Last December, Toyota and BMW announced “a long-term technological partnership.”  Ostensibly, it was about developing batteries together, and about BMW supplying diesel engines, in that order. Four months later, the priorities seem to have changed a little.

In a joint press release, Toyota and BMW announce that they just now have signed an agreement on collaborative research for lithium-ion battery cells. Research has started, and this being research, it can take a while.

The diesel engines will come earlier, and in earnest. Toyota has contracted BMW as the supplier of highly efficient 1.6 liter and 2.0 liter diesel engines, and BMW will start shipping in 2014. Toyota has realized that diesel is a big seller especially in Europe, where it holds 50 percent market share. Diesel is making inroads in India. Even in Japan, diesel cars are beginning to appeal to customers. Toyota has its hands full with hybrids and other new generation technologies and does not have the bandwidth to tinker with its own diesel engines.

In Europe, half of the cars sold are diesels. In The U.S. and especially in Japan, automakers literally wrinkled their nose at oilburning cars. This is slowly changing, says The Nikkei [sub].

In India, a market owned nearly 50 percent by Suzuki, gas prices have soared 36 percent over the past year and a half, while diesel prices have increased by a more modest 14 percent.

Diesel-less Suzuki was blindsided by a wholesale shift to diesel. It dragged down Suzuki’s sales from April 2011 through February 2012 by 13 percent on the year. Mahindra & Mahindra has diesel and saw its sales jump by 36 percent. Suzuki did react by buying diesel engines from Fiat, much to the chagrin of Volkswagen.

Honda has developed a new diesel engine for the first time in six years. It plans to use it in Civics produced at Honda’s plant in Wiltshire, England.

Toyota forged an alliance with BMW to supply mid-sized diesel engines that will go into Toyota’s European offerings.

In the U.S., diesel market share is below 3 percent, in Japan, the share is below one percent. The Nikkei sees “signs that diesel cars are even appealing to consumers in Japan.”

In its first month of sales in February, Mazda received about 8,000 orders for its new CX-5 sport-utility vehicle, with diesel models accounting for 73 percent.

There was ample hand-wringing when Volvo announced the death of their iconic station wagon in North America. While enthusiasts mourned the death of a cult classic, Volvo also announced a plug-in hybrid version of their V60 wagon, powered by a diesel engine and a hybrid drivetrain. Naturally, this vehicle was not destined for sale in North America.

The non-available V60 plug-in constituted the ultimate slap in the face for the Volvo faithful. Here was the newest generation of Volvo wagon (as opposed to the warmed over XC70 offered recently) with an environmental bent and the Euro-cachet of a diesel engine – but where was it? As Jamie Kitman of Automobile magazine rightfully pointed out, their core buyer is “green” but refusing to import such a vehicle may not be “lunacy”, because the Swedes have something more suited for American tastes – the same hybrid goodness, packaged as a gasoline-powered crossover.

Rather than the V60 diesel-hybrid, North Americans are being treated to a plug-in hybrid based on the XC60. Set to be unveiled at the North American International Auto Show next week, the XC60 plug-in will use a 280 horsepower 4-cylinder gasoline engine and a 70 horsepower electric motor for a total output of 350 horsepower. The gasoline engine will drive the front wheels, while the electric motor will power the rear wheels. Volvo claims that the vehicle can be driven in electric mode for up to 35 miles and return up to 50 mpg. Stefan Jacoby, Volvo’s CEO, noted that the gasoline powered version will be an important car for China and Russia as well as the United States, as this likely has as much to do with the crossover body style as it does the gasoline engine.

On a personal note, my folks bought an XC60 T6 this summer, and I have spent ample time in it. While perpetually ignored in the marketplace, the XC60 is a car I’m fond of, with a powerful engine, a well-appointed cabin and good driving dynamics. At the time of purchase, I urged my parents to look at the XC70 T6, but it cost a few thousand dollars more and offered little appreciable difference to them. If a couple of upper-middle class car enthusiasts saw little value in opting for a wagon over a crossover, then what chance would a station wagon have with more conventional buyers, who are likely to be even more image-conscious and resistant to the idea of a wagon? On the other hand, my parents have a 5.4 mile commute through a downtown core to their office, and something like this would be right up their alley. Hopefully pricing won’t be so exorbitant that it cancels out any economic benefit for buying the XC60 plug-in.

Forget Amerindian prognostications of the apocalypse occurring in 2012 – the sight of an oil-burning Porsche SUV is enough for some to consider it the end of the world.

The announcement of a diesel powered Porsche Cayenne was buried deep within a press release for the Porsche 911 Cabriolet’s debut at the 2012 North American International Auto Show. According to the release, the spring launch of the previously revealed Panamera GTS “…will subsequently be followed by the Cayenne Diesel as Porsche’s first compression-ignition car in the USA.”

A bit of digging on the Porsche UK site shows that the Cayenne Diesel puts up some decent numbers. 245 horsepower and 405 lb-ft of torque with the sprint to 60 mph coming up in 7.6 seconds. A V6 powered Cayenne with the Tiptronic gearbox is only .2 seconds quicker. The Diesel has the clear edge in fuel economy – returning 8.4L/100km in the city and 6.5L/100km – according to our conversions thats 27 mpg around town and 36 mpg on the freeway. The Cayenne V6 returns a meager 16/23 mpg by comparison.

