitsubishi vehicle beginning in spring 2011. Just another OEM deal? Japan’s Yomiuri Shimbun sees a bigger picture. (Read More…)

Talk about a blast from the past: TTAC first took note of talks between Aston Martin and Daimler nearly three years ago, and the Maybach connection first shows up a few months later. But all this time later it doesn’t sound like a whole lot of progress has been made. The FT reports that the two sides are still

At a press conference announcing new cooperation between Nissan and Mitsubishi, Nissan’s Carlos Ghosn presented the tie-up as a far-sighted move that will help both sides prosper. The Renault/Nissan boss explained

In the global auto industry, cooperation on specific projects among automakers is becoming increasingly common. It is a signal of how our industry is evolving to sustain success over the long term

But if his words were saying “cooperation,” Ghosn’s body language said “I’m hungry and your company looks bite-sized.”

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Infiniti recently got into the in-house tuning game, by rolling out the Infiniti Performance Line as an answer to Lexus’s F line, Audi’s S line, BMW’s M line and Mercedes’ AMG-tuned hot rods. Nissan’s luxury brand may have been a bit late to the profit-puffing game of performance sub-branding, but better late than never, right? Maybe not. Now that Renault/Nissan and Daimler have hooked up to share engines and architectures, it seems that the alliance is considering making AMG power available to Nissan’s luxury brand. Citing “sources in Japan,” Autocar reports that

Infiniti’s hot models could carry ‘Powered by AMG’ badges as part of Nissan’s recent tie-up with the Daimler group…

One powerplant on the shortlist is Mercedes’ forthcoming turbocharged 3.5-litre V6. It would replace Nissan’s venerable 3.7-litre unit in Infiniti’s G range and could be tweaked to produce up to 400bhp.

Sources say the IPL version of the M, Infiniti’s 5-series rival, could end up using AMG’s 6.2-litre V8 — and be priced north of £60,000. That would allow the M IPL to undercut the E63 AMG but rival Jaguar’s XFR on price.

But will the exclusivity of Affalterbach-tuned Mercedes models be hurt by sharing engines with Infinitis? Would the damage be the same if Infinitis got the engines but not the badges? After all, the VQ V6 is hardly exclusive to the G Series, and a switch to a Mercedes engine could impact on everything from the Nissan Z to the Infiniti FX35… unless the Infiniti is willing to alter the IPL-spec G37 to be the only Mercedes-powered G. In short, the challenges of what Infinitis to offer with AMG engines are nearly as great as the challenges Mercedes will have to face by losing the exclusivity of its AMG engines. After all, it’s one thing to sell AMG engines to a supercar firm like Pagani, but an upstart Japanese luxury brand doesn’t offer the same brand-halo benefits. Should Daimler let this happen, or should the AMG badge and engines stay exclusive to tuned Mercedes models?

The Korean Development Bank, which owns 17 percent of GM’s GM-Daewoo Korean subsidiary, has been rolling about a billion dollars in Daewoo’s debt over on a monthly basis for most of this year. The debt, a legacy of a $2b+ loss on currency speculation. Now, The Korea Times reports that GM-Daewoo has paid back about a billion of that mature KDB debt, as GM-Daewoo boss Mike Arcamone explains

this action reflects GM Daewoo’s strong financial performance this year enabling us to make full payment on the outstanding facility … Full repayment of the credit facility will decrease the company’s future borrowing costs

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Both Toyota and the remains of its joint venture known as NUMMI have sued the remains of “Old GM” for breach of contract according to two separate reports in the Wall Street Journal [sub]. NUMMI is seeking $365m, claiming GM caused the collapse of the joint venture by unilaterally pulling out as it collapsed into bankruptcy,  sticking Toyota and NUMMI with the bill.

Those decisions breached … commitments to Nummi and sounded its death knell,” said the lawsuit, filed last week. And unlike Toyota, GM’s bankruptcy estate “has refused to contribute to Nummi’s deficit during the wind down”

Toyota, meanwhile, is suing for some $73m in development costs for the Pontiac Vibe, a vehicle that GM was supposed to sell for another two years.

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The following is a “Confidential” memo from the US embassy in Berlin, leaked in the latest Wikileaks dump, describing German reaction to GM’s flip-flop decision to not sell its German subsidiary, Opel. The memo reveals that Germany saw GM as a “unreliable partner” and that at least one German government official believed that “if the U.S. Government had GM under better control, this would not have happened.” The document also confirms that GM scuttled the deal largely over concerns about Russian access to its intellectual property, and that Opel may well have been happy to see the deal fall apart rather than face losing its entire BMW supply business. Though none of this information is completely new, the leaked document provides a fascinating insight into the muddled mess that was the Opel rescue.

BERLIN 00001395 001.2 OF 002

Classified By: ECONMIN Robert A. Pollard for reasons 1.4 (b,d).

