WAS

We are the German government, and we are here to help you, Opel: The German government is still waiting for Opel to hand in a solid business plan that could be the basis of financial assistance. What Opel has submitted so far has been found inadequate. Finance Minister Steinbrueck today put Opel on notice that without solid information there will be no money decision. Volker Kauder, head of the CDU faction said: “It looks like they need help to come up with a concept. We’ll help ’em.”

Saab? Volvo? Bu yao! Chinese automakers Dongfeng and Geely said that they have not held any talks over a possible bid for General Motors’ Saab brand, Gasgoo says. A Dongfeng spokesman as unaware of any interest by his company in bidding for the Saab brand. A senior Geely executive, when asked about his company’s possible acquisition of Saab or other brands, told reporters: “No, we did not. We’re not interested in Saab or the other brands out there.” Media reports have also said Geely was in preliminary talks with Ford Motor about the sale of the US automaker’s Volvo car unit. This was likewise denied by Geely. This comes on the heels of the Chinese government warning their automakers to buy overseas assets.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. This column will be filed from Berlin until further notice – if & when time allows.

Forster plays the—usual—jobs card: Opel will have to slim down its workforce, says GM Europe chief Carl-Peter Forster, “hopefully not more than 3,500 jobs.” That according to Automobilwoche [sub]. How many and where exactly is unclear—and will depend on how much money which government will fork over. Forster said in Geneva that Opel has surplus capacities of 30 percent.

Sumimasen, can you spare some billions? Japanese automakers are keeping up with the Joneses, or make that Tanakas: Japanese automakers are turning to government lending to secure operational funds, the Nikkei [sub] writes. Honda is considering borrowing from the Japan Bank for International Cooperation, Toyota is negotiating a five-year loan of about 200 billion yen, also from JBIC. Mitsubishi Motors has applied for a low-interest loan from the Development Bank of Japan. Honda intends to seek tens of billions of yen in dollar-denominated loans from JBIC for its US financing arm, American Honda Finance Corp. The carmaker aims to build up more cash for auto loans and leases. Toyota Financial Services Corp. has also approached JBIC to procure funds for its US financing unit, Toyota Motor Credit Corp. Nissan is double dipping—at the very least. They applied for a roughly 50 billion yen loan with the DBJ as well as a low-interest loan from the US government. It is also considering tapping JBIC loans.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. This column will be filed from Berlin until further notice—if & when time allows.

Time is money: GM Europe is running out of both, Carl-Peter Forster said to today at the Geneva Autoshow, Automobilwoche [sub] reports. GM needs the requested €3.3B “as soon as possible” Forster said. He’s not counting on private investors: “Each discussion with a private investor takes months, half a year at least, and we don’t have that kind of time.” Foster also said that GM has “three plants too many” in Europe. German Economy Minister Karl-Theodor zu Guttenberg said today he will not be pressured into making a quick decision on granting state aid to General Motors’ Opel unit, Automotive News [sub] says. Germany is considering whether to support Opel after GM Europe unveiled a plan to spin off Opel and its UK sister brand Vauxhall to try to avert job cuts and plant closures.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. This column will be filed from Berlin until further notice—if & when time allows.

Japan down again: Japan’s domestic sales of new cars, trucks and buses fell 32.4 percent year-on-year in February, declining for the seventh straight month, the Nikkei [sub] writes. This is the sharpest fall since May 1974, when sales were hit by the first oil shock. Sales in February totaled 218,212 vehicles, down from 322,613 a year earlier, the Japan Automobile Dealers Association said. The figures don’t include sales of mini-cars or mini-trucks. Toyota’s sales dropped 32 percent to 98,808 units, with sales of the Lexus luxury car plunging 63 percent. Nissan fell 35.2 percent to 40,694 units, while Honda sold 30,101 vehicles, 21.1 percent fewer than last year.

India coming back to life: Most Indian auto makers led by market leader Maruti Suzuki India Ltd. reported a continued rise in monthly sales, driven mainly by discounts, says the Nikkei [sub]. Analysts said if the sales continue to rise beyond March it may indicate a recovery in Asia’s third-biggest automobile market. Maruti, a unit of Suzuki, sold 79,190 cars, up 24.1 percent from 63,822 a year earlier. Total car sales at the Indian unit of Hyundai Motor Co. in February rose to 38,254 units from 29,001 units a year earlier.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Note: This week-end, BS will change his location to Berlin for a few weeks. WAS will be filed as time allows—or not, as RF fancies to say.

