Tucked into a corner of the communication department of Nissan is a Japanese rarity: A closed room. Usually, a Japanese office is a sea of people, working elbow-to-elbow without even the suggestion of a cubicle. Most of the floor in Nissan’s swank headquarters in Yokohama is just like that.

Behind the closed doors however works an unusual group of people who probably have to be kept away from the general population anyway: An international team of professional journalists that could change the way companies interact with the media.

Toyota’s Chief Engineer Satoshi Ogiso figures that efficiency improvements of traditional gasoline engines may soon hit a wall. He gives the gasoline engine an improvement potential of “maybe 10 to 20 percent.” Today, we have proof that it is a fight of diminishing returns. Mazda is now at a point where it saves up to 10 percent of gas by idling the alternator. How is that done?

The slow exodus from Japan continues. Driven out by the strong yen, which turns exports into a money loser, Toyota is building out capacities abroad. Toyota will invest €265 million ($354 million) into its existing plants in Turkey and the UK. 1,900 new jobs will be created, 400 in Turkey, 1,500 in the UK.

Suzuki has made good on its repeated threats to sue Volkswagen. The Japanese carmaker initiated arbitration procedures. This according to Reuters, The Nikkei [sub], and sundry other media that has been covering the domestic dispute between the couple. Suzuki originally had given Volkswagen some time to consider and was planning for a repurchase of the 19.9 percent Suzuki shares held by Volkswagen. After Volkswagen CEO Martin Winterkorn denied the offer out of hand, and implicitly said that he was waiting for Osamu Suzuki to be replaced by younger blood, Suzuki said “mo takusan desu” (enough is enough) and filed papers with the International Chamber of Commerce International Court of Arbitration in London. Don’t expect a quick end of the drama.

Renault already upset the European car market with its low cost Logan, which goes for around €7,700 (approx $10,000) in France. If the French newspaper La Tribune has its sources straight, then Renault could be coming out with a car that is priced like a high-end bicycle.

Renault allegedly is working on a car that will cost €2,500 ($3,350). France’s wire service Agence France Presse says it is not true, but la Tribune sticks to its guns and says that it maintains that its “proprietary information” is correct. According to TTAC’s proprietary information, AFP is wrong, and La Tribune is on the right track.

Japanese automakers in Thailand are resuming production in the inundated country, all except Honda.

That interview with Volkswagen CEO Martin Winterkorn is a treasure-trove of information. It also gives an insight into Volkswagen’s strategy with rambunctious Suzuki: It will be a Sitzkrieg. Volkswagen seems to be intent on waiting things out until Osamu Suzuki passes away.

Winterkorn will be at the Tokyo Motor Show. Someone with a perverse bent made Volkswagen (booths EP06 through EP10) close neighbors of Suzuki (EP12). Only Mitsubishi (EP11) keeps the brawling couple at distance. But Winterkorn doesn’t have Osamu Suzuki on his dance card:

“A meeting is not planned. Should we run into each other, then we can talk about everything. There is one exception: Our 19.9 percent share is not for sale.”

Asked how Winterkorn intends to settle the matter, he answers:

We have been following this phenomenon for a while. Joint ventures in China create faux Chinese brands. Because? Because it’s the right thing to do, at least as far as the Chinese government is concerned. Officially, the reason for those fake Chinese brands is to make cars more affordable. Off the record, automakers roll their (slanted and round) eyes at this reasoning. A new brand doesn’t miraculously make a car more affordable. In the contrary. To establish a brand costs money. To establish dealer networks costs money. To build new cars costs money, even if they are on passé platforms. But you’ve got to do what China’s bureaucrats think you’ve got to do. Possibly, all these joint venture brands, from GM’s BaoJun on out, will end up in nice statistics that prove that homegrown Chinese brands are selling, and that exports are up.

Why the rant? Nissan and Dongfeng show the first production model of the faux Chinese Venucia brand at the Guangzhou auto show.

Both Akio Toyoda and Carlos Ghosn are in the U.S. and what are they doing here? They complain loudly about the high yen. Akio Toyoda uses an interesting reasoning. It may make Americans wish for an even higher yen. Toyota may shift a “significant” amount of production to the U.S., if the yen stays high, and if demand in Japan will fail to consume Toyota’s vast capacity there. If the majority of Toyota’s output is shipped overseas, then factories will follow.

“If demand in Japan recovers, we will continue and work to maintain production of 3 million units” in Japan, Akio Toyoda said to Bloomberg. “If most of it becomes exports, shifting a significant amount of production to the U.S. may be considered.”

