The heads of the European automobile industry are assembling in London for their annual European Automobile Manufacturers’ Association meeting. While they were there, they dropped in with UK’s Prime Minister David Cameron to talk a little politics. Norbert Reithofer of BMW, Sergio Marchionne of Fiat, Carlos Ghosn of Renault, Nick Reilly of GM Europe and their leader Dieter Zetsche, president of the association and chief of Daimler, asked for assistance with fair free trade with major economies such as India and Japan, government support for the swift introduction of breakthrough technologies and less bureaucracy through lean regulations. All noble goals. But the BBC found a fly in the ointment:

Bloomberg reports:

Renault SA Chief Executive Officer Carlos Ghosn agreed to make development of upscale cars for French factories a “priority” as the government steps up its influence in the wake of a botched spy investigation.

Renault, based in Boulogne-Billancourt near Paris, named Carlos Tavares as Ghosn’s deputy late yesterday. The French state, the carmaker’s biggest shareholder with a 15 percent stake, made support for the appointment conditional on strategy changes, including taking a stronger lead in its alliance with Nissan Motor Co., people familiar with the situation said.

“If it’s this hard just to get your man in place, it suggests we’ll see more, rather than less, government influence going forward,” London-based Credit Suisse analyst Erich Hauser said. France is a “relatively small shareholder with a disproportionate say over strategy, which has to be a concern for other investors.”

…Ghosn said he intends to be “more present in France from now on,” in an interview published today in French daily Le Parisien and confirmed by Renault.

In the face of such ( continued) humiliation at the hands of a minority government partner, one has to admit that America’s auto bailout has been an relatively hands-off affair. Context is important after all (although to be perfectly fair, Renault did embarrass the French government with that “spy scandal”). Besides, it sounds like the brave French pols are simply out to avenge the sad death of the Vel Satis, so hey, at least the French might get the epically weird luxury sedan to end all epically weird luxury sedans out of the deal.

Sometimes honesty is the best policy…

Ever since Patrick Pelata took the fall at Renault after the botched spy scandal, the position of COO and deputy of Carlos Ghosn had been vacant. Now, there are strong indications from Paris that the job will go to Carlos Tavares, currently chief of Nissan’s Americas unit.

Further on today’s results conference at Nissan, I could regale (or most likely bore) you with what you will hear from just about any Japanese carmaker, and possibly from non-Japanese carmakers as well: Last year was a good year, the March 11 tsunami makes this year a challenging year, but what will not kill us makes us stronger, and in ancient China, crisis and opportunity were one and the same.

Now this is Nissan and Carlos Ghosn who has bet a farm in France and one in Japan on the future of the electric car. Ghosn made a few points today that are well worth noting. He talked about nukes, CO2, blackouts – and batteries.

It seems that my recent article on Citroën’s anti-retro retro-inspired car, the DS3, provoked two kinds of reactions: admiration and understanding, but also rejection and some even thought Citroën was simply being cynical in its use of the much storied DS moniker. What was hinted at with the DS3 becomes much more evident in the DS4’s case. With it Citroën may well have stumbled on a modern classic, not to mention a way forward for retro-inspired cars.

Au contraire to VW’s New Beetle, BMW’s Mini, Chrysler’s Pt Cruiser and Fiat’s Cincuecento, Citroën is reviving the fabled DS name as a marque, one that intends to impress on consumers a very Gallic flair for sophistication and elegance. With the launch of the DS3, Citroën is showing a new direction for retro-inspired cars. One that points to the future, while keeping a link to the past of luxury of one of the most intriguing and desirable models in the history of all cars, the DS. Produced in the 60s and 70s, the DS impressed everyone with its different kind of beauty and many a mechanical innovation. Now, it can impress again.

Nobody who knows the business a little thinks the consequences the March 11 earthquake and tsunami will be isolated to Toyota and a little Honda. Renault is joined both at the top and at the hip with Nissan. Renault warned today that its French operation could be affected – albeit in a roundabout way.

Many equate China with smoke and soot belching cars. In reality, China’s emission and fuel consumption standards now generally follow the European roadmap. Implementation of standards trails the European role model by only a few years. Ironically, it is a European brand that just ran afoul of this misperception – if Chinese media is correctly informed.