Daimler may buy Opel plant: Opel has contacted Daimler over plans to sell its Corsa-building Eisenach plant. The Financial Times Deutschland [via Reuters] bases its story on “government sources,” who also claim that Opel’s Astra and Zafira-producing Bochum plant is on the chopping block. Daimler management board member, Thomas Weber, said a takeover of Opel is not on the cards. “That also goes for Volvo or Saab,” Weber told Reuters. Meanwhile, Opel’s management is about to present their supervisory board with a restructuring plan. It’s expected to call for thousands of job cost and closure of one or more plants. Opel dealers have signaled a willingness to help secure their livelihoods by taking some form of equity stake in an independent company—an automaker without the excess workers and capacity, presumably.

And here comes the trade war: France’s President Nicolas Sarkozy wants the World Trade Organization to consider the legality of American aid to its domestic automakers. “We need to see if the U.S. aid is compatible with the WTO,” Sarkozy said in eastern France at a roundtable discussion on the car industry on Thursday, reported by Automotive News [sub]. [NB: This is the same Nicolas Sarkozy who recently announced protectionist aid for French automakers and called for a coordinated European plan to help the E.U.’s car industry.] EU competition authorities are scrutinizing car industry support from governments in France, Spain, Britain, Italy, Germany and Sweden. Separately, European Transport Commissioner, Antonio Tajani, said Europe’s lawmakers would consider appealing to the WTO if US aid made conditions unfair for European manufacturers.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

And finally, the Nano: Tata’s Nano, slated to be the world’s cheapest car at under $2,000, will finally go on sale in April after months of delay caused by problems at its main production plant, Reuters reports. Tata said it would formally launch the Nano on March 23, and buyers could start ordering the model by the second week of April. “We expect only limited quantities to be produced now—maybe about 3,000 a month—so the waiting period could be long,” said Surjit Arora, auto analyst at Prabhudas Lilladher. Tata Motors’ new Nano plant in Gujarat, in western India, is not expected to be ready until the year-end. The company has said it would make the first Nanos at one of its two existing plants in Pune, about 170 km north of Mumbai, and at Pantnagar in northern India.

Aftermath: Japan’s eight passenger car manufacturers curbed their domestic output by 40 percent compared with a year earlier to 560,471 units in January as they stepped up efforts to correct inventory levels amid a sharp downturn in global demand, the Nikkei [sub] sums up yesterday’s reports. Toyota, Nissan, Mitsubishi Motors, and Mazda had embarked on their biggest cutbacks since they began releasing production data. Daihatsu was the only one to keep its domestic output reductions in the single digits, at 2.7 percent. Production cutbacks overseas also gained momentum, with carmakers lowering output by 41 percent to 602,502 units. Honda curtailed US output 50.1 percent in January. Exports sank more than 50 percent.

Paris backpedals after slap from Brussels: France struck a clause from its €6b bailout package. Recipients were prohibited from closing a plant in France and moving it elsewhere in Europe. Automobilwoche [sub] reports that the clause ran afoul of EU rules. Despite the cleaned-up clause, the French government claims there’s a “moral obligation” for the French to stay in France. Brussels will perform a thorough vetting of the French moral imperative.

Russian bailout: Reuters reports that Russia’s car sales have slumped by one-third. In an effort to save its nascent car industry, Russia will subsidize car loans for consumers buying any one of 30 foreign and domestic models. The car-loan subsidies, worth $55.45m, will compensate banks for charging lower rates on car loans. “The decision to help seven foreign brands along with two Russian ones is a surprise coming from a government that introduced sweeping measures in January to protect local car makers from foreign competition,” says a shocked Reuters. The Ruskies have earmarked another $347m to buy up unsold parts and commercial vehicles from local producers such as AvtoVAZ, as well as Fiat, Isuzu, and SsangYong. [For a full list of parts and vehicles eligible for the two aid programs, click on www.minprom.gov.ru] Russia began a 30 percent import duty on second-hand cars on January 1 to prop up the struggling domestic car industry. The move stirred concerns about protectionism from Russia’s trading partners, and led to large-scale protests in major Russian cities that rely on the second-hand car industry.

Chinese government orders consolidation: The Chinese government issued its plan to consolidate the auto sector. It includes decisions to merge the country’s major auto-making groups to from 14 to 10, and to subsidize rural buyers of new vehicles, China Securities Journal reports via Gasgoo. According to the plan, the current 14 Chinese carmakers, which together hold 90 percent market share, will be reduced to 10 or less through mergers. The government wants to see two or three big Chinese groups with annual production each exceeding 2 million vehicles, plus four or five groups making over 1 million vehicles.

