Victor Muller could not save Saab.

Vladimir Antonov could not save Saab

Pang Qinghua could not save Saab.

Rachel Pang could not save Saab.

Now, Barack Obama is supposed to save Saab.

At least that’s how the Swedish metalworker union IF Metall sees it.
The union sent written a letter to president Barack Obama, urging him to use his good offices “to force former Saab owner General Motors to release the technology licenses for any potential buyer for Saab.” At least this is how The Local sees it.

The letter says:

“Our hope is that you will feel that Saab Automobile is worth being saved. We, more than 4,500 car workers in Sweden, look forward to your answer.”

Saab is in bankruptcy proceedings, and the receivers are evaluating bids. Saab is worth very little without the technology licenses held by GM, and, for that matter, without the brand held by defense contractor SAAB AB.

GM has been on record many times that it does not intend to license its technologies to any buyer of Saab in any shape or form.

Workers agreed to a four-year deal that freezes wages for two years, and that allows only moderate rises of around 3 percent for the following two years, Reuters heard from a source. The source also said:

“It’s almost certain that one of GM’s German plants will now be closed, probably the plant in Bochum.”

Currently, some Astra production is at Opel’s Rüsselsheim plant in Germany. Beginning in 2015, this will shift to Ellesmere Port. The Polish plant in Gliwice most likely will continue Astra production. It is expected that production of other cars will be shifted from Bochum to Rüsselsheim, with Bochum to be shuttered.

According to a GM statement, the Ellesmere Port plant will run three-shifts at full capacity. GM committed to a minimum of 160,000 vehicles to be produced each year. The company will invest £125 million into the facility and expects to create circa 700 new direct jobs. The agreement comes into force in 2013 and runs through the life of the next-generation Astra, into the early 2020s. Production of the new Astra will begin in 2015. This is also when the current contracts with European unions run out. Until then, all plants must stay open, and all workers must remain working.

Ellesmere Port had been on GM’s target list, but survived again. This also means a continuation revival of the British car industry, this time with a British brand on German cars. Lately, the island has been a preferred location for production by Asian manufacturers, such as Nissan, Toyota, and Tata. Britain now exports more cars than it imports for the first time since 1976.

Yesterday, we brought you the bad news about European auto sales in April. You are a gearhead, you don’t care about market share and percentiles, you care about cars! Here is how cars fared in Europe in April. Are you safely buckled-up?

It’s a carnage in Europe’s Top Ten, brought to you by JATO Dynamics. Forget about the EU market tanking by 6.9 percent. If your name is Martin Winterkorn and your bread and butter models were euro-trashed by the double digits, then your white hair will turn a little whiter.

The performance of Opel’s supposed volume models also is no reason for joy. Ford’s offerings hang in there with the overall market.

As we get into the summer months, this is likely to get worse. Keep those belts on.

Listening to the news from Europe, one thinks that there is chaos in the streets of Europe. Not yet. But Europeans are clearing room for chaos by buying fewer cars. 1,017,912 new passenger cars were registered in the EU, or 6.9 percent less than in the same month of 2011. Four months into the year, new registrations in the EU were 7.5 percent lower than a year earlier, the European manufacturers association ACEA reports.  

The UK (+3.3 percent) and Germany (+2.9 percent) were the only major markets to post growth. Sales in France contracted by 1.9 percent. Mediterranean Italy was down 18.0 percent, Spain 21.7 percent.

Not surprisingly, Greece was down-56 percent, Portugal  lost 41 percent. Surprisingly, people in Finland went on a partial buyers strike (- 64.5 percent.)

On the OEM front, Volkswagen shows the expected first symptoms of EU weakness. In Apri, the Volkswagen Group is down 5.8 percent in Europe. Many automakers, notably Renault, GM, and Fiat show double digit losses in April.  Losing less than others, VW gained further market share.

