So far, the strikes in China were just small – but effective – sideshows. Strike at a small, but strategically important supplier, and whole car factories shut down. That, however, only led to wage increases at the small, but strategically important supplier. Until last Wednesday.

In a deal to prop up their books, GM is selling more assets to the Chinese. GM sold its Nexteer Automotive steering-parts unit to China’s Pacific Century Motors, a company formed by China’s Tempo Group and the Beijing government’s investment arm E-Town.

The European Commission concluded that the sale of Volvo to China’s Geely would not significantly impede competition in Europe (well, that would have been a stretch), and approved the transaction, says Reuters.

Speaking of German car companies doing exceptionally well despite a tanking German car market, there is of course Volkswagen.

The Volkswagen group sold more than 3.5m units worldwide in the first six months of 2010, besting the pretty darn good numbers of the same period in 2009 by about 15 percent, Martin Winterkorn said to Reuters. He predicts (and that’s an easy call based on the half year results) that the Volkswagen group will see record car sales in 2010. What’s driving the new Wirtschaftswunder? The weak Euro, of course. And the strong position of Volkswagen in boom markets such as China.

Nevertheless, VW doesn’t want to rely on the vagaries of the foreign exchange.

There was a time, in summer of 2007, when a dollar bought more than 120 yen. Once you arrived in Tokyo, you quickly wished it would have bought more. Now, the dollar buys about a third less. The dollar/yen rate had been at a downward trajectory since that summer of 2007. What made the yen really expensive was a company called Lehman Brothers, and the fallout following their bankruptcy in 2008. For inexplicable reasons, the yen is seen as a safer currency than the greenback. Should you make the mistake of stepping off the plane with Euros in your pocket, you would be in for an even bigger shock. In July 2008, a Euro bought 170 yen. Now, it’s down to 109. For even more inexplicable reasons, some mentally unstable people still talk about an undervalued yen.

You may not travel to Tokyo frequently enough to give a hoot. But Japanese auto manufacturers don’t want to take it any more.

Know what to do next time you see a higher price at the pump? Don’t buy gas on May 15? How lame. Learn from the folks in India. According to the BBC, India’s opposition parties have called a general strike against fuel price rises, and “normal life has been disrupted in many parts of India.”

Last week, we reported some totally discombobulated June sales numbers from China. People’s Daily had reported that “China’s auto sales slumped by 17.4 percent in June from May, to less than 10 million vehicles.” Hooooo-kay. If you say so.

Now, state-run news agency Xinhua reports numbers that make a bit more sense. Still not the official CAAM data, but close enough.

Suzuki, Hyundai and Tata are the King Dongs (that WASN’T a spelling mistake, BTW) of India. Suzuki controls over half of the Indian car market. Hyundai and Tata have major chunks, too. Whatever is left is divided up amongst the smaller parties. But why have Indians put their rupees in the hands of Suzuki, Hyundai and Tata? National pride? Hardly. Suzuki and Hyundai come from a little further east. Nope. The reason is because they all excel in one thing. Small, cheap cars. The majority of Indians are relatively poor and don’t have much money to spend, so when they make a purchase as big as a car, it HAS to provide value (Indians LOVE a bargain as the video shows). If further proof were needed that India loves small, cheap cars, then this next story should put it beyond reasonable doubt.

Still convinced that the Yen is undervalued? Japanese carmakers beg to differ. They think the Japanese currency became so expensive that it gets cheaper for them to build abroad and to import to Japan. We’ve reported that Nissan is moving the production of their Micra (called March in Asia) to Thailand. When they did this, The Nikkei [sub] saw “huge implications for the future of the Japanese auto industry as a whole.” It certainly looks like Nissan’s exodus to the Land Of Smiles ( and occasional riots) started a trend.

A three-way relationship in the open is every man’s dream. Those who tried it usually recommend against it. Why? Just ask them. As predicted, Mazda is putting an end to the three way Chinese Changan-Mazda-Ford joint venture. Mazda wants to go it alone with Changan, and no longer play third fiddle.

You think Japan is import-adverse? Have a look at that chart that follows, and you will see a wondrous trend: Japanese automakers are importing more and more foreign owned cars to Japan. Some of them even from the U.S. Now, the imports will increase. Not from the US, but from ….