The extraordinary board meeting at Renault has ended. The spy scandal most likely has also ended. CEO Carlos Ghosn remains firmly in charge. Below him, one of the largest revirements in the peacetime of a car company. This is what TTAC has developed from sources in Paris:

Renault has scheduled an extraordinary board meeting for today, Monday, French media reports. The meeting will deal with the spy scandal that turned out to be a fraud. On Sunday, France’s Journal Du Dimanche speculated that the heads of COO Patrick Pelata, legal affairs chief Christian Husson, HR chief Jean-Yves Coudriou and security chief Remi Pagnie could be on the block after they were implicated in a letter from jail, written by Dominique Gevrey. The investigator had been hired by Renault, and was subsequently arrested on suspicions of fraud.

Caution: This Nikkei story has been debunked by Nissan.

Often considered, more than often denied, now it’s on the table again: Nissan and Renault, having lived in an open relationship with a joint CEO since 1999, could move under the umbrella of a common holding company. Joint CEO Carlos Ghosn told that to The Nikkei [sub] late Wednesday night in Yokohama. The managements of Nissan and Renault seem convinced that this is the way to go. However, there is a lot of work to be done before the wedding will become official.

Renault has had quite a bit of success in recent years with its budget-brand Dacia, prompting Peugeot-Citroen to reach back into its bag of abandoned brands for a name to put behind its own low-cost car offerings. Having briefly considered the Talbot name, it seems that PSA has settled on something a little more modern and relevant to low-cost offerings: Simca. Which makes quite a bit of sense, if you think about it. Rather than naming a budget brand after the makers of hugely expensive pre-WWII luxury cars (a trick Chrysler tried once already with the Horizon), PSA can reference one of the most influential (if forgotten) small-car brands. At least, it can if it deals with that most modern of problems, the patent troll. AutoBild reports

Joachim W. “Simca” signed in September 2007 at the German Patent and Trademark Office as a trademark for the class “cars”. Then a cancellation request was made ​​- probably by Peugeot. The French made at least one attempt to register Simca on 2 June 2008, whereupon Joachim W. submitted an application for cancellation.

It’s not clear what claim Mr Simca might have on the name, as SIMCA stands for Société Industrielle de Mécanique et Carrosserie Automobile.

The French government has its hands full pounding Gadaffi’s tanks and artillery pieces into pulp. At the same time, the French government decided not to destabilize carmaker Renault. French Industry Minister Eric Besson said the latter part when he was asked whether he’s calling for Carlos Ghosn’s head after the espionage scandal had turned into a farce.

“As industry minister, I hear the voice of the people asking for punishment, but the industry minister’s greater concern at this time is not to destabilize Renault any further,” Besson told RFI radio ( via Reuters) in an interview.

It appears that the Renault EV espionage case crazy train has rolled to a halt, as the FT reports that CEO Carlos Ghosn and his right-hand-man Patrick Pélata have apologized to the three executives they accused of spying. According to a Renault press release,

Mr Ghosn and Mr Pélata now plan to meet the executives, promising compensation for “serious prejudice” to their reputations and careers

And according to BusinessWeek, Mr Pélata will likely be offering his resignation today, as

Renault called an emergency board meeting for 4 p.m. local time that may lead to sanctions against managers involved in the case, two people familiar with the matter said. Prosecutors yesterday issued “organized fraud” charges against Dominique Gevrey, the security chief whose internal investigation led to the firing of upstream development chief Michel Balthazard and two other executives.

But, as AN [sub]’s James Treece puts it, Pélata likely won’t stay unemployed for long, as being fired for loyalty is almost a positive in the super-competitive world of high-level auto executives. The mystery now: did Mr Gevrey simply attempt to defraud Renault, or was he part of a coordinated effort to destabilize the French automaker? Gevrey won’t reveal the source of his information about espionage inside Renault, but we may yet learn more about this strange farce if he cracks under investigation.

[UPDATE via AN [sub]: Ghosn and Pélata plan to give up their 2010 bonuses and profits from 2011 stock options after they had to apologize publicly to the three men earlier on Monday, Renault said in a statement.]

The Renault spy farce has taken yet another, this time totally unexpected twist. Presumptive spy catchers at Renault are behind bars. Renault’s security managers Marc Tixador and Dominique Gevrey are being held for questioning at the offices of France’s DCRI domestic intelligence agency which is investigating the matter, a spokeswoman for the Paris prosecutor told Reuters.