Pricing and positioning for the Cayenne Diesel hasn’t been announced, but we can look to both the existing Cayenne lineup as well as its competitors for clues. The current Cayenne lineup has the Cayenne V6 at $48,200, while the V8-powered Cayenne S retails for $65,000. The Hybrid model (with a supercharged V6 and hybrid drivetrain is $69,000. The diesel will have to bridge the substantial gulf between the two cars, and given Porsche’s propensity to charge exorbitant sums for trivial widgets like colored wheel crests, look for the Cayenne Diesel to err towards the higher side of the pricing spread.

BMW and Mercedes-Benz offer their own range of diesel engines on certain SUVs (the X5, M-Class and GL-Class. The R-Class is questionable as an SUV), but their pricing strategy differs as widely as their respective marketing narratives.  BMW positions the X5 diesel as a much more expensive option – costing some $9200 more than a base X5 35i with the 3.0L twin-turbo I6, while the Mercedes ML350 BlueTEC carries a premium of $1590. The GL350 BlueTEC on the other hand costs $1000 less than the base gasoline GL450.

Another day, another disappointment for American fans of the Indian automaker Mahindra’s rugged, diesel-powered trucks. Earlier rumors that Mahindra might build its trucks with Navistar in Alabama turn out to be false, as a press release published at MahindraPlanet notes

MUMBAI, India, December 17, 2011 /PRNewswire via COMTEX/ — “There have been reports in certain quarters of media and online space stating that Navistar USA will produce Mahindra’s T20 and T40 pick ups in Alabama, USA in 2012, which are completely baseless & incorrect. If & when there are any material developments, Mahindra & Mahindra Limited will communicate them directly and transparently.”

If you haven’t given up on the Mahindra dream, now might be a good time to consider it…

German-Nipponese alliances are not going out of style, the Volkswagen/Suzuki soap notwithstanding. Toyota and BMW cut a diesel deal – if The Nikkei [sub] is correctly informed. They ran the story very early in the Japanese Saturday morning; hence no comment from Toyota is available. We’ll ask on Sunday, when we’ll see that mysterious RWD sports car.

According to The Nikkei, BMW will supply diesel engines for Toyota’s passenger vehicles sold in Europe. When and how many is unclear.

Toyota is betting heavily on hybrids, but Europeans are hybrid-averse and prefer diesel instead. Not having diesel options misses more than half of the market. However, with only a 4 percent share of the European market, spending too much time and money on diesel engines does not make sense for Toyota.

BMW on the other hand needs the volume, and is willing to sell diesel engines to anyone with money. “Toyota is expected to share its technologies for hybrid systems and related areas if requested,” says The Nikkei.

Volkswagen had painted a bulls-eye on Toyota and wanted to beat the Japanese by 2018. At least in terms of production numbers, Volkswagen will have Toyota beat this year. Instead, VW has to contend with GM.

The long-term new energy strategy of Volkswagen and Toyota on the other hand could have been devised in a joint planning session. Volkswagen believes that near-term, the plug-in-hybrid has a great future, whereas Volkswagen’s CEO Martin Winterkorn won’t live long enough to witness the boom of the pure electric car.

The German newspaper Handelsblatt has an interview today with Winterkorn. It echoes in large parts the interview which I had ten days ago with Toyota’s Chief Engineer Satoshi Ogiso. The two sound amazingly similar: Bullish on plug-in hybrids. Cautious on EVs.

Winterkorn on EVs:

“I cannot imagine that the whole fleet will run on pure electric power in the foreseeable future. A current technology lithium-ion battery weighs 250 kilograms, and in the best case, it will take you 150 kilometers down the road. Maybe this can be optimized a little, but I expect significant progress only from the next generation of batteries. From our current perspective, this could be based on lithium-sulfur. This battery could be good for 300 kilometers.

A decisive technology leap could be lithium-oxygen batteries. This is a topic that still needs a lot of research. With this technology, a car could have a pure electric range of 450 to 600 km. That would be the breakthrough.

But I don’t expect it before 2030. It won’t happen in my life – at least not in my life as CEO of Volkswagen.”

Winterkorn on plug-in-hybrids:

„The bridge to the future will be the plug-in-hybrids. You can charge their battery from a wall socket. You can drive 50 or 6o kilometers on electric power, then, an efficient internal combustion engine powers the car. Right now a gasoline engine, at some point in time a diesel.

That way, the battery can be down to two thirds of both the weight and the price of a pure EV. Don’t forget, the battery of a pure EV alone costs €8,000 to €10,000. Together with Bosch, we want to reduce the price of the battery to € 5.000, but that is still a lot of money. A battery for plug-in-hybrids runs us only €3,000 today.”

Interesting: Winterkorn didn’t mention hydrogen at all. Volkswagen used to be gung-ho on hydrogen.

The growing markets of the world want flexibility. That means power and capability combined with comfort and efficiency. TrailBlazer does it all. You can tow anything, go anywhere, comfortably seat seven people, and do so with the fuel efficiency associated with a smaller, less capable vehicle. It’s the complete package

But Americans don’t want any of that. Americans want a nice, car-based Equinox or Traverse. And that’s just what they’ll continue to get…

As the automaker that’s least-prepared for upcoming increases in federal fuel economy standards, it was more than a little surprising to find that Fiat’s five year plan for Chrysler did not involve any significant plans for hybrid drivetrain development. But more recently, CEO Sergio Marchionne has said a hybrid Chrysler 300 would be offered in 2013, and the firm hooked up with the feds to work on a hydraulic hybrid drivetrain. And though new CAFE regulations offer generous credits for hybrid pickups, a policy choice that rescues Chrysler’s investment in “Two Mode” hybrid technology, more will have to be done. For, in the words of Marchionne [via Automotive News [sub]],

I have no other way of getting to 2025 numbers than by going to hybrids

But Chrysler won’t rely fully on hybrids in order to make the significant fuel economy improvements it needs. In fact, it will be relying as much on diesels and compressed natural gas (CNG) drivetrains as anything else.