Attempts to ratchet-down the rhetoric in the Suzuki/Volkswagen row have failed. Suzuki launched a heavy missile in the direction of Wolfsburg. Suzuki will take the case to court, The Nikkei [sub] heard before a scheduled press conference in Tokyo. But fear not, Volkswagen gets a whole year to make up its mind.

Toyota steadfastly refuses to refer to its upcoming new compact rear-wheel-drive sports car as anything else than a “new compact rear-wheel-drive sports car.” But Toyota sure knows how to whip up more excitement (if that is possible) before the pocket racer will be officially unveiled at the Tokyo Motor Show. While websites around the globe publish every scrap of paper or digits they can lay their hands on, Toyota will paint you a picture.

The Japanese car market is anything but closed, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association said yesterday. Vis-a-vis The Nikkei [sub], Shiga basically repeated what we had said all along, and he used the same line of reasoning that doesn’t seem to register with some blockheaded parties:

“Import duties are zero, and there are no regulations or procedures that block American cars. European vehicle imports are increasing.”

Shiga should know. He is COO of Nissan, which quietly turned into Japan’s largest car importer on a brand basis for the year, only to fall back to number 2 in October on strong imports of the Volkswagen Group. Shiga also asked the same question which I always use, usually without receiving an answer:

According to my informants, the Tokyo Motor Show will degrade into a „regional show“ and will pale in comparison to the monster shows in Shanghai or Beijing. Toyota will ignore that, and its exhibit will be “likely one of the most closely watched ones of the show,” as Automotive News [sub] says.

The crowd magnet will be a car which Toyota steadfastly refers to as the “compact, rear-wheel-drive sports vehicle jointly developed by Fuji Heavy Industries and TMC.” Any guesses what it may be?

Autoguide already publishes under-hood pictures, but Toyota will release neither name of the FT-86 / Scion FR-S, nor will it hand out pictures, even under strict I-will-cut-your-fingers-off-if-you-break-it embargo. First in-the-flesh pictures should appear on Sunday, November 27. How do I know that? Trust me.

Did I say no pictures? You will drown in pictures after the jump …

Back on Friday, Toyota’s Chief Engineer Satoshi Ogiso and TTAC talked about the past of the Prius, and the future of the automobile. Back to the here and now: We also talked about a car that has been a ( badly kept) secret until today: A compact hybrid that suddenly makes former miser-meisters (such as the Honda Insight or the Mazda2) look like gas guzzlers. It is the Toyota Aqua, probably called Prius C when and if it lands on other shores.

Yesterday, we met Toyota Chief Engineer Satoshi Ogiso in his office in Toyota City. He is responsible for all new technology at Toyota. Yesterday, we talked mostly about the past. Now, we talk about the future.

When I ask Ogiso what car we will be driving in the future, he whips out a chart. It’s a chart which I call “Peak Oil 2.0.”

Yesterday, the new 2012 Nissan GT-R landed on rank 10 of the fastest Nordschleife lap times. The only problem is: Nissan knows absolutely nothing about this record run. As far as Nissan is concerned, it doesn’t exist, and there is nothing to say.

“Look, when we started the Prius project in 1993, we did not even think of a hybrid system for the Prius. We did not set out to build a hybrid. We studied what was needed for the 21st century, and two things were certain: The need to protect the environment, and the need to bring consumption down. That’s all we knew, and you did not need to be a clairvoyant to know it.”

The man who told me this last Friday better become clairvoyant. On Satoshi Ogiso’s shoulders rests the future of Toyota. Ogiso is responsible for all new technology at Toyota. As Chief Engineer, he is in charge of the Prius and its many siblings, he is responsible for plug-in hybrids, EVs, fuel cell hybrid vehicles, anything apart from the aging internal combustion engine is his.

I meet Ogiso at the world headquarters of the (still, officially) world’s largest automaker in Toyota City.

The Honda share is edging closer and closer to its 2009 carmageddon lows. And guess who knows a good bargain when they see one? The Chinese. The Nikkei [sub] reports that a “stealth” Chinese fund has emerged as a major shareholder in Honda.

Toyota announced today that it will resume production in Thailand on November 21. Full scale production probably is a while away. At a visit to Thailand, Toyota CEO Akio Toyoda said that “Toyota is starting to get a firm grasp of the situation and would like to restart production as soon as possible.” This does not mean that it is business as usual yet.

None of the approximately 100 journalists that packed Toyota’s basement meeting room in Tokyo today was surprised when the midterm results of the current fiscal year were announced, and there was an operating loss of 32.6 billion yen ($417 million). The loss was a little higher than expected, but expected it was. If you lose 689,000 units in sales, then you are bound to lose some money. The surprise came in the form of an unexpected new benchmark: Nissan.