April was a mixed month for Volkswagen, and the bad most likely will get worse. The times of double-digit growth rates seem to be over for a while. Volkswagen sales in Europe appear to be down by 2.7 percent in April, with Western Europe (ex Germany) down nearly 10 percent. South America also took a 9.3 percent hit. The negative numbers are offset by strong deliveries in China, up 16.8 percent and the U.S., up 27.4 percent in April. With nearly half of VW’s sales in Europe, it takes a lot of pumping in other markets to keep the ship from taking on water. Even if Volkswagen goes into minus territory, it will be far from sinking.  Any hopes of becoming the number one automaker or even remaining in the number 2 position are quickly fading.
Now imagine how other European makers will perform that don’t have the global cushion Volkswagen has. Bad news for Opel, PSA, Fiat and Renault.

Volkswagen’s CEO warned its shareholders of a “very demanding year,” what with the European debt crisis depressing auto markets and growth in growth markets slowing. What is growing is risks, said Winterkorn at VW’s annual general meeting. Oddly enough, it is Volkswagen’s competitors who should be very worried.

U.S., South America and Russia helped VW increase group sales by 15 percent last year to a record 8.36 million cars. Volkswagen’s first quarter of 2012 broke another record with global sales increasing nearly 10 percent. In Europe, Volkswagen eked out a small gain in March, while competitors like PSA, Renault, GM and Fiat suffered double-digit losses.

Despite the warnings, Winterkorn did not lower expectations. Volkswagen wants to increase 2012 auto sales and revenue beyond 2011 results. Winterkorn restated the company’s goal to match last year’s record operating profit of 11.3 billion euros ($14.8 billion).

The total absorption of Porsche will have to wait some more. Volkswagen would have to pay about 1 billion euros in taxes if it would buy the remaining 50.1 percent of Porsche’s core car business before 2014. Buying Ducati for fun is one thing. Giving the money to the tax man is another.

One by one, German automakers – with the notable exception of Opel – are reporting unheard-of numbers. Let’s have a look.

Today, the Volkswagen Passenger Cars brand reported its strongest first quarter in recorded history. 1.36 million units were delivered globally in the quarter, an increase of 10.5 percent compared to the 1.23 million sold in Q1 of 2011. March brought a new delivery record of 536,600 units, up 14.6 percent compared to March 2011.

This and strong Audi sales (up 14.1 percent in March and 10.8 percent for the quarter) point to record group level data that should be announced before the week ends.

With 185.728 BMW, MINI and Rolls-Royce sold,  the BMW Group sold more vehicles in March than in any other month in its history, up 12 percent. The company also achieved a new high for the first three months: 425,528 units (prev. yr. 382,763 units), up11.2 percent compared with the first quarter of 2011.

Daimler had new sales records in every month of 2012. With 313,902 Mercedes-Benz passenger cars sold, the company set a new high for the first quarter. In March, sales rose by 11.0 percent to 131,334 units, recording the strongest sales month of the company’s history.

Opel is keeping its numbers under wraps, understandably, because they are depressing. In February, Opel’s sales in the EU27 were down nearly 14 percent. In March, Opel lost a painful 12.3 percent in a stable German market. (ACEA’s March data  for Europe are not yet available.)

What do the other German makers have that Opel does not have? They have strong sales abroad.  For all intents and purposes, Opel/Vauxhall have been kept out of  markets in other continents. It now is unable to make up losses at home with gains abroad. To make matters worse for Opel, Chevrolet is becoming aggressive in Europe. Chevy’s gains however cannot make up for Opel’s losses, not by a long shot: In the first two months of the year, Chevrolet gained 5,534 sales in Europe, whereas Opel lost 28,906.

Volkswagen, BMW, Daimler try to hold their position in a Europe in turmoil. At the same time, they use the relatively low Euro to aggressively increase sales abroad. Audi’s sales in China, which reportedly is on the brink of disaster, increased 37 percent last month to 31,505 units.

There are too many car manufacturers and way too many car manufacturing plants in Europe. Unless governments intervene, only the fittest will survive. With an overflowing war chest, Volkswagen, BMW, and Daimler definitely look much healthier than the rest. No wonder that they are dead set against government intervention.