AN [sub] reports

Marchionne said Chrysler’s hybrids would be in addition to a broad offering of diesel-powered vehicles in the United States.

He said Chrysler will begin offering a diesel-powered Jeep Grand Cherokee in 2013, and thereafter most Chrysler Group large vehicles will offer a diesel in the United States.

Which is an interesting revelation. First of all, it calls into question Bob Lutz’s analysis of the difficulties of bringing diesels in line with US emissions standards. Lutz argues that the benefits don’t outweigh the costs and compromises, but clearly Marchionne disagrees. And yet he clearly realizes that there are easier feats: Chrysler’s five year plan called for a stop-start, diesel Wrangler in 2010… and yet that still hasn’t materialized. Jeep CEO Michael Manley noted back in early 2010 that

We have no plans at the moment for diesel Jeeps in North America

Clearly that’s no longer the case… which means Chrysler’s product plans are relatively fluid. And if diesel were a cure-all, we’d be seeing them already. It seems that Chrysler’s approach to the new CAFE standards are based more in desperation than any clear strategy. That impression is compounded by Chrysler’s talk of CNG drivetrains. Though the technology holds great promise for energy independence, and Fiat is Europe’s leader in CNG technology, Marchionne’s comments on the prospect of US-market CNG offerings are fairly equivocal:

The likelihood of that happening is uncertain, but I’m still hopeful that at least a sizable portion of the U.S. market will develop CNG capability. And we are ready

In short, Chrysler has no clear plan to become competitive in fuel economy, which I happen to believe is as important for ongoing commercial success as it is for meeting US CAFE standards. Chrysler may beat back some of its over-reliance on full-sized RWD cars and large pickups and SUVS by bringing more Fiat-based vehicles to market, but the projected impact of those models seems to be on the decline. Subcompact B-segment cars planned for Dodge and Chrysler have been canceled, as has a compact Chrysler, and the firm will be stuck with its not-wildly-efficient midsizers until 2014. Moreover, Chrysler is going to have to rebuild a reputation for smaller, more fuel-efficient vehicles at time when its domestic competition will be solidifying their new reps for quality small cars on the strength of products that are already on the marketplace (think Fiesta and Focus, Cruze and Sonic… to say nothing of Hyundai’s emerging dominance in this area).

In short, Chrysler is living proof that the auto bailout will not produce the promised “new generation of green cars.” And its emerging plan gives no reason to expect that to change anytime soon.

It’s a phenomenon with some precedent: import manufacturers will get nowhere with a certain bodystyle or drivetrain until one of the US domestic brands jumps on the bandwagon and popularizes it. And Jeff Breneman, executive director of the U.S. Coalition for Advanced Diesel Cars, is hoping the same dynamic plays out in the world of diesel power when Chevy brings its Cruze Diesel to the US. He tells WardsAuto

The fact that Chevy will offer a diesel Cruze in 2013 is huge. The gas-powered Cruze will get 40 mpg (5.9 L/100 km), so the diesel is expected to get 50 mpg-plus (4.7 L/100 km), and that will make it a game-changer.

Ford, Toyota or Honda haven’t got a diesel for the U.S. yet, but get ready for 2013-2014. That’s when we’re going to see a lot more diesels.

And, as the diesel booster-in-chief, it’s not surprising that Breneman would come to that conclusion. But what are folks inside GM saying about the Cruze diesel? In a recent interview with TTAC, senior advisor Bob Lutz suggested that we shouldn’t expect the Cruze diesel to conquer America or “change the game” all that much.

Our conversation had turned to emissions regulation, and Lutz had just mentioned that Europeans “cheerfully” pay the equivalent of nearly $40k for a Cruze LTZ with a diesel engine. Since he brought up the Cruze diesel, I asked if he had any insight into the decision to bring it to the US. He answered.

Yeah, it’s almost impossible. We’ll do some because we’ve got  them in Europe anyway, and we’ll make them compliant and GM will sell a few just to show that we’re part of the game. But I don’t think anyone sees much of a future for diesels in the states because our emissions regulations are six times tougher than Euro 5, and multiple times tougher than Euro 6, which nobody even knows how to do yet. The companies that are selling diesels in the United States, last time I checked which was over a year ago, are all operating on EPA deviations. So nobody meets even current diesel emissions standards. The EPA renews the deviations on an annual basis, but they’re not  supposed to renew for more than three years.

It’s just so tough. You need the urea tank and everything, and in order to do the post-combustion NoX reduction in the catalyst, you have to deviate fuel to the catalyst because every two minutes a burn takes place to fry all the oxides of nitrogen and particulates. Well, that reduces the diesel advantage. So now you’re talking $2,500 of hardware and a big urea tank, and instead of a 30% gain in fuel economy, you’re looking more like 18% or 20% and you’re using a fuel that costs 18-20% more per gallon than gasoline. You tell me how this makes sense.

I mean, it’s cool. Owners of Volkswagon diesels love to go around saying [affects a voice dripping with self-satisfaction] “I have a turbodiesel,” and everyone says “wow.” But Ford canceled their passenger car diesel program, they canceled their midsized SUV diesel program, we canceled ours, we canceled passenger car diesels for the US. We were at one point talking to Honda to see if we could collaborate jointly on, say, a two-liter diesel for passenger cars, and we both came to the conclusion that it wasn’t worth the trip. They were hopeful (and frankly so were we) that with all they know about engine and emissions that they would be able to somehow conquer this emissions conundrum… they gave up. So all the major producers gave up on diesels for the US.