1. (C) Summary: Just hours after Chancellor Merkel’s historic November 3 address to a joint session of Congress, General Motors (GM) canceled its sale of Opel to Canadian auto parts manufacturer Magna. The decision, which followed repeated assurances from GM that it was a done deal, came as a complete shock in Germany and dominated media coverage throughout the day. Merkel herself was reportedly highly upset over GM’s flip flop. Ulrich Wilhelm, the Chancellor’s spokesman on Opel said the German government “regretted” the decision, and reminded GM that it must now repay Berlin’s 1.5 billion bridge loan to Opel by the end of the month, while FDP Economics Minister Rainer Bruederle described GM’s action as “totally unacceptable.” The cabinet was expected to discuss the GM move on November 4. Opel’s labor unions, which had strongly backed the Magna sale because of its promise to save jobs and keep plants open, announced that workers would withdraw all concessions made under the terms of the Magna deal and start a general strike at Opel plants on November 5. While anger is widespread, there are already some voices outside the government advocating acceptance of GM’s announcement as the only viable alternative to a total collapse of Opel. End Summary.

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Having ignored the first wave of EV enthusiasm, Toyota turned to Tesla in the aftermath of its recall scandal as an investment that could potentially catch it up with other EV makers, and possibly help its battered image along the way. Officially, the deal was brokered after Toyota CEO Akio Toyoda drove the Tesla Roadster, and came away impressed with its “splendid flavor.” Toyota then dropped $50m on Tesla’s stock and another $60m on the Tesla-developed RAV4 EV prototype, raising the possibility of re-starting production at the NUMMI plant, which Tesla bought from Toyota as part of the hookup. But with Toyota also developing an EV city car in-house and talking up the return of hydrogen cars, Tesla’s role in Toyota’s future is clear as mud. If the RAV4 EV makes financial sense, Tesla could contract-build them at NUMMI, adding much-needed volume to a giant factory that would otherwise be building only the Model S (at a rate of about 20k per year).  But there’s the rub: Tesla clearly needs Toyota more than the other way around; it needs Toyota’s volume, manufacturing expertise and legitimacy. But what will Toyota get out of the relationship? An expensive EV compact crossover? Goodwill from the American people? The ability to keep in-house development looking past a short-term fad for EVs?

So here’s today’s puzzle: if you were Akio Toyoda, would you A) double down on Tesla, and buy a controlling share or even roll it into the parent company, B) quietly sell the stake and move on, or C) keep Tesla around as a speculative EV offshoot of the main company? It’s a complex question, and answers should touch on the market potential of EVs, Tesla’s strategy and viability, Toyota’s relationship with EVs, the PR benefits of keeping an American EV startup alive, and much, much more. Enjoy!

With battery partner Toyota already $50m deep in Tesla’s equity (and another $60m deep in an electric RAV4 development agreement), Automotive News [sub] reports the Japanese automaker’s main EV partner, Panasonic, is investing $30m of its own in the Silicon Valley EV form. Panasonic and Toyota jointly build NiMh and Li-ion batteries in a venture called Primearth, and the move appears to bring Tesla closer into Toyota’s orbit. Tesla already uses Panasonic cells in its drivetrains (although not exclusively), and the two firms have already partnered on power-pack development. Panasonic’s $30m investment is said to have bought it a two percent stake in Tesla, and the two will cooperate together on sales and marketing of those battery packs in the future.

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Aston Martin’s decision to sell a worked-over Toyota iQ has raised some serious questions for “brand values” advocates across the internet of late. Does an aristocratic sportscar brand need to take on the problems of urban congestion and carbon intensity? Does the Cygnet’s noblesse oblige PR value outweigh the furor of countless Aston Martin aspirants at the thought of their beloved brand becoming a glorified Toyota tuner house? The answer to both of these questions is apparently yes…
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Despite losing $600m, Vauxhall/Opel is planning for the future. They’re bringing the Chevrolet Volt to Europe and they expect to be back in the black by 2012. Now, it appears, they want to fill that hole in their lineup. You know? That city car sized hole? Just below the Corsa.

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Remember the 4 “dead brands” walking? Pontiac, Saturn, Hummer and Saab? Seems like a long time ago. Who’d have thought Saab would be the last brand standing? Arguably, the one of the weakest brands of them all. At least Hummer and Saturn had genuine interest. But Saab found a Dutch white knight (a white knight with a 3 legged horse and a rusty sword), in Spyker and survived. It really started heads scratching as to how a damaged brand and a never profitable car maker could survive in an industry where size is king. But it seems the Dutch-Swedish venture may be getting some help from an unlikely source. (Read More…)

In order to produce and sell cars in China, foreign firms are required to form joint partnerships with a Chinese firm. With a ten-year, $15b government EV stimulus in the works, automakers are complaining that a requirement to build EVs in partnership with Chinese firms amounts to government-mandated barrier to market access. A foreign automaker executive complains to the Wall Street Journal that the draft version of the government plan is

tantamount to China strong-arming foreign auto makers to give up battery, electric-motor, and control technology in exchange for market access… We don’t like it.

China’s automotive market is projected to grow faster than most, and with $15b of government assistance, the Chinese government has a big carrot with which to tempt foreign firms into sharing their technology. But the backlash is already building…

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If you want to offer hybrid cars, but don’t have the money / time / run rate / wherewithal to do it yourself, who’re gonna call? Toyota. But who would have imagined that haughty Daimler picked up the phone, dialed 0081, and said: “Let’s talk?” Daimler considers joining the growing list of automakers that source their hybrid systems from Toyota City.  Toyota is in talks to provide technology and core components for hybrid vehicles to Daimler, after having been approached by the Germans, says The Nikkei [sub]. (Read More…)