PS: Funny number on the margin:  According to ACEA data, GM exported 73 cars from the US to Europe in the first two months of 2012, down 36.5 percent from 115 in January-February 2011.  In the same period, 464 imported GM cars were counted in Japan.  Using the logic of the anti-closed markets brigade, it should be high time to start a trade war. With Brussels.

GM’s new partner PSA increasingly reminds of pre-carmageddon Ford: Europe’s number 2 finds itself short on cash and way too long on capacity. Other than Ford that had mortgaged everything, PSA takes more radical steps. After putting is own headquarters building up for sale, PSA is ready to sign over parts of its Aulnay car plant to renters.

According to Reuters, PSA is looking for tenants for parts of its Almay factory north of Paris. PSA wants to turn another 17,000 square meters (183,000 square feet) into rental income.  It had already leased out 23,000 square meters of the factory.

With presidential electioneering in high gear, plant closures are a topic that is even more explosive than usual in France.  Union and government officials have received assurances that the plant will continue making the Citroen C3 subcompact – at least through 2014. The CGT union wants better assurances, “but management doesn’t want to commit itself to anything at all,” a union official complained on Friday

Before and after Saab had gone bankrupt, pipe-dreamers thought that the company can be revived with just a few million dollars. The number commonly used was $50 to $70 million. We maintained that it would cost a few billion dollars to get the company going again.

As it turns out, we were way too optimistic.

Saab’s unpaid bills are between SEK12-13 billion (USD1.8-2 billion) says the Wall-Street Journal. The number is based on information from the court-appointed receivers. A full accounting will be published on April 10.

The books must have been in a royal mess if it had taken until now to establish total debt with a ten percent variance.

It is no surprise that no buyer was found for Saab as a whole. The buyer would have shouldered the $2 billion in debt and would have needed another 2 billion at least to have a chance at viability.

Also on April 10 is the final deadline for bids for Saab assets. According to the Journal, “a handful of parties are interested in buying Saab Automobile’s facilities in Trollhättan, Sweden. All of them are interested in producing cars at the plant.”

It must be the grand plan to make Iran walk or ride mules, because the alliance between GM and PSA is not about reducing over-capacity. This is what PSA told just-auto today. Confessed a PSA spokeswoman:

“We do have some over-capacity in Europe – around 20% over-capacity. The alliance is not here to tackle this problem – each company will tackle this problem – GM and Opel/Vauxhall will deal with the problem on its side. Regarding plants, we say the life of a plant is linked to the life of products we make.”

That makes us sleep better, because we had been racking our brains to see how joining one company that is bursting with over-capacity to another company that is bursting with over-capacity will reduce over-capacity. Now we know: It won’t.

Pocket rocket lovers who happen to live in Belgium, France, Spain, or Switzerland,rejoice! According to Brazilian enthusiast site webmotors.com.br, Renault is using to good effect its Formula 1 presence and is launching the Renault Clio R.S. Red Bull Racing RB7 in  the aforementioned markets. Wow! What a mouthful for a compact car! And yes, you read right, Clio and Red Bull in the same name!

This very black Clio with some very yellow accent pieces is proudly equipped with a 2.0 engine, sporting a healthy herd of 203 ponies. This limited production Clio boasts 18’ wheels, race flag checkered roof sticker, digital AC, automatic headlights, hands-free card key, very yellow Recaro sport seats, along with other racy bits and pieces.

Jean-Maxime Boulanger, product manager of Renault Clio Sport, puts a very heavy spin on this launch by declaring (and I loosely translate):

“The Clio R.S. Red Bull Racing RB7 is similar to a race car with its radical look, including the most recent equipment developed by the pros at Renault Sport Technologies. Fast and furious, the limited series Renault Clio R.S. Red Bull Racing RB7 has as its main attraction its impacting design. It pays homage to the relationship between Renault Sport Technologies and Renault Sport F1, in partnership with the Red Bull Racing team.”