Ever since the Renault spy story broke, we had our doubts. It simply did not pass the smell test. Now, the smelly stuff is hitting the fan. “France faced severe political embarrassment on Friday after carmaker Renault said the three top executives it sacked for industrial espionage in January might not be spies after all,” reports Reuters.

In an interview with Le Figaro, Renault COO Patrick Pelata, the man who was the driving force behind the scandal admitted: “A number of elements lead us to doubt.” He is not alone in his doubts.

France’s PSA wants to get more expensive and cheaper at the same time. PSA plans to up-position their Peugeot and Citroen plans. Probably envious of Renaults success with their Dacia brand, PSA wants to create a completely new low-cost brand, says Automobilwoche [sub].

Now we know why Reuters became confused about Daimler and Renault: It’s those other French forging a bloody alliance with those other Germans as well!

Developing a new car with traditional technology costs an arm and a leg. Add future technology, and you are starting to talk real money. You need to spread the R&D costs across a lot of cars. The trouble is, massive sales of EVs are still just a dream. What to do in such a dicey situation? You look for partners. Renault and Daimler hammered out a new agreement. “Renault will supply the electric motors for the Smart and Twingo, we develop and make the batteries for both models,” Daimler’s head of research and development Thomas Weber told his hometown paper Stuttgarter Zeitung in an interview that will appear today in the print edition.

While some analysts (who might be sitting on large quantities of GM and Ford stock ) already dream of a sales rate between 15 and 16 million cars by year’s end in the U.S., CEOs of European carmakers are less gung ho.

Developing new cars costs a good deal of money. Developing new power trains costs a huge pile of money with unsure payback. So what do you do when you are on the bottom rungs of the Top Ten, or god forbid if you traipse around somewhere in the twenties and if you have neither the money to invest nor the volume to quickly amortize your investment? You find friends to share the burden. This is what PSA and BMW do.

The alleged Renault spy case is getting curiouser and curiouser. Renault is in full reverse. Renault CEO Patrick Pelata said information may have been leaked about the costs and economic model of the program, but all technical secrets are safe. “Not the smallest nugget of technical or strategic information on the innovation plan has filtered out of the enterprise.” So what, they are missing a spreadsheet?

We don’t know who gave which state secrets to whom at Renault. But now we know what everybody already suspected: “The Elysee has charged the DCRI (intelligence services) with an investigation. It is following a Chinese lead,” a French government source told Reuters.

If they find a smoking gun in China, then it’s war: Yesterday, France’s industry minister Eric Besson called the scandal “economic warfare.”

Reuters doesn’t know more, but found some highly suspicious activity:

France’s industry minister Eric Besson lashed out at those who may have attempted to steal EV secrets from the French automaker Renault using the language of international relations rather than economics. He tells RTL Radio [via Automotive News Europe [sub]]All I can tell you is that the matter seems serious, that it illustrates once again the risks our companies face in terms of industrial espionage, and economic intelligence, as we call it today. It is an overall risk for French industry. The expression ‘economic warfare’, sometimes extreme, is appropriate and this is something we should monitor in future.
To which ANE helpfully addsFrance has for some years been worried about potential attacks on its industrial secrets and even has a “school of economic warfare” aimed at rooting out economic subversion.But who is behind the alleged “economic warfare”? China is the obvious scapegoat in internet speculation, but thus far there is no proven connection between Renault’s suspended executives and any foreign company or country. The highest-ranking of the suspended execs, Michel Balthazard, was born and educated in France, and has been at Renault since 1980. And, according to French media reports, this may have less to do with foreign attackers than in-house rivalries…

PSA Peugeot-Citroen is feeling its oats again. PSA “remains open to equity alliances with other partner companies in its sector,” PSA CEO Philippe Varin told the Dow Jones newswire. Well, after recent mass weddings that had produced mixed nuptials between Volkswagen and Suzuki, Fiat and Chrysler, and even Renault-Nissan- Daimler threesomes, PSA is looking for a tie-up again. The trouble is: There aren’t many attractive partners left match.com of the international auto business.