Now, I don’t understand US and EU emissions regulations well enough to fact-check some of Lutz’s technical claims, but his deep pessimism can best be captured by his modest ambitions for the Cruze diesel. Lutz rarely misses an opportunity to praise a GM product, so his “we’ll sell a few just to show that we’re part of the game” line seems quite revealing. Unless things change fundamentally between now and its launch, I wouldn’t expect the Cruze diesel to blow the lid off the diesel market in the US.

In 2012, Toyota will take part in several races of the FIA World Endurance Championship, including the Le Mans 24 Hours, with a prototype “LMP1” car featuring a gasoline-electric hybrid powertrain.

Get Hyundai on board, and bring BMW’s new i brand into the mix, and the international racing business could be re-energized by the the competition to demonstrate the perfect compromise between performance, reliability and efficiency. As many of the top racing series see declines in viewers and manufacturer participation due to their increasing irrelevance to mass-market vehicles and brands, the golden age of endurance racing could just be dawning.

Dow Jones cites a report in Der Spiegel Magazine which claims that GM Vice Chairman for Corporate Strategy Steve Girsky

has made enquiries at BMW to start discussions on “far-reaching joint projects.”

According to Dow Jones, the Spiegel article does not cite any specific source for its information, and TTAC has not yet been able to find the original article online. According to Dow Jones, GM is

 primarily interesting in gasoline and diesel engines… General Motors is at an advanced stage in developing a fuel cell and could offer co-operation in that field… The technology behind GM’s Opel Ampera electric vehicle would also be of interest to BMW, according to the report.

GM has not yet responded to TTAC’s request for comment. A similar rumor was floated by Handelsblatt around this time last year, but BMW was quick to quash it. Are things different this time, or is GM still struggling with unrequited desire? We’ll let you know as soon as possible…

Its most powerful engine in the U.K. is the 1.6 liter, stop-start-equipped, Euro-5 compliant diesel with 105 HP and 213 ft-lbs … and that starts at £17,065 ($27,759 , in direct-conversion)… but there’s also a 2.0 oil-burner with 135 hp and 236 ft-lbs in the Fiat Professional quiver. Fiat Professional claims a 1,000 kg payload (about 2,200 lbs) and up to 1,450 kg (3,200 lbs) “load on rear axle,” so it’s no slouch. But between the vagaries of currency and efficiency (the 1.6 and 2.0 get 45.2 MPG and 42 MPG respectively on the European combined cycle, the latter being equivalent to the European Cruze 2.0 diesel MT), and the question of production siting, it’s difficult to put together a specific scenario for this coming to the US. But if it did, it would make even the most far-away CAFE standards look pretty mild (even though Chrysler’s once-questionable hybrid pickup drivetrain already does). On the other hand, it would also make the Ram Tradesman look like a screaming deal even though it offers “only” 1,860 lbs in maximum payload (it’s a much better towing machine). So don’t hold your breath… and if you need an efficient commercial vehicle in the meantime, well, there’s always the brand-new Caravan Cargo Van!

Slightly over 11 years ago, Jaguar set the car world’s heart a-flutter with the sleek, stunning F-Type concept. Shortly thereafter they said they’d build it, and relentless hype (including a totally unconvincing C&D “First Drive Review” featuring no actual driving impressions) followed. As the years dragged on, it soon became clear that Jaguar would not be building the achingly gorgeous sub-XK roadster (a decision that Robert Farago called “a shocking miscalculation“). But now, with mules already prowling the British countryside, a new baby Jag roadster concept is coming to the Frankfurt Auto Show… and Jaguar tells Autocar it will be a “precursor” to the coming production model. As a big fan of Ian Callum’s work, I’m sure it will look absolutely delicious… but if this somehow turns out to be another F-Type-style tease, Jaguar will be dead to me forever. [UPDATE: video preview after the jump]

With Chevrolet already offering a Cruze Eco, WardsAuto reports that the forthcoming Cruze diesel made a case for itself based on attributes that go beyond mere efficiency. Which is interesting because a GM source tells Wards that the Cruze diesel will get around 50 MPG on the freeway… and unlike the Eco, it will achieve that high number with an automatic transmission (the Cruze Eco’s 42 MPG highway rating is only for manual transmission models). Equally importantly, the oil-burning Cruze will return better performance alongside better efficiency, with 147 HP and 236 lb-ft, compared to the 1.4T engine’s 138 HP and 148 lb-ft, which would make it the performance model of the range… which some say is just what the Cruze needs.

Joseph Lescota, chair of the Automotive Marketing Management Dept. at Northwood University in Midland, MI, thinks a diesel Cruze will draw buyers.

“Chevrolet has a great price-point vehicle that has tremendous eye appeal and options but may not meet the performance needs of a select market group,” he tells Ward’s.

A diesel version would hit that group between the eyes by adding a sturdy engine, extra torque and top-end performance to the mix, he says.

GM executives meanwhile highlight the diesel option’s value as what GM North America boss Mark Reuss calls “a hedge against the unknown.” Only three percent of current US sales are of diesels, but as American brands start rolling the oil-burning options out, and as Americans are exposed to their higher performance and efficiency, that segment could just grow. After all, who doesn’t want more performance and more efficiency for a mere $1k-$4k premium?