Japan going down, down, down: Japan’s domestic auto sales may fall below 3 million vehicles this year, the Nikkei [sub] reports. Japan Automobile Dealers Association Chairman Yoichi Amano predicts Japanese sales could sink to the lowest level since 1971. “The projection made last year that sales would decline below 3 million vehicles some time between 2015 and 2020 might come true as early as this year,” Amano told a general meeting of association members, expressing concern that the economic downturn may further depress demand.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

Interest in Saab: Jan-Åke Jonsson, managing director of Saab Automobile AB, said other carmakers were among the investors that had shown interest in the unit, Reuters reports. The Swedish carmaker, granted protection from creditors last week, has said it must quickly restructure to deal with losses, seen at 3 billion Swedish crowns ($347 million) this year, and find new funding from either private or public sources in order to launch new and more competitive models. Germany’s Autohaus reports that Sweden’s government again denied any financial help to Saab.

Opel will hand in homework: GM Europe and Opel finally got their acts together: they will present their long-awaited business plan to the German government in the coming days, Reuters says. The German government distanced itself on Monday from any commitment to Opel’s future.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

Opel needs more money: Up until now, Opel had mentioned that they may need €1.8b in loan guarantees “just in case.” Now Manager Magazin reports that Opel will definitely need twice the amount. There are mounting indications that the German government will only part with the money if Opel is spun off and totally separate from GM. States where Opel has plants have indicated that they would take a stake. Also, there is pressure from Berlin that GM finally transfers the €1b which it owes Opel. Germany’s Chancellor Angela Merkel is still waiting for a viability concept promised, but not delivered, by Opel.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

Increasing indications that GM plans to cut Opel loose: North Rhine-Westphalia’s Premier, Jürgen Rüttgers, had a chin wag with GM’s CEO, Automobilwoche [sub] reports. Rick Wagoner told Rüttger there are no plans to close any German plants, including the one in Bochum, which is in Rüttger’s state. “Currently.” News flash! Wagoner expressed his interest in spinning-off Opel. Rüttgers told Rick that GM would have to keep the German plants open to qualify for German government money. How the spin-off is going to work still is anybody’s guess.

Saab may go bankrupt this week: GM’s Saab will start insolvency procedures as early as this week, das Autohaus reports, citing Swedish news reports. Sweden’s Economy Minister has already said that this would be the proper way to go.

GM/Opel ready to deal: As some kind of bankruptcy for GM becomes more likely by the minute, The General has signaled its readiness to consider some kind of a third party engagement in Opel. “If it makes sense and helps to make GM Europe and Opel successful, then the management is ready to entertain partnerships with or equity engagement of third parties,” GM Europe President, Carl-Peter Forster; Opel CEO, Hans Demant; and the Chairman of Opel’s Worker Council, Klaus Franz, said in a joint announcement, Automobilwoche [sub] reports. They did not elaborate whether this means an engagement by other manufacturers or an engagement by Germany’s state and central governments. In the meantime, Chancellor Angela Merkel is still waiting for Opel and GM to do their homework and hand in a viability plan: “Right now, the government cannot act because we don’t have the necessary concepts from Opel,” Frau Merkel said.

Hell, no, let us go: On Monday, GM’s European labor leaders called for GM to jettison their Opel/Vauxhall brand. According to Reuters, the unions would prefer an independent Opel/Vauxhall, rather than face what they called “potentially fatal cost-cutting.” A statement on the labor force’s website left no doubt that the long knives were out. “The spin-off of Opel/Vauxhall . . . and the spin-off of (Swedish brand) Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits.” German state and central governments appear to be supportive of the plan.

German governments taking over Opel? The German states of Hesse and Thuringia are mulling plans for an engagement in an Opel company that has been separated from GM, Automobilwoche [sub] reports. The states are sites of major Opel factories. Both states would neither confirm nor deny the reports. “All we are saying is that we are engaged in a good discussion with the Berlin government and the other states that have Opel factories,” the speaker of the Hesse government said, somewhat sybillinicly.

Daimler and BMW to cooperate—whether they want to or not: The boards of both Daimler and BMW have issued clear directives to their rebellious troops to cooperate in alle areas which are invisible to the customers and which don’t touch the brand, Das Autohaus says. Until now, attempts to do same had been torpedoed by feuding engineers. Now “everything short of a merger or cross holdings is thinkable,” Autohaus says. Thinkable, yes. But will the piston heads in Stuttgart and Munich bury the hatchet?

Sweden to GM: “Take a hike”: GM is asking Sweden to guarantee $600 million in European Investment Bank loans to keep the Saab Automobile unit operating until it can be restructured. All they got from Sweden was a firm nej, inte alls. (Forgetaboutit.) Sweden’s Premier, Fredrik Reinfeldt, said that “GM has to bear the responsibility,” Automobilwoche [sub] reports. Some insiders see the mounting unwillingness of foreign governments to help US automakers as a backlash against the “buy American” campaign. Non-,conspiracy-bound observers point out that the Swedish government is hoping that both GM and Ford will be successful in unloading their respective Swedish brands. Sweden wants to add extra incentive to move fast by removing any additional life support.

