With new compact and subcompact models from Ford and GM enjoying respectable sales, the mainstream media has been indulging in some “feel-good” headlines, like the New York Times’s Detroit’s Rebound Is Built on Smaller Cars, or CBS’s more equivocal Can small cars rebound U.S. auto industry? It’s an understandable instinct, as the media has long battered Detroit’s inability to build competitive compact and subcompact cars, and in the post-bailout atmosphere of redemption, these headlines definitely help reassure Americans about the value of their “investment.” Unfortunately (if unsurprisingly), however, these pieces gloss over the full truth of the situation. Yes, Ford and GM are enjoying improved sales success with small cars. The “U.S. auto industry,” on the other hand, isn’t actually getting all that much out of the situation, beyond some fluffily positive press. Here’s why:

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We still have not heard from Saab and there have been six weeks without production. It eventually reaches a point when you have to make a decision

Johan Andersson of the Swedish unit of supplier giant Lear in the WSJ, on why his employers just laid off all 160 workers of its Trollhättan-based Saab workforce. Apparently Mr Andersson and Lear aren’t any more encouraged by Saab’s PangDa deal than TTAC. And considering that the Chinese dealer group is telling Gasgoo that “production has already restarted” at Saab, the fleeing suppliers who haven’t even heard from Saab yet create some credibility problems for the PangDa-Saab alliance (even if PangDa was referencing GM production of the 9-4X at Ramos Arizpe). Which makes the dire rumors that the deal has not, nor will be, blessed by the Chinese government a little more worrying. Sounds like the rotund lady is warming up her vocal cords…

Saab has received wire transfers of around €30m from both Gemini Investments and the Chinese dealer group PangDa, reports Aftonbladet, and it will be using that money to pay off its supplier debts which could use up most of that cash (Saab’s supplier debts are estimated by DI.se at between two hundred and four hundred million kroner, or as much as €44m). Leaving aside the issue of how that money was able to be transferred from China to Sweden in a matter of two days (more on that from Bertel here, the short version: the deal should need Chinese government approval), there are serious questions about Saab’s ability to restart production. After all, the €30m from Gemini is debt, while Saab owes PengDa for an undisclosed number of vehicles that it bought with its investment. Unless those cars are sitting somewhere waiting to be shipped, Saab will have to pay off its suppliers and then build the cars on what is essentially credit from PengDa. Meanwhile, that’s not the only demand on Saab’s finances and attention, as CEO Victor Muller is planning on taking a bonus of over half a million dollars, a decision that is creating fresh problems of its own.

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“This is the worst situation we’ve faced since the war,” a source close to Toyota told the Yomiuri Shimbun. The Japanese car industry is facing post-war-like shortages when it comes to auto parts. Toyota is short 150 parts positions, which can be anything from a bolt to a complete dashboard.

Dealerships are empty – of cars. Test drive cars do double duty as display vehicles. “We get a lot of customers coming in, but we don’t have cars to sell them,” a salesperson told the Tokyo paper. (Read More…)

TTAC has always taken pride in its outsider status, and we’ve taken pains to cover the industry from a safe distance in order to continually bring a fresh perspective to developments. As a result, we’re not always on the same page as trends in the industry at large, which tends to be far more given to wild optimism than the average TTAC analysis. But, based on a new study by Booz & Company [PDF], it seems that the “carpocalypse” of recent years has driven the industry to a more TTAC-esque pessimism. According to responses by executives at both OEMs and suppliers, the industry generally feels that the bailout was either a missed opportunity or it didn’t do enough to address fundamental weaknesses… and as a result, executives see challenges ahead.

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In a memo that surprises no-one that has followed TTAC’s extended coverage of the March 11 earthquake and tsunami, Toyota’s U.S. chief  Bob Carter warns dealers that deliveries of parts and cars could be severely restricted for months to come. “What we don’t know are vehicle production levels for May through July,” Bob Carter wrote in a memo. “The potential exists that supply of new vehicles could be significantly impacted this summer.” You have seen this coming. (Read More…)

Better get used to this: Barely had Toyota announced that it will reopen its Japanese plants, then Toyota U.S.A. chimes in and says: “We are shutting down.” Welcome to the supply chain gang. Toyota is running its N.A. vehicle plants on what they call “a reduced schedule.”

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When we worked on the Phaeton launch in 2001, we said it had “more computers than a small company.” It had 56. Today’s cars have anywhere between 30 and 100 computers on board. They are small microcontrollers that typically chat with each other via a CAN bus. You don’t take just any microcontroller for the job. They need to hold up to the harsh environment inside of a car. Their makers need to hold up to the harsh environment presented by the purchasing departments of automakers that squeeze them for every penny. As a result of both, there are only a few players in this field. This is the story of one of them. (Read More…)

The Japanese tsunami impacts everything, from cars to toilet paper. Most Japanese car makers were closed since after the catastrophe and will remain closed at least until mid April. Many paper mills are in the affected area, and all paper, from glossy stock to the softer kind, is in short supply. Publishers of Japanese illustrated pulp fiction have canceled the printed version and direct their readers to the Internet instead. Tokyo corporations battle a wave of toilet rolls vanishing from their restrooms, from where they find a way to the toire at home. While these may be temporary outages, the lack of stable electrical power emerges more and more as the biggest impediment to the recovery of the Japanese industry. It will affect you and your car, in one way or the other. (Read More…)

All told, it takes about 3 weeks for a shipborne container from Japan to reach its destination at the West Coast. To the East Coast, it’s about 5 weeks. With the Japanese earthquake and tsunami three weeks old, we should see the first real stateside disruptions by now. And we do. But not all originate in Japan. (Read More…)