Porsche was spared a major embarrassment – by the Chinese. According to an emailed memo, the boys in Zuffenhausen sold 10,722 vehicles worldwide in July, that’s 4 percent below the 11,169 units sold in July 2010. It could have been worse.

In Europe, Porsche sales were down a 38.3 percent in July. And who’s to blame? The Cayenne Diesel. It’s not that is sales had suddenly evaporated. In July 2010, the oil burning Cayenne racked up so many sales that Porsche now has a hard time beating that number. July would have been a disaster (percentage-wise) without the Chinese. They bought a whopping five times the number of Porsches sold in July last year. For the year, the Chinese bought 14,751 Porsches, twenty percent of the world total of 71,381 units sold so far. The Chinese are especially infatuated by the Cayenne, and China is Porsche’s second largest market. There is no info on the Diesel take rate in the Middle Kingdom.

Overall, Porsche is blasé about the July dip brought about by record Cayenne Diesel sales a year ago. With 71,381 units sold in the first seven months, Porsche is 72.6 percent ahead of the same period of last year.

Although the majority of German consumers continue to see EVs’ benefits in environmental and socioeconomic implications, broad adoption of EVs will remain low as long as current offerings don’t meet drivers’ practical usability and cost-saving requirements. To expand from early to mainstream EV adopters in Germany, automotive companies must focus on technology innovations, offer pricing strategies that are aligned with established premiums for diesel and hybrid powertrain options and develop diverse EV model mixes targeted at younger consumer segments that have higher EV interest levels than older demographics… E-mobility will become a viable addition to future transportation scenarios in Germany, but automotive companies and the German Government must address marketability requirements of EVs, prioritise technology investments and continue to promote cross-industry collaboration. Future mobility concepts will consist of diverse powertrain choices and business models that will leverage technology to satisfy consumers’ transportation needs while challenging traditional car ownership.

Tata’s Nano was launched with much fanfare in 2009, as the world’s cheapest car and a symbol of India’s automotive and economic aspirations. But first Tata had problems with its factory, which was to be built on land [allegedly] stolen from local farmers. Then, early last year, the cars started catching fire and refused to stop. Then finance was the issue, and when Tata revamped its finance, advertising and retail presence, it looked like things were beginning to improve. It turns out the bump was short-lived. After hitting 5k monthly sales last December, volume has fallen again dropping to 3,260 units in July (1/8th the volume of its main rival the Maruti Suzuki Alto) according to indiancarsbikes.in, which reckons

Startlingly, the most fuel efficient petrol car in the country, which is the most inexpensive too isn’t finding takers in a market troubled by high petrol prices and rising loan interest rates, that is clearly favoring cheaper and more fuel efficient cars… the market isn’t biting and the Nano sales have begun the downward spiral, this time continually.

So, what’s Tata going to fix to get its attempt at “India’s Model T” back off the ground. How about “everything”?

The crew at indiancarsbikes think they know what the Nano’s problem is:

a diesel engined Nano is the need of the day if Tata intends to reverse the Nano’s fortunes

A diesel engine is supposed to arrive by the end of this year, and could get up to 95 MPG (non-EPA)… although likely only with a CVT transmission that is also supposed to debut late this year. And sometime in 2012 a hybrid drivetrain could appear, although again, the Nano is already the most efficient car on the Indian market… it’s unlikely that more efficiency is the missing ingredient. In fact, if I had to guess, I’d say more standard equipment might be the key to improving sales.

But instead of upgrading the Nano’s equipment, a styling change could be coming, courtesy of Tata design boss (and designer of the new-look Jags) Ian Callum. Tata’s boss of Indian operations PM Telang was cagey about Tata receiving styling assistance from the Jaguar team, but  he admits

They (JLR) are part of the Tata family, so some idea exchange will always happen

So, what’s Telang’s solution? Not much.

Nano has a different clientele, people who perhaps never thought they could own a car. That’s why the decision making process is a little more complex as that’s a big step for them. It’s a very unconventional vehicle, so it’s taking some time in the market

Ultimately, it seems that, before radically altering the Nano, Tata will see if other markets take to it with more enthusiasm. Exports have begun to neighboring Sri Lanka and Nepal, and talks are under way with the Indonesian government about production for the South East Asian markets. And Telang says talks are underway with other Asian countries as well as Latin American countries about exports and eventually CKD assembly, telling the WSJ [sub]

Looking at the potential, we can think of importing the car first and later assembling it in those countries. At present we are considering many countries for assembling the Nano, but there is no timeline

Whereas the Model T caught the public’s attention nearly instantly, the Nano faces a lot more competition and very different world. Tata certainly thought that selling a cheap car in fast-growing  developing would be like printing money, but the reality turns out to be much more difficult.

After the apocalyptic warning from the industry about a proposed 56.2 MPG 2025 CAFE standard, the auto industry seems to be backing the White House’s latest proposal, which reduces the 2025 target to 54.5 MPG, slows the rate of efficiency improvement for trucks and increases advanced technology credit loopholes. Another key consideration: the White House agreed to a mid-term review of the 2025 standards to ensure they reflect the market. Plus, the DetN points to a previously unheard-of compromise to keep big trucks cheap:

The plan is also carving out special rules for “work trucks” — heavier light duty vehicles used for construction.