Chery / Volvo still in play: Usually, on the second day after a dalliance between a Chinese manufacturer and a Detroit brand is floated, a denial follows like clockwork. Instead, Chery-owned Gasgoo today runs a new story reiterating a possible bid by China’s Chery for Volvo, a brand which Ford is desperately seeking to unload. The story itself provides no new insight, but the added traffic is relevant from a SIGINT perspective.

It’s a crimson-red bloodbath: More than 460, or nearly 30 percent of publicly traded Japanese companies, are expected to report group net losses in the year ending March 31, the Nikkei [sub] reports. The bloodletting is especially severe in the automobile sector, where profits through the third quarter have been wiped out by bigger and bigger losses in the last quarter of fiscal 2008.

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

European Carmageddon: “What, me worry?” Europe experienced the full brunt of carmageddon in January. Europeans bought 27 percent fewer cars in January than in the same month of the prior year. Only 958,500 cars hit Europe’s highways and myways, Das Autohaus reports. The German industry group VDA expects the trend to continue. Relatively benign losses were recorded in France (down 8 percent) and Germany (down 14 percent). The European basket cases are Spain (down 42 percent), Italy (down 33 percent) and UK (down 31 percent). Romania lost half of its new car sales.

Share or retire: Toyota will introduce work-sharing arrangements at assembly plants in the US and Britain in an effort to retain jobs after sharp production cuts at these facilities, the Nikkei [sub] writes. The move is expected to involve US factories in Indiana and Texas, which roll out large vehicles, as well as plants in the UK, including a facility that assembles midsize cars and subcompacts in the county of Derbyshire. Toyota plans to propose the work-sharing arrangements to workers at these facilities by the end of the month. Those that do not accept will be allowed to apply for early retirement.

HUMMER sold to China? General Motors Corp., working to sell assets to help keep $13.4b in US loans, has drawn interest in its HUMMER brand from a Chinese company and a private-equity firm, says Bloomberg [via Gasgoo]. The pace of negotiations has intensified in the past few weeks, said the people, who wouldn’t name the suitors and asked not to be identified because the discussions are private (so there). More meetings are scheduled this week. According to Bloomberg, “unloading the sport-utility vehicle unit would move GM closer to the goal of showing its future viability to the U.S. Treasury by Feb. 17. If the biggest US automaker can’t prove its ability to return to profit, it could be told to give up the loans or use the cash for a government-funded bankruptcy.” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, estimates Hummer might fetch $100m or less.

Fallout in Japan: The major production cuts being implemented by Japan’s carmakers are beginning to seriously hurt the finances of their parts suppliers, the Nikkei [sub] writes. Autoparts suppliers and other firms in the industry employ a total 670k workers in Japan, nearly four times as many as those working at domestic carmakers. Says the Nikkei: “If many of them fail, the industry itself could become unsustainable.”

Japanese bondage: Toyota plans to procure 100 billion yen or so by issuing about 50 billion yen each in five- and 10-year straight bonds as early as this month, the Nikkei [sub]. The issuance of straight bonds will be the automaker’s first since September 2002. The rating on Toyota’s long-term debt has been downgraded by both Moody’s Investors Service Inc. and Standard & Poor’s, each by one notch from the highest grade. This sets Toyota apart from other automakers who are treated by banks like lepers.

Nissan going for greener pastures: Nissan’s Carlos Ghosn talked up plans for mass-producing electric cars in the U.S., Europe and China, the Nikkei [sub] reports. Chief Operating Officer Toshiyuki Shiga admits that he would like to see Nissan’s electric cars made in Japan. But with the financial crisis crimping Nissan’s ability to raise capital, the US and Europe, which have introduced subsidies for environmentally friendly cars, are more attractive venues. Nissan would be the first Japanese automaker to apply for the US government’s 25 billion dollar program of low-interest loans to develop green cars.

Nissan’s no-hitter: After announcing an expected loss in the current fiscal, Nissan will suspend corporate sports activities, including its standout baseball team, the Nikkei [sub] reports. Nissan’s ball club, which was founded in 1959, has won corporate championships and produced a string of professional baseball players. Also to be sidelined is Nissan’s table tennis team, which also dates back to 1959. Its most recent stint atop the winner’s podium occurred in 2007. The table tennis and track and field teams will be disbanded at the end of next month. All eyes are on Toyota and whether they will ditch their vastly more expensive F1 team. The rumor mill says they will stick with it for the now.