OK. Spin aside, what’s not to like? 200 hp in a small, relatively lightweight, agile car. Somehow I just know that Renault with its very heavy emphasis on Dacia cars for emerging markets will not release this baby monster in Brazil. But for those of you in those selected markets, you will get a chance to live out your Formula 1 fantasies in a compact car!

Red light racers, be prepared. You may just be surprised by a little black blob.

Opel’s supervisory board meeting ended with nothing. All the board, which consists of 50 percent labor and 50 percent of what is called “the equity side,” could agree on was that revenue, costs and margins are important. It’s good they have figured that out by now. Plant closures have been tabled. There is no sense in announcing them now anyway – plants cannot be closed before 2015.

It also must have dawned on some people that premature announcements of plant closures are bad psychologic warfare. You want your opponent doubting and hoping at the same time. So yesterday, after the meeting it was leaked that Opel’s plant in Eisenach might be sold. That’s what Reuters says, citing an article in Das Handelsblatt (which can’t be found in the on-line edition.) The Eisenach plant is fairly new. It was built 20 years ago after the wall had come down.  It also was expanded last year with a $252 million investment.

A little later, Opel told Reuters that “this speculation is without base and is wrong. There are no plans to sell the Eisenach plant.”

This will drag on for a long time. It won’t be good for Opel sales, and it won’t be good for the GM stock.

A year ago nearly to the day, I was investigating the connection between Libyan dictator Muammar Gaddafi and Fiat. With an American-led intervention in Libya underway, Reuters had reported that a Wikileaked State Department document revealed that the Libyan Government owned a two-percent stake in the automaker Fiat as recently as 2006. When I contacted Fiat’s international media relations department for comment, I received this response:

Dear Mr Niedermeyer,

Further to your email, I would mention that the Reuters report you refer to is incorrect. As too are other similar mentions that have appeared recently in the media concerning the LIA’s holdings in Fiat.

The LIA sold all of its 14% shareholding in Fiat SpA in 1986 – ten years after its initial stake was bought.  It no longer has a stake in Fiat SpA.

I trust that this clarifies the matter.

It didn’t, actually. In fact the matter remained as clear as mud to me until just now, when I saw Reuters’ report that Italian police have seized $1.46 billion worth of Gaddafi assets, including “stakes in… carmaker Fiat,” under orders from the International Criminal Court.

So, did Fiat lie? Not exactly. The Libya Arab Foreign Bank did sell back its shares in 1986, but the Wikileaked memo claimed that a successor entity, the Libyan Arab Foreign Investment Company, was the more recent Libyan investor. Not being well-versed in the structure and history of Libya’s sanction-avoiding foreign investment shell companies, and lacking the resources to effectively pursue the story (tracking Gaddafi-era investments is a chore), I left it there. And even now that Italian police confirm that a Gaddafi-controlled stake in Fiat has been seized, it’s not at all clear whether Fiat’s management was aware of this.

The AGI has the most detailed account, reporting

The Guardia di Finanza Corps of Rome has seized property worth more than 1.1 bln euro from members of the Ghaddafi family upon a warrant of the International Criminal Court of The Hague. The property seized includes real estate, company shares and bank accounts that belong to members of the Ghaddafi family or to people of Ghaddafi’s entourage with an overall value of more than 1.1 bln euro

Property investigations carried out by the GdF of Via dell’Olmata, in Rome have enabled to discover two financing companies through which leaders of the former Libyan regime had made investments in Italy. [emphasis added]

That covers Fiat management fairly well: at the very least, it appears that they didn’t know about Libyan investment until police were involved. I might suspect that this very Gaddafi stake in Fiat was frozen by Italian authorities prior to my request for comment, and Fiat’s representative misled me about it… but I have no way of proving it. Time will (hopefully) tell.