Automotive News [sub] reports that three Renault executives, including one who works for the automaker’s electric vehicle development program, have been suspended without pay pending an industrial espionage investigation. According to a Renault source

[The investigation] involves people who were caught red-handed for industrial espionage. Renault is a victim in this story. The group is a bit worried about its electric vehicle program — it hopes that its leadership in this technology won’t be threatened.

The ritual torching of cars has become a New Year’s tradition in France. Last New Year ’s Eve, 1,137 cars went up in flames in France, a tad less than the 1,147 set ablaze the year before. This year? We’ll never know.

The AP [via The Freep] reports:

Denis Baupin, an environmental official in the mayor’s office, said Wednesday that sport utility vehicles and old diesel cars are likely to be targeted in upcoming test restrictions.

To any Parisian who drives an SUV, Baupin’s advice is: “Sell it and buy a vehicle that’s compatible with city life.

“I’m sorry, but having a sport utility vehicle in a city makes no sense,”

Five French cities are eying bans on inefficient classes of automobiles as they become “ZAPA”s, or Priority Zones for Action against Air Pollution. These areas include Paris, Lyon, Grenoble and Aix-en-Provence. France’s cities are some of the most congested and polluted in Europe, and older diesels as well as 4×4 vehicles are blamed for a disproportionate contribution to the problem. We simply hope that vintage Mustangs don’t get caught up in the Parisian guzzler ban.

The French parliament has taken a step toward significantly reducing the non-monetary penalties that accompany most speeding tickets. The National Assembly voted Thursday to diminish the amount of time that minor traffic violations affect a driver’s record, and consequently his insurance rates. The changes came in the form of a compromise amendment to a wide-ranging homeland security bill known by the acronym LOPSSI II.

Global alliances between humongous corporate entities are always intimidating and mostly ill-performing. Oftentimes they just don’t work (née Daimler-Chrysler). Other times we just don’t see the point (Ford and various ex-PAG members or GM-Saab). The Renault-Nissan Alliance, who-would-have-believed-it is maybe, just maybe, the most successful of the lot. As TTAC itself has reported earlier, the French car known as the Nissan Tiida is now America’s best-selling compact car. In Brazil, Nissan has just sprinkled some of its Nippo-fairy-wand-dust on Renault’s latest gambit in the relatively small, but very profitable executive level segment in Brazil.

Now, let’s clarify a bit.

Peugeot has been all downhill recently in Brazil. Despite a relatively good showing in the São Paulo Car Show, its Brazilians offerings have been nothing to write home about. Having carved out a solid sixth place slot in sales (and sometimes threatening Renault’s fifth place) when it first got to Brazil, it has been recently surpassed by the likes of Toyota, Honda and even Hyundai. However, with the all-new (for Brazil) 3008, which was launched in Europe in 2009, Peugeot is asking its Brazilians customers: Are you ready to give up your false-jeep pretensions and give a more minivan-looking crossover a chance?

Full Disclosure: I hate “The Simpsons” and I hate Renault cars. So this article is going to have me seething.

In the car world, the BRIC countries have already got their institutional market leaders. That’s how quick these markets are moving. General Motors and Volkswagen have an iron grip on the Chinese market, Suzuki and Hyundai have India in their palms. Fiat is king in Brazil. But Russia is still anybody’s game. Well, Renault and Nissan want to change that.

Whilst doing my usual scan of today’s news I saw an article which made me do a double take. And I mean a proper “Whaaaaaaaaat?!” I saw a couple of interesting things in it, I couldn’t believe my eyes. Then I saw who published it. The Tehran Times. So, treat this story with a pinch of salt.

We are being reminded that one of the few things that still are common to the U.S. and the UK are their legal system, conveniently called the “common law.” British barristers are looking to American attorneys for new ideas. And here is one of them: If an obese driver dies in a car accident, it’s not her fault. It’s the fault of the manufacturer, who didn’t crash test with overweight crash test dummies.

A few months ago I reported how Renault was planning on pulling out of IBC Vehicles (a joint venture between Nissan, General Motors and Renault) so they could take production of their Renault Trafic van to their underutilized plant in Sandouville, France. This would have left IBC Vehicles in trouble as valuable volume would have left the plant in a precarious position. Well, it seems IBC Vehicles can now afford to say “Au Revoir” to Renault.