Nissan goes for green green: Nissan has applied for low-interest loans being offered under a US government program aimed at promoting the development of environment-friendly cars, the Nikkei [sub] says. This is the first time a Japanese carmaker has applied for the 25-billion-dollar program. One of the conditions for qualifying for the federal loan program is that the applicant has been operating facilities in the US for an extended period of time. Nissan intends to apply for similar aid programs for developing environment-friendly vehicles in Europe and China.

Cheaper hooch: One of the many problems of bio-ethanol is that it’s expensive to make. Toyota, Nippon Oil, Mitsubishi Heavy and three other firms will jointly develop technologies to produce cellulosic ethanol from nonfood plants. By bringing together their know-how in such fields as plant cultivation, glycation and fermentation, they hope to develop a comprehensive production system and bring down production costs to around 40 yen ($0.44) per liter by 2015, says the Nikkei [sub].

Nissan sees red: Nissan cut its earnings outlook, saying it now expects a consolidated net loss of 265 billion yen for the year ending March 31, the Nikkei [sub] writes. The automaker earlier forecast a net profit of 160 billion yen, down 67 percent from the previous term. Nissan downgraded its sales outlook to a 23 percent fall. The carmaker also projects an operating loss of 180 billion yen, tumbling into the red for the first time in 14 years, in a sharp reversal from the 270 billion yen profit, down 66 percent. Nissan will cut 20,000 jobs in Japan and abroad by the end of March 2010, bringing the total payroll down to 215,000 employees. This is the first loss since fiscal 1999 when current President Carlos Ghosn became chief operating officer after Nissan formed an alliance with France’s Renault.

India keeps going down: India’s domestic car sales fell for the fourth straight month in January. Sales fell 3.2 percent in January, the Nikkei [sub] reports. They were down 7 percent in December, 19 percent in November, 6.6 percent in October, 4.4 percent in August, and 1.7 percent in July. Only in September 2008, sales rose 2.8 percent.

Isuzu sees red: Isuzu posted net losses for the October-December quarter due to weak domestic truck sales, a stronger yen and higher material costs, the Nikkei [sub] reports. Net losses were ¥11.7b in the three months ended Dec. 31, down from a profit of ¥24.4b a year earlier. Sales dropped 21 percent to ¥340.4b in the quarter, down from ¥430b a year ago. On an operating basis, Isuzu lost ¥1.6b, compared with a ¥28b profit in the quarter a year before. For the full fiscal year ending March, Isuzu lowered its outlook to a loss of ¥15b.

Yen for govt. yen: Japanese auto makers are scrambling to raise cash before the end of the fiscal year in March, the Nikkei [sub] says. Nissan is considering applying for the low-interest funds, Isuzu said Friday that it may do the same to raise several tens of billions of yen. Mitsubishi Motors is also considering tapping the Japanese government program.

Geely doesn’t want Volvo: China’s largest privately owned carmaker Geely has denied reports that it is acquiring the Volvo car unit from Ford Motor Co, China Daily reports. Ford has also approached Chery Automobile Co and Chongqing Changan Automobile Co. Li Chunbo, an analyst with CITIC Securities Co in Beijing, said when a Chinese enterprise attempts to acquire a foreign rival it has to consider how it will benefit from the deal and whether it is capable of dealing with the purchased unit. “When you compare the market value of Geely and Volvo, you will ask how can Geely raise enough money to buy the European car brand,” he said. If this goes on much longer, not much money may be needed.

La bella clunker culleria: Italy is hopping on the European clunker culling bandwagon. Italian consumers will be given six months to go out and buy a new car under a “strong package” of incentives that Silvio Berlusconi’s centre-right government expects to approve today, Financial Times reports. The package would provide possibly up to €1,500 a car, to exchange models at least 10 years old for new, relatively small cars. The government would also provide credit guarantees to banks to finance purchases. The incentives are not limited to Italian cars, but the conditions attached—small capacity and least polluting—“would clearly favor Fiat,” the FT says. Protectionism, with style . . . .

GM flirting with FAW: GM is holding discussions with major Chinese automaker FAW Group to form a partnership for light commercial vehicles, Reuters reports. The two parties have already registered a name with the State Administration for Industry and Commerce, which is the first step of Chinese joint venture courtship. GM already makes light commercial vehicles in China in a three-way tie-up with SAIC and Liuzhou Wuling. GM manufactures Buicks in Shanghai with SAIC, China’s largest auto maker. FAW, one China’s three biggest automakers, operates car manufacturing ventures with Volkswagen and Toyota. SAIC is also in a joint venture with VW. SAIC and FAW have been considered bitter rivals, although there are reports of a thawing. GM said its commercial vehicle venture in China sold 19.7 percent more vehicles in January than a year earlier, helped largely by sales of the Wuling Sunshine minivans.