With the Tokyo Motor Show only weeks away, Japanese manufacturers start dribbling out announcements of what they will show at the show.

Subaru for instance announced to the astonished world today “that it will roll out the Subaru BRZ compact sports car, jointly developed with Toyota Motor Corp. at the Tokyo Motor Show later this month,” says The Nikkei [sub]. No word from Toyota on its Subaru-sibling, any announcements from Aichi are under tight embargo. And when they say embargo in Japan, they mean it. Except when you are Nissan.

The Nikkei [sub] says that Toyota’s production in Japan “is being paralyzed by the parts shortage caused by the severe flooding in Thailand, with assembly lines for 20 models to grind to a halt.”

According to the wire service, four minivan models already stopped rolling off the lines, with 16 more models to follow while Japanese plants wait for parts such as electronic components for audio equipment and gauges.

The Nikkei warns:

Nissan today released the 2012 model of its super car that is not only for the super rich, the GT-R. This is not a pre-announcement of what will be shown at the Tokyo Motor Show a few weeks from now. According to Nissan, the car “goes on sale in Japan on November 24 at Nissan dealers nationwide.”

The 2012 model has more power (550 hp, nominal), more torque (632 Nm), and uses a bit less gas (8.6 km/liter or 20 mpg, definitely non-EPA).

Unofficial acceleration times, measured on Sendai Highland Raceway, November 3:

• 0-100km/h: 2.8 sec.
• 0-60mph: 2.7 sec.

With the 2012 GT-R, Nissan most likely will have another go at the Nordschleife. Nissan certainly dropped ample hints during the launch.

The persistent floods in Thailand did cost Japanese automakers already close to 200,000 unbuilt vehicles, and no end of the floods is in sight. This is putting a severe crimp into the major push that was planned for the last quarter of 2011 and the fist quarter of 2012 to make up for lost production after the March 11 tsunami.

Here is a current tally by The Nikkei [sub].

A lot of us have never been in a Nissan Leaf. But what about a battery operated Nissan Leaf Nismo race car? Chances are slim: Only eight of them have been (hand) built so far. Yesterday, I was in one of the few.

I was still a little shook-up from the treatment administered by Matsuda-san, and it must have shown. “Why don’t you get some fresh air?” was the polite Japanese suggestion.

Today, I drove all 530 hp (more or less) of the 3.8-liter twin-turbocharged 24-valve V6 engined Nissan GT-R down their test track in Oppama, not too far from the U.S. Yokosuka Navy base, home of the 7th Fleet. In a way, car, neighborhood and situation reminded me of the nuclear weaponry: Have it, but don’t use it.

I was in the air to Tokyo when Nissan announced its half year results in Yokohama. But Nissan was kind enough to send me a video they produced in their spanking new Yokohama studio. In an interview with CFO Joe Peter, Nissan’s Dan Sloan discusses not just Nissan’s good numbers, but also the strong yen (which makes them look less good), Thailand, and the outlook for the rest of the year.

Floodwaters in Thailand show no signs of receding, and continue to affect car production in Thailand and around the world. Toyota’s three Thai plants in Samrong, Gateway and Ban Pho are dry. They have been shut down for a lack of parts since October 10, and the closure will continue at least through November 12, Toyota says in a statement.

When the March 11 tsunami hit, Nissan was first to recover. This was caused by quick reaction and sheer luck. Now that Japanese carmakers are under water in Thailand, it looks like Nissan will emerge relatively unscathed again. The Nikkei [sub] reports that Nissan plans to resume partial production in Thailand from November 14.

The US-Korean (not quite) free trade agreement will bear fruit, and U.S. cars will be shipped to Korea. The funny part is: Some of the first companies to do so are Japanese. The Nikkei [sub] writes that Toyota will begin exporting cars from the U.S. to South Korea in early November.

The Nikkei [sub] says that Nissan will move the (or a) headquarters of its Infiniti brand to Hong Kong, and that Nissan “will begin manufacturing Infiniti-brand vehicles in China as early as next year, becoming the first Japanese automaker to produce luxury cars in that nation.”

Not so fast, say close-to-the-matter contacts in Yokohama.