As a result of these compromises, the WSJ [sub] reports:

As of Wednesday, Toyota Motor Corp., General Motors Co., Ford Motor Co., Chrysler Group LLC, Honda Motor Co., Hyundai Motor Co., Nissan Motor Co., BMW AG and Volvo had told the administration they would support the plan

With the industry now largely on board, the Obama Administration has a green light to announce its new standard at a ceremony planned for tomorrow. But not everyone is happy with the new proposal…

Toyota and BMW were named as initial detractors of the compromise according to Bloomberg, but after expressing “concerns,” both are now on board with the plan. Daimler, meanwhile, whose Mercedes-Benz brand has been a leading payer of CAFE fines in the past is complaining that its

current understanding of the proposal raises some concern, and we’re continuing to review it

And what might be its problem?

An executive with a European auto maker said the plan is unlikely to motive auto makers to build vehicles capable of running on diesel fuel. Volkswagen AG, Daimler and BMW have heavily invested in advanced diesel engines, arguing that their fuel economy, especially on long journeys, is superior to that of hybrid vehicles.

“It’s clearly inequitable and favors manufacturers of full size trucks,” the executive said. “It could have an adverse effect on real world [gasoline] consumption by driving consumers to trucks.”

To favorable to trucks, not favorable enough to diesel… sounds like Volkswagen and Daimler are going to be the major holdouts here. And while Mercedes’ reputation as a longtime CAFE scofflaw hurts its credibility here, VW’s concern is more interesting: with a raft of new hybrids and EVs complimenting its market-leading diesel options and a goal of selling a million vehicles by 2018, you’d think VW would be heavily invested in the CAFE process. But the German automaker appears to not yet be on board with the plan, despite the following comment from VW of America President and CEO Jonathan Browning [via the DetN]:

We’re really focused on making sure whatever product comes out of those discussions is fair across the industry, is achievable. It should stretch us but it should make sure that’s deliverable in a way that produces the technological results that are still affordable to mainstream America

But the holdouts don’t have much hope of breaking up the new compromise, as their lobbying group, Global Automakers, has endorsed the new proposal. And though some speculate that California may not be satisfied with the agreement, there seems little chance of the state defecting despite the disappointing compromise. Especially because they have the opportunity to defect during the mid-term review:

In order to win the backing of the domestic automakers, the White House agreed to a review midway through the period, to ensure the new requirements are achievable, as well as granting credits that will make it easier for the companies to meet the revised standards.

The automakers pushed to get factors such as the rules’ impact on jobs and auto sales included in the midterm assessment. If the EPA and NHTSA determine that the final rules are too tough, California would be allowed to continue with higher requirements. And automakers will be able to seek a “judicial review.”

That, of course is the nightmare scenario: different standards in different states. The auto industry has argued again and again that any national standard would be better than any two (or more) state standards. But if the credit loopholes are too big and if overall fuel economy is not improved to the promised levels, an outcome that is definitely possible with the credit loophole, California could defect again, leaving the entire process back where it started.

For now though, the idea is to not think about that as tomorrow the industry and government will join hands in a symbolic kumbaya moment. The giant remaining questions: what specifically does the new plan call for, and will this coalition of the willing survive long-term? We’ll find out the answer to the first question tomorrow, but the second question should keep us stocked with years and years worth of drama and news.

An extravagant ceremony at Bangkok’s Impact Arena has seen the launch of Toyota’s new Hilux and Fortuner – key models in its developing market portfolio. The pair are products with big, tough reputations, and importantly, the profit-generating ability to match.

The Hilux has unrivalled street cred as one of the workhorses of Asia, Africa and Latin America – its reputation for rock-solid reliability goes hand-in-hand with the hard-working image Toyota has painstakingly built up over decades. The Fortuner is its mid-size SUV spin-off – a developing-world successor to the old Hilux Surf/4Runner [Ed: please note, the Fortuner is not related to the 4Runner]. A focus on giving the Fortuner an integrated form means it looks, feels and acts like an SUV, with customers thus more inclined to overlook its less-refined underpinnings and a cab that feels almost exactly like its pick-up sister. With Toyota charging a good sized premium for the Fortuner over a Hilux, churning them out means churning out profits.

The new models come at a sensitive time for the Japanese giant, which finds itself under pressure from all flanks. Mass recalls over the last couple of years have dented its reputation for safety and reliability, while March’s tsunami swept the rug from under its domestic base, with ensuing knock-on effects across the globe. Meanwhile, Hyundai and Kia are looking to do to Toyota what it did to the American domestics some thirty years ago, and the Chinese remain a distant menace on the horizon.

Toyota was the first manufacturer to establish a presence in Thailand, almost fifty years ago, and has dominated the industry since, currently sitting atop a 40 percent market share (the market share of Japanese brands in total is 90 percent). It is worth noting that Thailand is the world’s largest 1-ton pick-up market and the second-biggest for all sizes of these utilitarian vehicles. And naturally, the Hilux sits right at the top of the tree. Last year 165,000 units were sold in Thailand alone with its only serious challenger Isuzu’s D-Max, a little under 25,000 units adrift. (The third best-seller, Mitsubishi’s Triton, is the best of the also-rans, only just managing to break the 30,000 barrier.) Worldwide, the Hilux is sold on 113 countries, selling more than 2.3 million since 2004, when the current Hilux and its Fortuner offspring were released.