Here they come: China’s SAIC will sell its homegrown cars to Spain, UK, and Israel beginning in 2010, Gasgoo reports. Some of the cars will come directly from SAIC’s assembly plants in Shanghai and Nanjing, while others will come from the company’s UK assembly plants, which SAIC acquired from Rover. The UK will get domesticated Chinese. All cars will comply with EU Euro-5 emission standards.

Germany down 14 percent in January: Not quite 19 percent as feared yesterday, but close. Germany sold 14 percent fewer cars in January 2009 than in January 2007, Automobilwoche [sub] reports. If you are looking for a statistical savior: Adjusted for buying days, the drop is only 8 percent. All eyes on the clunker culling money, €2.5K. It was introduced 1/27, too late to save the first week of the year.

Sania rejects Porsche, Porsche happy: Much to the relief of Porsche, Sweden’s truckmaker, Scania, rejected a bid Porsche had to make after taking over VW, the Wall Street Journal [sub] writes.

Itai: Japan’s domestic sales of new cars, trucks and buses dropped 27.9 percent year-on-year in January, declining for the sixth straight month, the Nikkei [sub] writes. Sales in January totaled 174,281 vehicles– the lowest for the month since 1976. The Nikkei: “Auto sales are closely monitored by economists since they are the first consumer spending numbers released each month.” And these figures don’t bode well.

Oichi: Honda downgraded its earnings forecast, but still expects to report an 80 billion yen group net profit for the year ending March 31, the Nikkei [sub] reports. Stalled sales in Japan, the U.S. and Europe, as well as the stronger yen, led the automaker to lower its projected profit by 105 billion yen. Strong motorcycle sales in Asia helped Honda skirt the losses seen by Toyota and Nissan.

Aua: Worldwide sales of all brands dropped 25 percent in January. Compared to that, VW’s January loss of 15 percent is not all that bad, says VeeDub’s Martin Winterkorn according to das Autohaus.

Idle chatter: More and more drivers of Japanese cars will have their rides die on them at an intersection, only to miraculously re-start once they mash the pedal. “Japanese carmakers have been equipping more and more of their passenger cars with a function that automatically kills the engine when the vehicle is stationary,” the Nikkei (sub) writes. Mazda aims to make the idling stop function available with some configurations of its fully remodeled Axela to be launched this summer. Toyota started offering a newly developed idling stop system on some of its Crown Comfort sedans in August. Toyota plans to install the system in a wider range of its passenger cars in the future, with a focus on Europe. Mitsubishi aims to offer some of its European model Colt cars with an idling stop system starting this year.

Ready, set, fire: Toyota plans to reduce its full-time work forces in North America and the U.K., by more than 1,000 jobs, the Nikkei (sub) says. The move is unprecedented for the automaker, which has protected full-time jobs even in tough times. A rare exception was in 1950, when it let go roughly 1,600 workers in Japan through early retirement programs. Toyota employs nearly 30,000 in North America, mainly at seven assembly plants, and about 5,000 in the U.K., where it has one assembly facility. The scope of the job reductions there will likely be finalized as early as this month. Toyota is considering pay cuts as well.

Nissan joins club of lost profits: Nissan joins other Japanese car makers such as Toyotay and will most likely ost a group operating loss of more than 100 billion yen for the year ending March 31, its first dip into the red since fiscal 1994, the Nikkei (sub) says. Depending on car sales for the January-March quarter, the loss could even swell to around 200 billion yen. The automaker logged an operating profit of 790.8 billion yen for the year ended March 2008. Sinc January, “the situation has grown more dire each day,” a company official says. Depressed demand alone will eat into operating profit by more than 200 billion yen. In addition, the yen’s appreciation against the dollar, the euro and emerging-market currencies is seen dragging down the result by some 100 billion yen.

Alliances ahead: The not yet wrapped-up tie-up between Fiat and Chrysler “may spur Japanese automakers to look into alliances of their own,” the Nikkei (sub) writes. Already, Nissan and Chrysler produce each other’s vehicles on an OEM basis, Suzuki teams with Fiat in environmental technologies. “While these two Japanese firms may need to rethink their strategies, the Fiat-Chrysler alliance could have broader implications,” says the Nikkei: “Budgetary constraints may force Japanese carmakers to focus on their strengths while striking partnerships in other areas. Foreign rivals are said to be looking for Japanese partners for the technologies needed to make fuel-efficient vehicles.” The Nikkei speculates that this could be”setting the stage for an industry reorganization involving domestic and foreign carmakers, including such midtier players as Suzuki, Mazda and Mitsubishi.”