Japanese new car sales rose 20.6 percent year on year to 293,537 units in June, up for the 11th straight month, the Japan Automobile Dealers Association just told The Nikkei [sub]. And the best part is:

Better late than never: Fiat is betting big on their comeback in China. All eyes on their Changsha-based (read middle of nowhere) joint venture with Guangzhou Automobile Group Co (GAC). They are about to be open for business. Gasgoo says there will be three Fiat models, the first a newly designed mid-class sedan, codenamed C-Medium (any guesses?) If local media has it right, two Jeep-brand SUVs will also be produced in the new joint venture. Their codenames are SUV-3 and SUV-4 (any guesses?)

You thought the strikes that affected Honda and Toyota in China are over, and both are happily churning out cars again? That makes two of us. But we are mistaken.

A strike at two Toyota-affiliated parts makers brought Toyota’s largest assembly plant in China to a halt. No parts, no cars. Toyota’s factory in the port city of Tianjin near Beijing stopped production on Friday. A day later, it is unclear if production would resume on Monday, Reuters says.

The strike at a small plastic maker stops production at Toyota’s most important plant in China.

Now here is the perfect place for electric vehicles: Hong Kong. Range anxiety? Not here. Hong Kong is a city where no trip is more than 20 miles or so one way. Driving into the hinterlands is blocked by a border and by the necessity for secondary mainland Chinese license plates. Registration taxes on cars are high, they vary from 35% to over 100%, based on the size and value of the car. Gasoline prices are high, about half of the price is tax. Fertile grounds for EVs.

The Honda strikes have been settled – more or less. Now it’s Toyota’s turn. Workers at an auto parts factory in Tianjin, China, run by a Chinese subsidiary of Toyoda Gosei, 42 percent owned by Toyota, went on strike Thursday and had not returned to their jobs today, a Toyoda Gosei spokesman confirmed to the New York Times. The factory makes plastic parts for a FAW-Toyota joint venture assembly plant in Tianjin. It’s not the only strike that affects Toyota.

When Volkswagen CFO Hans Dieter Poetsch was asked to make some forward looking statements on April 29, he was reasonably confident that Veedub could improve sales and operating profit from the 2009 level, “but that’s it.” Now suddenly, Volkswagen throw caution to the wind and says that the company would “significantly” exceed last year’s results when 2010 is over, says Reuters. That assessment, made by a usually very cautious company, is bolstered by a forecast-beating performance in the first five months.

Nissan seems to have a golden hand for mini-utes. First, they had to put in a third shift in Europe for their unpronounceable Qashqai crossover. Now, news reaches us from Japan (via The Nikkei [sub]) that orders for their Juke compact SUV that went on sale in japan a few days ago, the monthly sales target of 1,300 units by over 300 percent in the first week alone.

Spoiled market watchers were disappointed by China’s less than red-hot May numbers: Passenger vehicles grew just 23.2 percent, the whole market grew 26 percent. Now here’s a number worth waiting for (or to induce a heart attack, if you have green leanings:)

Approximately 1 million passenger cars (including MPVs, SUVs, and Minivans) changed hands in China in May, up 23.2 percent from a year earlier, the lowest rate during the past 13 months. That according to the China Passenger Car Association, as reported in China Daily. This is not yet the total vehicle count, which should be reported by the CAAM a few days later. The passenger car number usually is within a few points of the CAAM number. Is that good or bad?

Did we say that the strike at a crucial Chinese parts plant is being closely watched? Last week, a 20 percent pay rise was given at a Honda-owned transmission plant, and slowly, everything went back to normal. Until today. Honda is in trouble again.

After on-again and off-again attempts at an Eurasian marriage ( which I would unreservedly endorse,) Mitsubishi and PSA are doing the thing currently en vogue in Europe: Live happily in sin, and produce little ones. Very little ones.

How did Tokyo digest Toyota’s lackluster U.S. May sales performance? In a market that forged ahead by 19 percent, Toyota grew only 6.7 percent. Even more embarrassing, other Japanese brands like Mazda (+ 35 percent), Subaru (+35 percent), or Nissan (+24 percent) had outpaced the market. When Tokyo woke up to the bad news this morning, everybody ran to the phone, called their broker and …

Everybody is waiting for a sign of the Chinese car boom to go ka-boom. Bloomberg aims to please, and has the story that Chinese “passenger-car sales growth slowed in May as falling stock prices eroded wealth and consumer prices rose in the world’s largest automobile market.” Bloomberg is alarmed that growth was only 25 percent. Let’s have a look.