Meanwhile, on this side of the pond, it’s only a little strange that this wasn’t somehow brought to light in pre-bailout vetting of Fiat. Sure, a foreign enemy of the United States was a significant shareholder in the firm that was handed a bailed-out Chrysler for no cash down. On the other hand, Libya was not on the War On Terror radar at the time, and the auto task force had enough to worry about without investigating Fiat’s shareholders. All the same, chalk this up as yet another example of the unintended consequences of government intervention in the economy.

Finally, there’s the real question: did Gaddafi actually benefit from his Fiat investment? It all depends on when this second investment in Fiat shares took place. The Wikileaked memo says Libya owned two percent of Fiat as of 2006, which means it was enjoying the short-lived Marchionne boom (financed in part by General Motors) after years of decline and stagnation. And when things headed south in 2008, snagging Chrysler for nothing sent Fiat stock on its last real bounce… which means the Gaddafi regime did benefit to some extent from the auto bailout. Still, with Fiat’s shares pricing at all-time lows the Libyan dictator almost certainly lost money on his Fiat investment over the years. Unless the Guardia di Finanza find evidence that Fiat’s management knew about Libyan investment, this might well be a case of “no harm no foul.”

PSA and GM look at expanding their alliance. Unions are not sitting still either. Workers of  PSA and GM look at forming their own strategic alliance.

PSA and GM plan to intensify their alliance, PSA told Reuters. In addition to previously announced plans, the two may share larger vehicles, dual-clutch transmissions and a small car for emerging markets Peugeot says. Ominously, plans to assemble a new compact vehicle at Peugeot’s Madrid plant have been ditched. GM has not announced yet that the car will be built at one of its plants.

All this triggered a backlash at the unions. Labor leaders of Opel-Vauxhall and PSA will enter talks to form a strategic alliance, designed as a counterweight to plans by GM and PSA. Instead of playing workers against each other, PSA and GM could be faced by a united front.

“Spain is the one country where the competition will likely be the worst, since there are two PSA plants and one Opel plant that can be played off against one another,” Wolf Jaecklein of the European Metalworkers Federation (EMF) told Reuters. Jaecklein continued:

“The current strategy of both carmakers is to play their own respective plants off against one other. By creating this alliance, however, they can increase the size of the pitch and expand the competition to include all production sites. We therefore need to expand our approach beyond the individual companies and jointly defend against this tactic, that’s the key.”

Maybe they should seek advice from their union brothers at the UAW. On second thought, they might not. The union-busting strategy is said to be a brainchild of Stephen Girsky, UAW representative on GM’s board. Girsky has been dispatched to Europe as GM’s designated union-hitter.  Come to think of it, the UAW shouldn’t count too much on IG Metall support either.

You already have the bad news about February car sales in Europe. How did individual cars fare? JATO Dynamics provides us with a list of Europe’s Top Ten in February. With two exceptions, they are all down, some are way down. One exception creates great happiness in a suburb of Detroit.

As usual, Volkswagen’s Golf and Polo lead the list by wide margins. Like Volkswagen itself, Wolfsburg’s bestsellers lost only a little bit (compared to other losers,) thereby gaining market share. The strength of the Volkswagen Passat surprises for yet another month.

Ford’s Focus continues to amaze, achieving a 20.1 percent increase in a disastrous market. Its strength is particularly surprising as much of this sales growth comes from the declining market in France.

The French suffered double-digits losses of the Renault Clio and Peugeot 207. Opel’s bestsellers disappoint.

Now, it is beginning to hurt: The European new car market crashed in February. According to data released by the European manufacturers’ association ACEA, new car sales were down 9.7 percent in February. Two months into the year, car sales in the EU are down 8.3 percent from the same period a year earlier.

The harmless looking percentages hide the fact that this February was the worst of the millennium. Only 888,878 units changed hands in the EU27 in February, the lowest level since comparing months made sense (going back further is futile, the EU was much smaller then…) Even during carmageddon, Europe had not seen a February as bad as this one.