Japanese carmakers have hat in hand: Mazda has appealed to the Japanese government for financial assistance to cover roughly 10,000 employees’ wages at two domestic plants where it has scaled back production, says the Nikkei (sub.) Mazda will pay 80 percent of the basic wages while output is suspended. The government subsidies are to cover a portion of these salaries. Mitsubishi has already filed for such aid, Nissan plans to do same soon.

Hybrid price war: Toyota plans to lower the Japanese price for the existing Prius hybrid when it releases a redesigned, more efficient version in May, the Nikkei (sub) writes. Japan’s top automaker will continue to sell the existing Prius after the new version’s release in May. Toyota plans to cut the price for the current model to around 2 million yen. Rival Honda is slated to release the Insight hybrid in February, with a starting price of less than 2 million yen. The remodeled Prius will cost 2.5 million yen.

Mazda cutbacks: Mazda will slightly increase plant operating hours in Japan in February and March, but will stick with its plan to cut output through March by 100,000 vehicles or more in addition to the originally planned 73,000-vehicle cutback for the period, the Nikkei (sub) writes. Mazda has started cutting salaries of manager-level employees by up to 10 percent from this month. Its executives already began returning 20 percent of their salaries to the company from December.

Toyota closed on Saturdays: Toyota closed all of its 12 Japanese factories Saturday in response to the worsening global sales slump. Toyota plans to suspend production for a total of three days in January, the Nikkei (sub) says. Toyota will have a total of 11 no-work days in February and March. As a result, its daily production capacity in February and March will fall to 9,000 units, about the half the year-earlier level. Toyota also plans to reduce output by closing all seven vehicle assembly plants in the U.S. and Canada on some days through early April.

Buyers return in Beijing: After disappointing sales in the second half of 2008, China’s auto market is showing signs of life. As the Lunar New Year holiday season approaches, prices have been cut and favorable credit sales policies expanded to lure customers into showrooms, Gasgoo writes. Sales in Beijing’s biggest auto market have jumped over 40 percent compared to the same period last year. Financing is becoming more popular. Currently, only 10 percent of car buyers in China financing vehicles, the rest pays cash.

Toyota shifting down in NA, again: Toyota will shut down all seven vehicle assembly plants in the U.S. and Canada on some days through early April, as part of an effort to cut growing stockpiles by half, the Nikkei (sub) reports. The number of non-operating days will vary by facility. The production line for the Sienna minivan at the Indiana plant will be stopped for 30 days. Toyota had shut down some production lines in the U.S. for three months starting last August. Toyota hopes to reduce inventories from the current 80-90 days to the desirable level of about 40 days by the end of June.

Nissan shifting down in Japan, again: Nissan will reduce Japanese domestic output by 64,000 vehicles in February and March from its earlier output plan, prompted by an increasingly decelerating global auto demand, the Nikkei (sub) says. The company had already announced reduced production as sales at home and abroad tank. Nissan had decided to dismiss all non-full-time workers by the end of March. Although it has no plans to shed any full-timers, it does intend to reduce their base pay for February by designating some of the days the plants will be idled as non-work days.

Honda shifting down in Japan, again: Honda will cut production in Japan for this fiscal year by 56,000 vehicles on the continued slump in auto sales, the Nikkei (sub) writes. The latest production cutback follows a domestic output reduction by a combined 86,000 vehicles that Honda already had announced. Japan’s second biggest car maker by volume now expects its domestic output to total 1.168 million vehicles in the fiscal year ending March, down 10% on year.

Take one for the team, Japan style: Department heads at Toyota are asking colleagues in management positions to buy new Toyota cars by the end of the fiscal year to boost the company’s sluggish sales, the Nikkei (sub) says. “The rare request is the result of a voluntary effort among a group of about 2,200 departmental chiefs and other managers. Employees are under no obligation to buy a car, and no specific models appear to have been singled out.” Hitori wa minna no tame, minna wa hitori no tame. Or: one for all, all for one, as they say in Japan.

Daihatsu may have to cut back: Toyota’s Daihatsu may do “a reorganization of its production structure if sales do not recover by March,” the Nikkei (sub) reports. Daihatus’s minicars had been relatively unscathed by the weak sales. Now they begin hurting too.