When Renault, Nissan and Daimler all tied up together many people thought this was just a symbolic gesture. The venture may help each other out in designs and joint ventures, but personally, I didn’t see anything of real substance happening from it. Well, it seems that Nissan and Daimler are taking this cross holding seriously. Very seriously.

With sanctions piling up against Iran because of their nuclear ambitions, Iran is getting more and more isolated on the world stage. They need to assert their authority and let the world know they won’t be pushed around. And they may have found a way of doing it according to the Iranian Student’s News Agency (ISNA).

Mitsubishi started production of the European-spec model of its i-MiEV electric vehicle Wednesday to maintain its lead over rivals in a non-existing market segment expected to grow rapidly. At the same time, Mitsu started production of the iOn, which is an i-MiEV, rebadged for PSA Peugeot Citroen.

According to The Nikkei [sub], the iOn needed “changes from the Japanese version to meet European safety standards.” Let’s hope that the Euro-spec i-MiEV received the same changes, otherwise it will be DOA.

When Renault released their second generation Megane, people’s reaction pretty revolved around three words. “Whisky”, “Tango” and “Foxtrot”, if you know what I mean. I remember when I first saw it my first thoughts were “My goodness! It looks like someone’s made a massive dent in the back with a cricket bat.” But what did I know? It was voted European Car of the Year in 2003, was the first small family car to achieve a 5 star Euro NCAP rating, and went on to become a sales success. Now let’s look at Renault’s partner, Nissan. When the Juke came out, the reaction was pretty much the same to the Renault Megane. “What in the name of all that is holy is that?!” And now. the Renault-Nissan alliance has done it again.

A friend of mine once tried to break the world record for the longest time standing on one foot. The record (at the time) was held by Arulanantham Suresh Joachim of Sri Lanka for standing on one foot for 76 hours and 40 minutes. My friend lasted 2 minutes, then collapsed in heap and wondered if he’d maybe broken a bone in his leg. Silly boy. If he wanted to get into the Guinness Book of World Records, all he had to do was buy a Volkswagen Passat.

Take a look at the above picture and have a think about what’s wrong with it? Answer after the jump.

PSA Peugeot, and their joint venture with China’s Dongfeng, are planning to export cars made in China to Russia, said Gregoire Olivier, Peugeot-Citroen’s recently appointed head of Asian operations, to The Beijing News via Gasgoo.

PSA wants to sell cars made at the Chinese JV in other regions of Asia and Russia as early as next year, said Olivier. The only thing that’s keeping them from doing it right now is the lack of a logistics platform. But they are building that in Shanghai as we speak, and it should be up and running next year.

Because Olivier was recently appointed, he may have missed various memos, and will be forgiven. Here a quick update:

It’s no secret that I’m a bit doubtful about the runaway success of the all-electric vehicle. The infrastructure obstacles are just too great. There is one market where plug-ins make sense: Light delivery vehicles. Never cruise too far from the warehouse. Can be charged while van is being loaded. Lots of regenerative braking. Mitsubishi and PSA think the same. They will co-develop a compact commercial electric vehicle for the European market. Production will begin by 2012, says The Nikkei [sub].

It used to be that joint ventures with Chinese manufacturers were strictly for Chinese consumption. The Chinese would like nothing more than to expand to other markets with their foreign branded products. Strict joint venture contracts typically forbid just that. Sure, sometimes there are some small scale exportation tests. But usually, what is made in China, stays in China. Contracts can be changed or amended. More and more Chinese automakers seek to expand their relationship with joint venturers beyond China’s borders.

Once upon a time, the Maximum one declared that bringing diesels to the United States would only be possible by the use of urea. You know, the stuff that is is the main nitrogen-containing substance in the urine of mammals. Which can also reduce the NOx from diesel exhaust. Using urea would allow diesels to meet Tier II Bin 5 standards. The Maximum one further decreed that the extra cost of this after treatment system would make diesels prohibitively expensive. (Unless the driver uses man-made urea, but let’s not even go there.) Then, he mentioned the California standards which were way tougher than Tier II Bin 5. This would effectively kill diesels in the US as they wouldn’t be 50 state compliant. Then Volkswagen introduced the TDI Jetta which was 50 state compliant. What made this extra special was that Volkswagen did it without using any urea after treatment. Something which Bob Lutz said wasn’t possible. There was a diesel hurdle that was gone. Who else could be bringing diesels to the United States?

