Like it or not, extending the concept of luxury into ever smaller classes of cars is the next big challenge for high-end auto brands. According to the latest print edition of Auto Motor und Sport, BMW is already working on their own subcompact FWD three-cylinder hatchback based on the next-generation MINI platform. Though none of these new micro-luxe vehicles are aimed at, let alone approved for the US market, it seems that a strict traditionalist perspective on luxury brand purity is going to be a lot more difficult to maintain as emissions standards continue to rise.

Here are the first reactions to Nick Reilly’s turn-around and begging plan for Opel. In one word: “Booooh!”

Roland Koch, Premier of Hesse, where Opel has its headquarters, where most of Opel’s jobs and countless suppliers are, should be most interested in the survival. What was his reaction? “According to our first assessment, it will be necessary that GM as the owner will increase its contribution considerably,” he said to Das Autohaus. Translation: “Put money on the table. Then we talk.”

Little know factoid: In 2008, Opel was the 7^th largest employer in Hesse, followed by Volkswagen, only 2,800  jobs behind Opel, most in a parts factory and distribution center in structurally weak Kassel.  When Opel has finished its reduction in force plan, VW will provide more jobs to the state than Opel. Koch knows which side his bread is buttered.

The unions, which should be most interested in preserving jobs, immediately shot down the plan. (Read More…)

Opel’s Nick Reilly today revealed details of Opel’s long-awaited business plan. Here are the highlights (and low points) as reported by Automobilwoche [sub]. (Read More…)

This week, Opel will embark on a pan-European begging tour. Applications for government aid will be sent to Germany’s central government, Germany’s states with Opel plants, and to the European countries where Opel has a presence. A business plan, and an expert opinion from the little known CPA firm Warth & Klein will complete the package, writes Das Autohaus. Target of the funds drive are €2.7b. Opel management still counts on wage concessions of €265m per year over five years (a total of €1.3b). Unions and the Opel Works Council already have said “nein” to the concessions. Governments want to see the paperwork first, (Read More…)

TTAC has reported on VW’s plans to become the global number one. Looking at Toyota’s current quality problems, one could be excused for thinking that there just might be some substance to Wolfsburg’s plans. After all, Toyota’s days of glory seem to be over, while VW is on a roll, with sales growing and quality improving. Right?

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When Martin Winterkorn took over as CEO of Volkswagen, he said that Volkswagen wants to be better than Toyota, not just in units, but in profitability, innovation, customer satisfaction, everything. Toyota was the declared enemy of VW. Toyota was bigger, made more money, had happier customers. When Winterkorn declared the lofty goal, it was shrugged off. Incoming CEOs routinely make grand announcements which nobody really takes seriously. The year was 2007, Volkswagen had just become #3 in the world. Toyota was #2, leading VW by more than 2m units sold worldwide. Towering above all was GM, with 9.3m units sold, 800,000 more than Toyota.

A little after the quote above, first rumors about a “Strategy 2018” surfaced. The plan wasn’t public. I knew someone at VW who had seen (but wasn’t given) the strategy, and he confirmed that it said that Volkswagen wanted to overwhelm Toyota – in 10 years. Insiders (this reporter included) rolled their eyes and denounced the plan as the usual hubris of an incoming CEO, a suit who’d be busy collecting his pension by the time 2018 rolled around. I was wrong. (Read More…)

Germany is suffering from Abwrackprämien-withdrawal. Message to dealers: Not this month, we have a headache. January sales are down 4.3 percent compared to January 2009. Only 181,189 new cars found their way on Deutschland’s roads. 4.3 percent may not sound earth shattering. But we are comparing with an exceptionally crummy January 2009, when sales were so awful that Berlin quickly launched their German cash-for-clunkers Abwrackprämien program. This time around, Germans bought even less. It’s been the most miserable January in some 20 years. (Read More…)

Opel is running out of time and out of money. In the second quarter of 2010, the company will be out of cash again, figures the German Handelsblatt. As indicated yesterday, discussions with the unions are going nowhere. Says the Handelsblatt:”Management is preparing for a breakdown of the talks.” Reilly and his crew are trying to find ways how to get Opel going without wage concessions by the unions. But how? (Read More…)

German Mercedes tuner Carlsson has announced a 25-unit, limited-edition C25 coupe based on the Mercedes CL and the ancient nightmares of dread Cthulu. Sure, it has a 735 hp turbocharged V12, but that isn’t why people will buy it. The real ownership pitch: Carlsson will only sell one per country, thereby “guaranteeing exclusivity” for its buyers. Which begs the question: would Carlsson have sold that many C25s on their own merits? We think not.

Opel finally has a restructuring plan. Opel CEO Nick Reilly announced the good news this morning, says Automobilwoche [sub]. “All we need to do is to come to a final agreement with the unions and the works council. I hope, this will happen within the next two or three weeks,” said Reilly. I there a doctor in the house? We have a serious case of relentless optimism. (Read More…)

A suit filed yesterday by Elliott Associates LP, Glenhill Capital LP, Glenview Capital Partners LP and other financial firms who were NSFWd by Porsche‘s attempted takeover of VW, alleges Porsche “manipulated the price of VW stock as it secretly accumulated control over almost all of VW’s freely traded shares” [suit available for online viewing here]. Porsche has been under investigation in Germany for stock manipulation since October of 2008, and the legal wardrums have been sounding ever since. The plaintiffs are seeking over a billion dollars in damages… and yes, Bertel, one of the plaintiff hedge funds (Glenview Capital) is owned by Goldman Sachs. What is it that they say about payback again?

The Japanese press is making a big to-do out of the combined 2009 sales of Volkswagen and Suzuki. Or rather out of the fact that the two together sold more than Toyota. „Suzuki-VW Beats Toyota In Global Sales In ’09” headlines The Nikkei, as if the two would be one company.

That the two of them could easily crush Toyota is no news to TTAC readers. When we announced the VW-Suzuki nuptials on Dec 9, 2009, we said: “Suzuki has an output of 2.36 million units a year; added to VW’s sales, Toyota would be toast.”

The Nikkei did the adding, and writes:  (Read More…)

People buy cars they don’t need with money they don’t have to impress people they don’t like. That’s why hardly anybody in Europe is buying the Chevrolet Cruze, which has been on sale over here since last summer. It’s an affordable car that you might need but you won’t want, and which won’t impress anybody at all, because it’s just not that desirable. Allow me to explain…

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The German paper Rheinische Post runs an interesting op-ed piece today. Headlined: “Opel fights its demise,” the article concludes that Opel most likely won’t make it:

Opel CEO Nick Reilly is facing a dilemma. Even before the outbreak of the economic crisis, Opel was confronted with an overcapacity of 20 percent. The Abwrackprämie being behind us, sales will crater. This creates extra pressure to eliminate more jobs. If Reilly implements his restructuring program, then he will have to fight the opposition of the workers. For once, it is easy to put a number to this: €265m a year. The workers wanted to forgo this sum – if Reilly won’t shut down any plants. Now Reilly is €265m short – and has to cut more jobs. At that point, the governments, on who’s support Reilly counts, will call it quits. Whether Opel is kept alive with tax money, with funds from the parent, or with money from the workforce: an artificial respiration of a company is ultimately more expensive than anticipated. And it is almost never successful.