Production at the Honda parts factory in Foshan, China, partially resumed this Chinese afternoon after Honda offered to increase the wages of striking workers by 366 yuan ($54) a month, company officials told The Nikkei [sub]. This reflects a pay hike of 20 percent.

Korea? Bzzzzt.

The U.S.A.? Bzzzzt. Not yet and not quite.

The strike at Honda’s transmission factory in China that has led to the closure of all Honda sites in China shows no sign of resolution. Actually, there is a new twist: Management is leaning on school interns not to strike, Hong Kong’s South China Morning Post reports. Why the sudden focus on interns?

Jalopnik carries today the revelation that in the Tesla/Toyota agreement, there is no “formal deal with Toyota to build a new electric vehicle yet.” Let’s overlook for a second that the report is nearly verbatim lifted from Venturebeat. If Jalopnik would have read our story about Toyota and Tesla, they could have printed the above a week earlier.

Having recently hooked up with firms like BYD and Suzuki, Volkswagen is continuing its rampage across the developing world’s markets, as Reuters reports that the VW’s leadership is in talks with the Malaysian state-owned (42 percent) automaker Proton. VW had previously sought an alliance with Proton, but talks broke off without an agreement in 2007. According to Bloomberg BusinessWeek, VW is not likely to take a stake in Proton despite last year’s policy shift by the Malaysian government allowing foreign firms to own majority stakes in mainstream Malaysian automakers. Proton was founded as a joint venture between the Malaysian state-owned firm Khazanah Nasional Berhad, and Mitsubishi.

Someone is in a big hurry: In March, Daimler and BYD signed an agreement to develop an all electric vehicle “specific to the requirements of the Chinese market.” Usually, it takes a while until something comes from these announcements, especially in China, where everything needs a lot of big red chops. Much to our surprise, we hear that BYD and Daimler signed the contract today to form a 50:50 joint venture for the aforementioned purpose.

Nobody in possession of his or her faculties doubts that China will remain the world’s largest auto market for this year and years to come. In 2009, Chinese bought 13.6m vehicles, up 45 percent. In the U.S.A. 10.4m units changed hands in 2009, down 21.2 percent. This year, the U.S. A. is expected to recover, but not by much: J.D. Power forecasts 11.2m units sold in the U.S. for 2010. How many will be driven off dealers’ lots in China this year?

At the Beijing Auto Show, Geely had a whacko two-seater, gullwing adorned concept car on display. I didn’t deem in worthy of mention, along with the hundreds of other whacko concepts. I didn’t even snap a picture. I wish I did. If Chinese media is not mistaken, I missed taking a picture of the world’s cheapest car, cheaper than the Tata Nano.

As you remember, Susan “If you know what I’m good for, answers on a postcard, please” Docherty got canned from her job of Sales and Marketing of U.S Operations, to make room for Joel Ewanick. Back then, many thought it was only a matter of time before ol’ Doperty (see what I did there?) got the ol’ heave ho from GM CEO Eddie Whitacre. Unfortunately, it seems someone still likes her (again, answers on a postcard, please) and she’s now landed another gig at GM. Only this time, they’ve let her loose on the golden goose (hey, see what I d….never mind).

Nissan won’t sell their much ballyhooed pure plug-in Leaf until December. But a successful launch wants to be well planned, and Nissan thinks of everything. They won’t sell you the Leaf just yet. But you can already buy the charger. If you bank account is properly charged.

Demonstrations in Bangkok have been put down with a brutality not expected from the Land of Smiles. The stock exchange is on fire. Thailand instated a news and power blackout, making the number of killed and wounded hard to assess. Japanese car makers have long been invested in Thailand. Now, they are worried about long-term implications.

At the Beijing Auto Show, they had a fine-looking and well-appointed Buick MPV, called the “Business Concept” (shown above.) I gave it no mention. After all, who cares about a concept MPV that will never see the light? Big mistake, Schmitt: It will see the light faster that I thought, namely by the end of the year.