EU basket cases Greece and Portugal saw their new car sales nearly halved. These are relatively unimportant markets, by now, tiny Luxemburg has more car sales than Greece. If Greece would leave the EU, it would not even register in the car statistics. What hurts much more is the deterioration of the volume markets. France is down 20.2 percent, not boding well for PSA and Renault. Italy is down 18.9 percent, putting pressure on Fiat. Flat sales in Germany spared Europe a double digit tanking.

On the manufacturer front, the Volkswagen Group solidified its leadership. Its market share climbed 1.7 percent to 23.7 percent in February. PSA lost 1.1 percent, Renault lost 1.8 percent, Fiat lost 0.6 percent. These makers not only have maximum exposure to their home markets. They also are heavy in the troubled south of Europe and are weak in developing markets.

The GM Group is holding its own, losing only 0.4 percent of share. A 0.8 percent loss at Opel was buffered by a 0.4 percent gain in market share of Chevrolet. It looks like GM is busy propping up Chevrolet at the expense of Opel/Vauxhall. Two month into the year, Opel’s sales have dropped 20.3 percent, whereas Chevrolet has gained 22 percent.

Toyota and Nissan lose, Hyundai and Kia gain. Hyundai is now in spitting distance from Nissan, and not too far from Toyota.

Full data can be downloaded here as PDF and here as Excel spreadsheet.

For quite some time, Fiat-Chrysler CEO Sergio Marchionne has been busy lamenting the dreadful overcapacity in the European auto industry.  He’s doing I so much that slowly, people begin thinking that Marchionne is honestly concerned. “If I would be in his shoes, I would be concerned too,” said an audibly unconcerned European auto exec, who requested anonymity. My friend thinks that when Marchionne talks about the European car industry, he is talking about Fiat.

Now, Marchionne has a plan how to fix the chronic overcapacity at Fiat in Europe.

He wants government intervention.

A week ago in London, Marchionne said this:

 “Many other industry sectors have already been through a major consolidation and rationalization, such as the steel industry in the 1990s.”

Yesterday in Geneva, Marchionne said that the EU must forge a common solution to  fix the chronically oversupplied market:

“Europe needs to provide a unified, concerted road map to get this done. Look at what happened with the steel industries in the ‘90s, and copy that example.”

You need to be a student of recent European history to have and idea of what the oracle of Turin could be talking about. He is talking about a managed solution where everybody takes a haircut, and everybody stays alive. If he really takes steel as an example, then he is talking government aid and import restrictions.

In the beginning of the 90s, the European steel industry suffered from overcapacity. The industry was asked to shed capacity. At the same time, imports of steel were restricted. That did not work. In the second half of the 90s, a law was passed that made government aid legal as an emergency measure. Money was poured into the steel industry. At the same time, under the cover of anti-dumping measures, imports of steel to Europe was heavily restricted.

My anonymous friend opines that German automakers (except Opel, perhaps) are strictly against mandated capacity shedding. Their order books are full, and they are happy to take the market share of European makers in distress. Such as Fiat. As long as this continues, Marchionne can pound sand. As a student of recent European history, Marchionne is probably thinking of chapter two of the steel story: Government aid plus import restrictions.

Good luck with that. As long as the Germans are exporting themselves out of the crisis, Berlin won’t start a trade war, and has no reason to finance ailing carmakers. Pound sand, Sergio.

“Roughly, we’re looking at a number in the neighborhood of 20 percent of installed capacity that may be viewed in terms of being structurally redundant,” Marchionne said. I guess he wants (but does not dare) to say that every fifth car plant in Europe should be closed and its workers fired.

How does Marchionne want to do this? The American way:

“America fixed the problem in 2008 and 2009… Capacity has been taken out and the workforce has become incredibly flexible.”

In January, Fiat had been rumored to be flirting with PSA, now the French bride seems to be romanced by an American. Marchionne has helpful advice for the couple:

“It is key that the situation in Europe is addressed. If the potential Peugeot-GM tie-up becomes reality, I sincerely hope it deals with the overcapacity issue. It has to.”