Predictably, the story of the new Hilux is one of evolution, with Toyota’s R&D operations in Japan, Thailand, Taiwan and Australia all pitching into the program. The Hilux has always had to be many things to many people, and with the new model an emphasis has been placed on tweaking the pick-up for different markets, with ‘one-size-fits-all’ no longer fitting the bill. Indeed, during the launch presentation, the slides made the point that in Thailand, the Hilux will rarely see a hill worthy of the name, while in Latin America it is forced to pound never-ending constant gradient inclines. In Thailand the Hilux is a daily driver – the supermarket car parks are full of its ubiquitous shape – while in South America, it is more likely to be a recreational toy. Sardonically, the slides noted a Thai propensity for ‘overload’, with a clutch of images that would not out of place in a typical ‘crazy loads’ PowerPoint email circular. And that’s without even getting onto ‘technicals’ – notwithstanding the impact of the Chinese in this segment, the Hilux remains the vehicle of choice amongst any self-respecting freedom fighter or terrorist with sufficient folding.

‘Radical’ an is not a word that immediately springs to mind when playing word association with ‘Toyota’ – ‘improving the box’ is, as ever, the name of the game. Cosmetically, the Hilux gets a new front clip, evolved from the design language of the outgoing model. Mr. Kaoru Hosokawa, Chief Engineer of Toyota, is in town for the launch, said that they have aimed for a “tough” and “modern” appearance, while the new headlights apparently imbue a “sporty” feel. The side-on changes seek a “more powerful” look and a sensation of “forward motion”, while at the rear, sharper, more fashionable tail lights are slotted in. In the cab it’s still a sea of hard plastics, but effort has been made with the detailing and there is a new instrument cluster. Half of all Hiluxes in Thailand are bought as private cars, so there has also been a focus on improving comfort. For this market, the new model gets softer springs, aimed at improving the ride.

Under the bonnet the powerplants and transmissions are essentially the same as before, the key innovation being the incorporation of Toyota’s “Diamond Tech” system. Not, in fact, a ’70s disco band, Diamond Tech denotes a new system that allows the 32-bit ECU to more precisely detect operating conditions within the injection system, improving fuel efficiency. New injectors feature a new “diamond-like” carbon coating that makes the process more efficient, as well as lengthening the life of the injectors and related combustion process components. The variable-geometry turbo also sees its relationship with the ECU improved, for a faster flow of more detailed information.

The Fortuner, meanwhile, arrived in 2004 and raised the low-cost SUV game significantly with a much more integrated SUV design language compared to the preceding 4Runner, which always retained a look of the ‘backyard conversion’ about it. Developed in large part by Toyota’s Thai operations, the Fortuner has piggybacked the success of the Hilux and is now built in a number of countries including India, Argentina and Indonesia, although outside Thailand its success has been mixed.

Over the last half-decade, the Fortuner’s customers have grown more affluent and the focus of the new model was to “reflect the higher standing of customers in society,” said Hosokawa. So ‘luxury’ is the keyword. The new front clip has a bigger (and curiously Chrysler-alike) chromed grille, sharper headlights and a Toyota ‘family’ feel, although observers at the launch felt some of the SUV macho-feel had been taken out of the front end. The side is visually beefed up with bigger wheelarch guards, while the rear view receives uber-‘fashionable’ chrome-effect tail-lights. According to Toyota, focus has also been placed on improving the car’s ride, handling and high-speed stability.

The new models have mark-ups of around USD$300-600 across the ranges. The entry-level Hilux, which is now dubbed the Hilux Vigo Champ, kicks off at $16,187 and rises through single, extended and double cab versions – as well as high/lower rider, 2WD/4WD and manual/auto combinations – to a range-topping $32,600. The Fortuner starts at $35,200 for the 2.5 2WD, rising to $49,493 for the 3.0 4WD.

Both models face tough competition. Ford and GM will start producing their new Ranger and Colorado respectively later this year, and both raise the bar, offering big, tough, attractively-styled and well-specified alternatives to the swathe of Japanese brands which currently dominate Asia. Tempting Thais out of the Hilux will be a big task, but this pair should start the ball rolling. At the other end of the food chain, meanwhile, the Chinese are building low-cost pickups, and finding a ready market amongst those shopping for basic, abuse-ready transportation.

The now well travelled Fortuner also faces plenty of competition in the mid-size SUV segment from cars such as the Mitsubishi Pajero Sport, Hyundai Santa Fe, Kia Sorento and Ford Everest. Although Toyota still dominates its market, especially in Thailand, where the low depreciation of the Toyota is a source of reassurance for buyers, time will tell if the new one is good enough to keep its manufacturer in front.

Cristiano Ronaldo is to be the face of the new Hilux in Thailand, an entirely appropriate choice in a country that is soccer crazy, injecting a bit of international glamour into Toyota’s staid image. However, the Real Madrid star won’t be endorsing the new pick-up in any of the other 112 markets it’s sold in, since, as Toyota honchos admitted, the multimillionaire was simply “too expensive”. Production capacity for both models will be raised in Thailand ahead of an expected spike in sales.

Edd Ellison is a Thailand-based auto journalist, covering the ASEAN markets and beyond. He can be contacted at edd@interfuture-media.com

As a relatively pragmatic person who generally chooses the imperfect-yet-achievable path rather than agonizing over the perfect-but-unattainable goal, this chart [from a fascinating Boston Consulting report, in PDF here]  frustrates me. I understand why Americans choose hybrid-electric cars as their most favored “green car” technology, but from their it gets fairly crazy. EVs are fantastic on paper, but in the real world they’re still far too expensive, their batteries degrade, they have limited range, oh and did I mention that they’re freaking expensive? Biofuels, America’s third-favorite “green” transportation technology can be fantastic in certain limited applications, but the ongoing ethanol boondoggle proves that it will never be a true “gasoline alternative.” Finally, at the bottom of the list, Americans grudgingly accept only relatively slight interest in the two most promising short-term technologies: diesel and CNG. Neither of these choices is radically more expensive than, say, a hybrid drivetrain and both are considerably less expensive and compromised than EVs at this point. So why are we so dismissive of them?