Regular Vehicle Sales Japan October 2011

Sales of new cars in Japan rose 28.3 percent in October to 247,927 units, the Japan Automobile Dealers Association reports today. For the current fiscal year (April-October), sales are still 22.2 percent in the hole at 2,214,878 units, compared to 2,846,804 units sold in the same period of 2010. The numbers do not include sales of separately reported minivehicles. The numbers are not a sign of newfound health. They are simply the effect of a comparison with a market that had crashed in fall 2010 after subsidies were withdrawn.

It took Honda factories just a few weeks to recover from the March 11 earthquake and tsunami that hit Japan with the force of 31,250 Hiroshima-Nagasaki nuclear bombs (if some scientists are right.) Once parts came in, all Honda factories were ready to make cars again. Now, Honda faces a more devastating disaster – caused by plain rainwater. Honda will have to keep its Thai factory closed for half a year once the flood waters recede, The Nikkei [sub] writes. Honda’s total production loss is expected to exceed 100,000 units, accounting for about 3 percent of Honda’s global output.

Toyota says it will suspend production at its assembly plants in Indiana, Kentucky and Ontario, Canada, along with an engine factory in West Virginia to cope with a shortage of parts, caused by flooding in Thailand. The parts shortage is beginning to affect global operations.

Divorce is a complicated matter. Sometimes, it takes a while for all involved that it’s over. Apparently, they are in that phase. If the German magazine Wirtschaftswoche is correctly informed, then VW CEO Martin Winterkorn wants to bring the matter to a conclusion until the end of this year – one way or the other. Says Wirtschaftswoche:

Japanese carmakers, which barely have recovered from the effects of the March 11 earthquake and tsunami, find themselves in another catastrophe. Floods in Thailand cost Japanese automakers approximately 6,000 cars a day, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said today in Tokyo.

The exodus of Japanese automakers continues – this time, in the opposite direction. If the sources of The Nikkei [sub] are right, then Mazda will stop making the Mazda6 in the U.S. and move production to Japan and China.

According to U.A.W. talking points, the Japanese car market is closed to foreign imports, and the yen is kept artificially low. Utter insanity on both counts. The customs duty on new cars imported to Japan is exactly zero, and the yen is so obscenely expensive that Japanese carmakers openly threaten to leave and privately are shifting as much production as possible out of the country. Unbeknownst to talking point readers, Japan has had a thriving car import market for decades. For more than a year, imports to Japan showed an uptick. TTAC has been taking about this for quite a while, here, then here and also here.

Today, The Nikkei [sub] did wise up to the fact that imports are getting hotter in Japan despite a tepid new car market. The Nikkei sent a reporter to an Audi showroom, interviewed a BMW customer, and noted a societal change: “My wife prefers foreign cars, so that’s why we bought one,” a bank employee who traded his domestic car for a BMW told The Nikkei. “They have lower fuel efficiency than Japanese cars, but that is not a big problem because we drive only on weekends.”

Now what’s really going on with imports to Japan? Let’s look at it a little closer.

Six months after having been devastated at home by the March 11 earthquake and tsunami, “Japan has experienced its largest overseas investment loss ever as a result of the flood disaster in Thailand,” Japans’s ambassador to Thailand Seiji Kojima told the Bangkok Post.

The admonitions by Lower Saxony’s premier to wash dirty laundry in the privacy of your office appear to bear fruit – at least for the time being. Volkswagen has agreed to a cease-fire in the war of words with Suzuki.

If the war of words and press releases between Suzuki and Volkswagen escalates into a legal duel, then the showdown will not happen in a court of law. Germany’s Handelsblatt learned that the “secret cooperation agreement between Volkswagen and Suzuki specifies arbitration in case of differences.”

Commonly, arbitration is binding in these cases. It may not even come to that. David McAllister, Premier of Volkswagen’s home state Lower Saxony, which holds 20 percent of Volkswagen, intervened over the weekend.

The trouble with EVs is that they need batteries. Batteries are expensive and heavy, they deplete quickly and are prone to early death. Japanese carmakers and universities are assaulting the problems head-on. They have batteries that go twice as far and live twice as long. But there is a new problem …

Divorces usually get messy when there is money involved. The Suzuki vs. Volkswagen case is no exception. There are irreconcilable differences. Suzuki wants out, Volkswagen would like to swallow Suzuki whole. The rest are accusations and counter-accusations that are as interesting as divorce papers. In the last days, the Kabuki dace went into a new phase as both sides ratchet up their rhetoric.

Japanese carmakers are driven out of the country by a rising yen and an urge to diversify their production after the catastrophic March 11 tsunami. A favorite destination is Thailand. Due to free trade agreements with many nations, Thailand increasingly morphs from the Land of Smiles to a South East Asian production and export hub. Now, most car production in Thailand is stopped – again because of killer floods.