Marchionne did not answer the question that is on everybody’s minds: How on earth would a Peugeot-GM tie-up address overcapacity?

Hear that chafing sound? It is analysts scratching their heads. They wonder why in the world would GM buy 7 percent of France’s PSA Peugeot Citroen. Bloomberg says this is about to happen. Neither GM nor PSA wants to confirm the deal. However, Bloomberg already has intricate details of the planned transaction, someone seems to be talking on deep dark background. Sounds like the odd couple is about to do it.

The question remains: Why? Analysts are hard pressed to come up with a logical reason for a tie-up. The biggest problem of both: Too many workers, too many factories, not enough sales. LMC Automotive in Oxford, UK, puts the capacity utilization of PSA’s European plants at 62 percent, and that of Opel at 74 percent. Traditional industry benchmarks require capacity utilization of better than 80 percent as a prerequisite of profitable production. An alliance between two ailing businesses does not produce a healthy one. Car consultant Maryann Keller told Bloomberg: “What in the world do you get by buying a tiny stake of a French company where you could never lay anybody off or close a factory?”

GM lost $747 million in Europe in 2011, where losing money has a great tradition for the General. It is GM’s 12^th annual loss in a row. So far, GM has lost $12.4 billion in Europe, and there is no end in sight.

PSA’s track record is less bleak. Europe’s second largest car company made money in 2010, lost money in 2009, made money in 2008. Recently, PSA has been engaged in a frenzied sell-off of assets. It looks like they are raising money in a hurry.

Both are looking at a Europe that is about to contract. PSA is heavily exposed to the troubled Mediterranean parts of Europe. Both have been hemorrhaging market share in Europe.

All kinds of reasons are being presented for the alliance that just won’t make sense: Diesel engines, light commercials, joint sourcing of parts. None of these create the desired slap the forehead effect. I guess we’ll get a convincing reason if the deal indeed goes ahead.

Any better ideas, Best & Brightest?

GM and PSA Peugeot Citroen have a mutual problem: Losses in Europe. Now, the two want to share the burden. General Motors and PSA are discussing a broad manufacturing alliance, if today’s media reports from Europe are to be believed.

PSA and GM?

Number 2 in Europe PSA had been looking for  a partner for years. The logical ally used to be Fiat. At the Detroit Motor Show, Fiat CEO Sergio Marchionne told Reuters that

“he would be willing, in principle, to be part of a consolidation that would create another car company in Europe rivaling Volkswagen AG in size.

“If you take two of the European players and put them together, you’re going to get the right answer,” Marchionne said.”

Using that math, the options are limited. Even if you add the largest European players, none of them would eclipse the European juggernaut VW. Fiat’s and PSA’s EU market shares, added together, would be 19.6 percent, not enough to out-do Volkswagen’s 23.9 percent share.

There is just one combination that comes a bit closer to the target, and that is PSA and GM. Their combined share would be 19.9 percent. Neither GM nor PSA are thinking of merging though.

The talks are about sharing vehicles and parts, and not about a capital tie-up, Reuters says.

In the meantime, analysts in Europe are scratching their heads and ask: Why?

Peugeot and GM’s Opel suffer from overcapacity in Europe, while facing painful restructuring and militant unions. Both agonize under too much exposure to a stagnant EU market. Which makes Credit Suisse analyst Erich Hauser wonder:

“We struggle to see how yet another ‘me-too’ cooperation with GM Europe on componentry will help address any of the fundamental issues.”

Toyota plans to more than double its exports to South Korea to 20,700 vehicles this year, says The Nikkei [sub]. The cars come from places that used to be import nations for Toyota: The U.S. and Europe. After announcing plans to export U.S.-built cars to South Korea, Toyota now is looking to bringing made-in-Europe cars back to Asia.

The strong yen has made Japan-assembled cars uncompetitive in South Korea, whereas the relatively soft Euro makes imports from Europe interesting Toyota Korea Chief Tommy H. Nakabayashi told the Nikkei today.