And here’s how deep the irony goes: America is, apparently, far more sensitive to lifetime costs, and is particularly concerned with upfront costs. So if 56% of Americans are not willing to pay any extra upfront for a “green car,” and only 38% are willing to pay more upfront if it pays off over time, why do 64% claim to be interested in EVs? After all, the battery-powered cars that are currently on the market cost considerably more upfront (on average) than comparable hybrids, diesels and CNG cars. Even the most hard-core EV fans admit that buying an electric car now makes no financial sense, and even hybrids must be driven a huge number of miles to pay off its upfront premium compared to a comparable gasoline or CNG car. American consumers had some of the highest “don’t understand” response rates across the board, but when you break down the data you can’t help wondering if there should have been a few more.

But don’t blame Americans. After all, we’re so well-protected from our energy externalities (a topic I covered recently when I called for a serious push to increase gas taxes), that we couldn’t possibly be expected to know or care about fuel-efficient technologies as our $8/gallon-paying bretheren across the pond and around the world. As this chart shows, the US government lags other developed nations and regions in its fuel economy standard… but even this isn’t the real story. After all, the current argument being made by automakers is that they will be forced to put more cost into future CAFE-compliant cars which consumers will not find worthwhile if gas prices don’t rise. Which brings us back to the real issue:

The problem, it seems, is that America still sees “fuel efficient” cars and “green” cars as being fundamentally different. Just look at the rise of high-priced cars that are green for the sake of being green, and offer no chance paying back their additional costs compared to comparable cars that are simply “fuel efficient.” Fisker’s Karma is “green,” while a 335d is “fuel efficient.” Chevy’s Volt is “green” but the Cruze Eco is merely “efficient.” Tesla’s Roadster is “green” but a Lotus Elise is amazingly efficient. I could go on, but the point should be fairly clear: because “green” has become such an aspirational marketing trope, and because we are still so insulated from the price motivation that drives nearly everyone else on earth to save fuel, we can’t even evaluate the “green car” options out there in a way that makes any sense. In my mind, this is a troubling sign of the market failure that comes from hidden externalities… and as a believer in market solutions, I hope American consumers can start looking at alternative drivetrains with more objectivity in the near future.

GM still won’t comment on the matter, but a recent rumor that the Cruze’s two-liter diesel engine will be federalized for the 2013 model-year has been confirmed to the AP [via the DetN] by “two people briefed on GM product plans.” That motor, designed by VM Motori and built since 2006 by GM-Daewoo, was recently updated to Euro 6 standards, and according to the Holden website, the Australian-spec version makes 160 HP (at 3,800 RPM) and 236 lb-ft (at 1,750 RPM), while returning 42 MPG (combined with manual transmission) or 35 MPG (combined, automatic). Of course those aren’t EPA numbers, and they could easily change by the time the engine is certified for US emissions standards.

With VW capacity-constrained in its ability to sell more diesels in the US market while enjoying take rates near 75% on the Jetta Sportwagon, GM clearly thinks there’s room to jump into the diesel game and offer efficiency that the AP says “would rival the the popular Toyota Prius gas-electric hybrid.” But will those numbers, and more importantly the VM’s notorious roughness (Australia’s The Motor Report notes “It’s pretty clattery from outside, and an old-school diesel rattle can be heard inside the cabin when accelerating”), be as attractive two years from now as a VW TDI is today? Just as importantly, does this herald the coming of the Cruze wagon as well?

What’s a Wingle? It’s Great Wall’s Chinese-made entry in the “World Pickup” segment, taking on Ford’s Global Ranger, Toyota’s HiLux, Nissan’s Navara, Mahindra’s Scorpio Pik-Up and more. Having been limited to sales in Iraq, Australia, Chile, South Africa, Algeria, Syria, Uruguay, Russia and Saudi Arabia, Automotive News [sub] reports that Great Wall has wangled the Wingle into the European market by establishing a beachhead in Italy with a 2.0 diesel version. Obligatory crash-test video after the jump…

Well, we’ve accidentally developed something a of a Chevy theme this morning, what with the Cobalt and 2013 Malibu… and now this, the Colorado Rally Concept, a first look at the next generation of GM compact pickups. Though the concept’s 2.8 liter turbodiesel engine is unlikely to make it to the US, Pickuptrucks.com reports

According to manufacturing documents we’ve obtained, the Colorado’s start of regular production is slated for Oct. 3, 2011, in Thailand and Jan. 16, 2012, in Brazil, where it will likely be sold as the S-10.

According to our sources, the code names for the Chevrolet Colorado and GMC Canyon versions for North America are 31XC and 31XG. Start of U.S. manufacturing is scheduled for around July 2014, though production of the current Colorado and Canyon are expected to end by 2012 at the plant in Shreveport, La.

Aimed directly at the global pickup segment defined by Toyota’s HiLux and Ford’s Global Ranger, the Colorado looks to be larger than the typical compact pickup and represents a fundamentally different strategy than Chrysler’s planned minivan-based “lifestyle pickup.” And don’t look now, but tough midsized trucks like this could be as much a replacement for current full-size buyers as gas prices and CAFE standards rise, as they could be true entry-level compacts. But then, we’ll need to see how much this global vehicle is modified for the US market before we really know what we’re getting here.