You think U.S. car makers suffer from brand confusion? Come to China! China’s Chery for instance is known for their low-cost cars, especially for their ubiquitous el cheapo QQ. In order to venture into more upscale segments, Chery launched a number of brands, amongst them Rely (for SUVs, get it?), Karry (for minivans and pick-ups, get it?) and Riich (for upscale models, get it?) Now, the confusion starts.

A good old friend is coming back to China: The Jeep. Guangzhou Automobile Group Co (GAC) is expected to produce Chrysler’s Jeep at its Changsha-based joint venture with Fiat, Gasgoo reports.

While bullets fly in Bangkok, Toyota announced today that production at a Toyota plant near Bangkok will cease by the end of May. Toyota says the plant closure has nothing to do with the public unrest, it should be seen on the context of the reorganization of Toyota’s global operations, says The Nikkei [sub].

Threesomes can get burdensome to keep together. Didn’t we report in January that Ford, Mazda, and China’s Changan want to end the ménage-a-la-trois and forge their individual joint ventures? It was quickly dismissed as “speculation.” Just because it’s a speculation doesn’t mean that it won’t come true.

Never has there been so much confusion over the closely watched Chinese car sales than this month. A relatively unknown China Automotive Technology and Research Center (CATRC), anointed by a report in Xinhua, had 40 percent growth for April. Then, all kinds of numbers came out. Chinese numerology was in an April disarray. Even TTAC’s in-house sales oracle, GM China became confused. First, GM reported a gain of 50 percent. A week later, the number was revised to 41.1 percent. (Which would indicate a Chinese market growth in the mid 30s.) We recommended caution. The last word on Chinese auto sales has the China Association of Auto Manufactures (CAAM). And the CAAM has spoken.

Ever since the late 90s, car manufacturers and especially car dealers were scared of the Internet. By the end of the 90s, it was agreed that the likes of Carpoint or Autobytel would turn into huge virtual showrooms and would put dealers out of business. It didn’t happen. The opposite happened. The many car shopping sites drove business to dealers. Ten years later, there it is again: The specter of the wicked disintermediation has returned. Direct sales to customers via electronic media are popping up in the world’s largest auto market.

U.S. Transport Secretary Ray LaHood is in Japan today. He’s looking at trainsets. Japan is bidding on the U.S.A.’s (long in the) future high speed rail network. So is everybody else in the world, including the Chinese. Good luck to both of them. While in Japan, LaHood personally inspected Toyota’s safety facilities in Toyota City to see whether they are up to snuff. You think Mr. “Feet to the Fire” LaHood gave Toyota a clean bill of health? Think again.

Hyundai is riding high. They’re being thought of in the same vein as Honda in terms of quality, the same as Ford in terms of value and the same as Toyota in terms of reliability. So what could be left for Hyundai to do? They want you to think of them as a …

Give up? The answer is that they’re giving South Korea a headache. OK, let’s go back a bit. The Korea Times reports that something funny is happening to the South Korean car market. Effectively, for years, the South Korean car market used to be closed off to foreign competition, thus, keeping domestic production and sales high. The market for foreign was only for the exclusively rich who didn’t mind paying the tariffs. But now, even the proletariat is getting in on the act. In spite of a global slump in the market, the Korea Automobile Importers and Distributors Association (KAIDA) reports that foreign imports rose, month on month, by 51.1 percent, to 7,208 units in April. Still a drop in the water: Korea makes 3.5m cars in a good year, of which 2.5m are exported. But it’s a start.

Toyota still hasn’t announced its final numbers for the 2009 fiscal year that ended on March 31. And the musings continue. Previously, a loss was assumed as certainty. Come on, how can a car company the size of Toyota escape carmageddon and pedal-gate unscathed? Then, there were speculations that Toyota would report a slight gain, of say, $500m. Now, there are people who think it will be more …

As if the Japanese don’t have enough problems in China, now the Chinese are beating them at their own game: Quality.

“Many Chinese automakers are focusing on improving their quality control by introducing techniques developed in Japan and elsewhere overseas.” This assessment doesn’t come from a propaganda arm of the Chinese car industry.