The deals received extra energy from South Korea’s free-trade agreements with Europe and the U.S. The agreements will eliminate tariff barriers between the signatories. Toyota is expected to bring small diesel sedans from Europe, where they sell well.

Auto blogging sites large and small are going gaga over Rinspeed’s announcement of a backpack. The Swiss tuner promises a rear extension for compact electric cars such as the smart fortwo EV. The extensions are modular. One is a motorized appendage that had been fueling the fantasy of EV enthusiasts for a while: If you want to go beyond the meager range of your EV, simply tow a trailer with a conventional engine. Voila, a docked range extender. Hence the name Dock+Go.

At the upcoming Geneva auto show, the Swiss trailer will be ready for inspection. It also can be used for other purposes, such as a ski transporter, a party pack, or for Pizza delivery. Latest when it comes to pizza delivery, a halfway decent auto writer should realize that not only are trailer being pulled, but also the legs of the press.You can deliver a bunch of pizza boxes on a bicycle, no need for a towed array of expensive technology.

Only Germany’s Autohaus, an industry rag that has seen everything, reminds its auto-dealing readers that “like other Rinspeed creations of the past, the concept suffers from minuscule chances of becoming reality.”

Old Geneva hands know that Rinspeed is known for whacko concepts that will never make it into production, but that always are good for headlines written by gullible editors. Did Rinspeed’s underwater car of 2008 ever go into series? Or the car that senses you mood?

Volkswagen keeps dominating Europe’s Top Ten list (as compiled by Jato) in January.  An 11.3 percent decrease of the Polo did not cost it its number two place, thanks to the number three Ford Fiesta dropping even more.

Passat sales remain strong, a very strong Octavia enters the Top Ten for the first time.

Jato hopes that Fiat’s new Panda and Peugeot’s 208 will shake up the Top Ten further in the year.

Analysts predicted a down year for the European new car market, and the market complied. 968,769 cars changed hands in the EU, down 7.1 percent from January 2011. This according to data released today by the manufacturers association ACEA.

Amongst the volume markets, France (-20.7 percent) and Italy (-16.9 percent) were badly mauled. The German (-0.4 percent) and British (-0.0 percent) markets remained stable.

Automakers report concomitant effects. Volkswagen gained a full 1.8 percent of market share by increasing sales 0.7 percent in a down market. Makers with more exposure to the southern parts of Europe sustained gaping wounds. PSA, down 14.9 percent, lost 1.1 points of share. Renault, down a whopping 25.2 percent, lost a full 2 points of share. Fiat, down 16.2 percent, lost 0.8 points of share.

Ford, down 4.3 percent, increased market share by 0.2 points.  GM is less lucky. On a group level, GM  Europe is down 14.2 percent for a loss of 0.6 percent of share. This covers the fact that Opel lost a full percent of share, whereas Chevrolet gained 0.4 percent of share.

Full data can be retrieved here as PDF, and here as Excel spreadsheet.

When GM will announce 4^th quarter and year-end earnings tomorrow, a lot of fingers will be pointed at Opel, and on GM CEO Dan Akerson who decided to keep the hemorrhaging unit instead of selling it off to Magna and the Russians. Bloomberg expects that tomorrow’s quarterly profit will be “GM’s lowest since it emerged from bankruptcy in 2009,” despite record sales in the U.S. and China. According to Bloomberg,

“The darkest cloud on GM’s horizon is Opel, the biggest contributor to GM’s $14.7 billion in European operating losses since 1999.”

Adam Jonas, an analyst at Morgan Stanley Jonas, estimates the value of GM’s European operations at a negative $8 billion. The automaker’s China business would be worth $10 billion, he said.

“The negative value of GM Europe is almost as big as the positive value of GM China,” Jonas said.

GM shareholders will demand action to cut German losses, but unions in Germany point to the contracts with GM that rule out further plant closures and layoffs.