The not quite so rare earth is getting less rare by the day. The stuff that had raised the specter of a Saudi-sized rare earth embargo by the crafty Chinese is being engineered into oblivion. It also shows up en masse in the strangest places. Such as on the bottom of the sea.

While the discussion about the value of the yen continues (also at TTAC), the exodus from Japan is picking up steam. Toyota is joining other carmakers that quietly turn India into a car export nation to be reckoned with. Toyota’s Chief Engineer Yoshinori Noritake (above) soon will be able to smile: Toyota’s subsidiary in India will export Toyota’s and Noritake’s “BRIC car”, the Etios, to South Africa in March 2012.

Mazda confirmed what the world had known for more than a year: Its iconic, Wankel-powered RX8 is going to die. “Mazda RX-8 production will end in June 2012 ,” says a Mazda statement. Mazda celebrates the end of an era in style. The Hiroshima company lays on a Mazda RX-8 SPIRIT R special edition that will keep the spirit alive after the RX8 has given up its ghost.

Whither the Wankel?

Again and again, Japanese automakers had been warning that they cannot stomach the strong yen, and that it will eventually cost jobs. Today, the yen stood at 76.6 to the dollar, and Japanese carmakers are packing.

In a press conference that is about to begin in a few minutes in Curitiba, Brazil, (see picture above), Nissan’s CEO Carlos Ghosn is expected to announce the expansion of an existing Renault plant, and the building of a new Nissan factory. And possibly even bigger news.

A day after Mazda had announced that the company “has become the first automaker to successfully develop vehicle components using 1,800 MPa ultra-high tensile steel,” Nissan announced “the world’s first Ultra High Tensile Strength Steel rated at 1.2 gigapascals (GPa).” So who’s on first?

5 minutes of in-depth research revealed that 1,800 MPa equal 1.8 GPa. In the heavy metal business, those Gs are similar to gigahertz or gigabytes in computers: The more, the merrier. Whether Mazda has outdone Nissan or v.v. is also a bit like Pentium and Athlon: It depends. What matters is that cars get both stronger and lighter

Three topics give a car engineer sleepless nights:

Remember when cars, especially Toyotas, suddenly had a mind of their own, started accelerating, leaving their drivers helpless and hapless? It was in the beginning of 2010. The media cited scores of allegedly killed people. Source: The NHTSA complaint database. When complaints skyrocketed, the media wrote about a dramatic increase of complaints. Now, have a look at the graph above.

In Europe, black cars are all the rage. According to Dupont’s 2010 Automotive Color Popularity report , the most popular car color in Europe is black, followed by grey. Usually a very dark grey. In Japan, the most popular car color is white. Followed by silver. Usually a bright silver. However, black is coming on strong in Japan. It already is in third place. Always on the lookout for the latest craze, the Japanese car industry is eager to get into black.

Mazda releases its roadster (known stateside as the Mazda MX-5 as a BLACK TUNED special edition for the Japanese market.

Yesterday brought you news of the tepid Japanese car market that has been down 26 percent for the year. Commenter Alex Nigro DEMANDED the answer to “Are Japanese people still not interested in driving?”

The Nikkei [sub] immediately went on the case and reports today that there is one segment in the industry that is booming: Bicycles. Writes the Nikkei:

“The March 11 earthquake triggered an increase in the number of people who commute to work by bike, and new business are cropping up to accommodate this trend, including high-end park-and-shower services in central Tokyo.”

One of the biggest complaints about biofuel is that food is turned into fuel while people go hungry. Price hikes for staples have been blamed on ethanol production, especially subsidized ethanol production. Ethanol is usually made from sugarcane, corn, and beets. Grapes find their way into fuel tanks instead of wine glasses, rice is often driven instead of eaten. Woodscraps and agricultural residue would be less of a moral and financial hazard if converted into fuel. However, it proved resistant against yeasts. Today, Toyota took reporters to a lab in Aichi and showed off a yeast that wood-scraps, dead leaves, straw etc find highly irresistible.

For the first time in 13, yes 13 months, Japanese new car sales registered a small uptick. Small (sukoshi) it is, 1.7 percent, compared to September 2010. And that only, because September 2010 was bloodbath.

When we sang our Sayonara to growth a year ago, we didn’t expect it would be THAT bad: For the 9 months of this year, Japanese car sales are down by a whopping 25.9 percent. Following data provided by the Japan Automotive Dealer Association. The numbers do not include minivehicles. (Careful when applying the data to minivehicle-heavy makers such as Daihatsu or Suzuki…)