Autocar reports that Renault workers in France are jumping on a bus and heading to the Paris Motor Show. Are the doing it because they fancy a day out? Maybe they want to see all the nice cars on display? Nope, they’re going there to protest. OK, so who do you think they are going to protest? Hyundai? Toyota? Ford? Nope. They’re protesting against Renault. So, a bunch of French Renault workers are going to the Paris Motor Show to protest against their own company? Why?

Yesterday, I wrote about how GM had beaten the French and made them concede benefits in return for job security. Well, it seems that the French got their own back on GM in a round about sort of way. Bloomberg reports that Opel sales in France dropped a massive 30 percent to 6,462 units in July. This doesn’t bode well for Nick Reilly, head of GM’s European division, as he tries to make Opel attractive enough for the corporate mothership to finance a turnaround with American taxpayers’ money. Shall we take a closer look at the French sales figures…?

Yes, there were abortive attempts to rename French Fries to Freedom Fries (you want ketchup with your freedom?) There were calls for a boycott of all things French, including French mustard, excluding French’s Mustard (and maybe the Statue of Liberty.) Nevertheless, I think deep down the Americans secretly admire the French. With their lavish welfare system, generous benefits and their willingness to strike if someone so much as asks them to work an hour outside of their contract, who wouldn’t want to be French?

Hell, in the UK we wish we could be like them. If we were we might still have some global companies in our ownership, instead of selling out to the first bidder. But as Peter Schiff ( who I’ve mentioned before) said, the party is over, we have to stop paying ourselves these lavish benefits, allow the free market to function and stop being lazy. In the UK, the government is going on a massive austerity program in order to balance the books, Italy pushed through a huge €24b cost cutting plan and even Spain just managed to push through a €15b budget reduction plan by a majority of just one vote. France hasn’t made a cost cutting plan of their own. It’s almost as if the current economic turmoil doesn’t apply to them. French benefits have survived recessions before and they’ll survive this one, right? Well, don’t be so sure. It seems that the French may be coming around to the rest of the world’s thinking, and the message to change their ways is coming from an unlikely source. General Motors.

A few months ago, I wrote about a concept car which Peugeot showcased at the Geneva Motor Show. It was going to emit small levels of CO2, sip diesel, rather than drink it, and have more power than Ferdinand Piech. Everyone was sceptical as concepts rarely turn out they way they were planned once marketing, accountants and managers have had their way with the car. Well, something funny happened….

Volkswagen, Daimler, Audi, BMW: Despite tanking sales in Europe, they all report record numbers. Why? Exports and a weak Euro. It’s not just a German thing. Same across the Rhine: Agence France Press (via Google News) reports that Renault is very bullish on the back of strong sales in the first half of 2010. Renault is up an amazing 21.6 percent to 1.35 million vehicles. Growth of 21.6 percent is good in Renault’s eyes as they claimed that the global market grew 16 percent. Meaning: Renault gained global market share.

You take some of my rescued state-owned automaker, and I’ll take some of yours. That seems to be the cunning plan cooked up by presidents Putin and Sarkozy, as the two face the prospect of rescuing struggling firms in the midst of a weak European market. And actually, it seems that the idea was really Putin’s. French-owned automaker Renault is “more than happy” with its 25 percent stake in the moribund Russian automaker AvtoVAZ, reports Bloomberg, but Russia is offering to buy 15 percent of the French firm if France in turn takes on more AvtoVAZ equity. Considering that Reanult paid $1b for 25 percent of a firm that has been kept alive only by government intervention, a closer embrace of VAZ does not seem advisable. Nor, frankly, does any form of “Franco-Russian Leyland” sound like a good idea.

“Flirtation between Nissan and GM has a rich history,” said our Dear Leader. Here we go again. This time, with the whole cabal. Renault’s Ghosn has put an entry in the Match.com of the auto trade. Reuters says that Renault could work closely with a U.S. partner if the occasion arose, but it is not crucial. Not only is Renault flirtatious, they make it sound like it’s a no strings attached kind of a thing. It never is …

Wasn’t there a carmageddon? Forget about it! Nissan wants to be essentially debt free for the first time in three years in the fiscal year ending March 2011, says The Nikkei [sub]. Nissan’s net cash position gauge is expected to swing from $546m in the red to about $1b in the green.