There is a major shift underway in the Chinese auto market. Cars are morphing from something exclusively owned by the rich to an everyday item. Sure, luxury cars are big in China. But the volume growth is in low cost cars. As a result, the market share of sino-foreign joint ventures is eroding. Local players, such as BYD are gaining fast. The foreigners are getting worried.

The Japanese new car market, long believed to be down, out, and a victim of the dreaded demographic bomb, remains on its steep upward trajectory. With a little help from Japan’s benevolent government. Japan’s domestic sales of new cars, trucks and buses increased 33.5 percent from a year earlier in April, the Japan Automobile Dealers Association said today as per The Nikkei [sub]. That’s up nine months in a row. One brand is especially happy. Name starts with a T.

If anybody will again blather about a “weak yen” that has been “manipulated by the Japanese government,” then I’ll personally come visit, with the intent to insert a sock in the mouth. For reasons explicable only to forex mavens, the currency of the economic basked case Japan keeps on getting stronger. Japan’s car manufacturers think this will continue, and they are taking precautions. More precisely, they are taking production out of Japan.

Thank you, God, or make that Uzume, for keeping me alive long enough so that I can announce this: The Governator himself, that Austrian incarnate of Red, White, Blue, Mom & Apple Pie, has received a starring role in China’s Xinhua newswire:

“California Governor Arnold Schwarzenegger announced on Friday that Chinese manufacturer BYD Auto Company Limited (BYD) will locate its North American headquarters in Los Angeles.”

Expo-nential growth

While (usually foreign) analysts are dead worried about the Chinese car bubble to pop and never to be seen again, Chinese car companies are happily raking it in. Western companies, mortgaged to the hilt, or on government life support, are developing a serious case of China-envy.

The one thing I love about the car industry it its ironic sense of humour. Remember the four dead brands of GM? Who’d have thought SAAB would be the last man standing? When Ford was trading at $1 a share and their stock was labelled “Junk” status, who’s have thought they’d be where they are now? Now, I can’t speak for the rest of the B&B, but I’m, personally, sick of this UA business with Toyota. I’ve been rather sceptical from the start and very little has happened to change my mind. However, the God of Irony is still working in the car industry and whilst I was grazing the internet today, I came across this belter: Unintended deceleration.

Ah, the amount of ingenuity electric cars trigger. They need to get charged. Cheaply. They need to get rid of the bad rap that creating electricity isn’t the environmentally friendliest endeavor on this planet. So what about wind power? Comes with its own set of problems. Mitsubishi and the Tokyo Institute of Technology got together and devised a method to use excess wind power to charge electric vehicles while saving the power company gobs of money, a.k.a. the dreaded capex problem. The result? A true wind-wind situation!

With all the tie-ups going on between Japanese and mostly European car makers, conventional wisdom had it that Honda would not take part in the nampa with the gaijin. Everybody saw them stay pure and Nipponese. Not so, said Executive Vice President Koichi Kondo yesterday to The Nikkei [sub]. They would very much like a little tete-a-tete with attractive suitors. They were the wallflower, because they were too shy and awkward. Now, Honda is ready to play.

The French-Japanese relations continue to bloom. Here is the latest tie-up. Forget former on-again, then off-again relationships. This time, it’s serious. The Nikkei [sub] reports that Mitsubishi Motors and France’s PSA have tied the knot and will jointly breed new sports utility vehicles.

This chair will soon be vacant

Remind me to send a bill to Volkswagen for propaganda services rendered. Maybe I can use my old Lieferantennummer. (Supplier’s Number.) Otherwise, TTAC and your humble BS would be ripped off left and right.

Yabe! (Oh shoot.) As the sun set over Toyota City and Tokyo, Toyota’s execs and Sararimen (salary men) alike were crying in their sake. Today was a sai aku (very bad) day. A day everybody at Toyota most likely would want to forget. No, no recall for a change. There isn’t much left to recall anyway, or so it seems.

The sai aku day started with Moody’s downgrading Toyota’s formerly stellar credit rating to “its lowest-ever level,” as The Nikkei [sub] laments. Moody’s came to the somewhat belated conclusion that “multi-million vehicle recalls and safety issues raise questions about its profitability and ability to stay ahead of rivals on pricing power until 2012 at the earliest.”

To make matters even more sai aku, Moody’s warned that its outlook for the rating remains negative. Why the pessimism?