Chinese Buick: The Buick LaCrosse, set to debut at the North American International Auto Show next week, is a Chinese product. Due to Buick’s popularity in China, the company’s design team there took the lead in remodeling the LaCrosse, Gasgoo writes. Sales of Buicks in China reached 332,000 units in 2007, according to data supplied to IHS Global Insight, a consulting firm. The LaCrosse was the second-best seller there, with 71,500 cars sold. Figures for full-year 2008 year are not available yet. By comparison, GM sold 137,197 Buick branded cars and light trucks in the U.S. in 2008, down 26.4 percent from 2007. The company sold 36,873 LaCrosses in 2008, down 23 percent from 2007. In December alone, LaCrosse sales dipped 59 percent to 1,451 units.

Volkswagen makes its million in China: When Winfried Vahland, VW’s honcho in China, stuck to his guns and a 1m sales target months ago, people rolled their eyes. Well, he made it, Automobilwoche (sub) reports. VW sold 844,491 units in China, Audi contributed119,598, newcomer Skoda sold 59,284 – a total of 1,023,373 units. Growth for 2008 was 12.5 percent, above market trend. With this result, and the slight plus in the home market, VW could be the overall winner for 2008.

Audi sells a million worldwide: Audi defied gravity, motor malaise, and assorted other ailments, and closed out the year 2008 with a plus of 4.1 percent worldwide, for a total of 1,003,400 four-ringed units sold throughout the world. In Asia/Pacific, Audi sold 15.6 percent more for the year. Outlook for 2009 is even better, because in the disastrous December 2008, Audi sold 17.4 percent more than in the same month a year before.

SAIC lets Ssangyong fail: Ssangyong Motor Co. has filed for court receivership after if had failed to secure necessary funds to continue operations, the Nikkei (sub) reports. Ssangyong Motor is 51.3 percent owned by China’s SAIC. They only wanted to help if the unions would make significant concessions. Now they may have to. Ssangyong Motor’s board Friday called on management and the company’s union to closely cooperate on voluntary retirement, paid leave, wage cuts and a halt to certain benefits. Commenting on the filing, Ssangyong union spokesman Choi Hyung-gil said: “The decision is very disappointing. We will discuss how to react.”

Mitsubishi electrifies PSA: Mitsubishi will supply France’s PSA Peugeot Citroen with electric cars beginning as early as next year, the Nikkei (sub) reports. The French government is providing subsidies of up to 5K Euros, and tax breaks for consumers who purchase electric cars. “With the U.K. and Germany offering incentives as well, Europe is expected to soon become a leading electric-car market,” says the Nikkei. Mitsubishi Motors will provide its iMiEV passenger car on an OEM basis. This plug-in electric vehicle, which is powered by a high-performance lithium ion battery, is slated to debut in Japan this summer. It runs 160km on a single charge. The iMiEV is expected to be priced competitive with conventional gasoline-powered cars in France once the subsidies are taken into account. “Mitsubishi Motors Corp shares jumped 5 percent” on the news, Reuters reports.

Mazda saves cash in cats: Japan’s Mazda said on Thursday it would introduce technology that would slash the amount of precious metals used in catalytic converters by 70 percent in the new Mazda3 model, due for sales globally this year, Reuters says. Mazda said it would be the world’s first application of the single-nanocatalyst technology. The technology will be rolled out globally on certain models. Nissan last year introduced nanotechnology that would halve the amount of precious metals used in the new Cube.

Toyota asking workers to forego pay: In an unusual move, Toyota has begun negotiating with labor to treat some of the 11 additional days during which the company plans to suspend domestic operations as vacation days without pay, the Nikkei (sub) writes. Toyota aims to close all 12 of its domestic factories for six more days than planned in February and for five additional days in March. Extra factory closure days used to be treated as paid days off. Toyota seeks to stop this practice from next month to cut costs. Toyota hopes to reach an agreement with labor this month. The unions already balk.

Germany looks like bottoming out: Germany’s car buyers bought 6.6 percent less in last December than in the prior year. This is nowhere near the disaster called America. Germany’s November sales had been down 18 percent. Germany closes out the year 2008 with a minus of just 1.8 percent, Automobilwoche (sub) reports. Still, “Germany notched up yet another post-reunification low for the year, with just 3.09 million vehicles registered throughout 2008,” Reuters writes. The big loser is Toyota with a loss of 27 percent for the year. Volkswagen sold 5.7 percent more than in 2007 and raised its market share to 19.9 percent. Opel lost 9.5 percent of sales, Porsche 8.2. The Smart gained 5.7 percent. Amazingly, SUVs gained 3 percent for the year, the high price of gas be damned. The share of diesel powered cars dropped 3.6 percent to now 44.1 percent.

Toyota Motor Corp halts production at Japanese plants: They’ll do that for 11 days in February and March, Reuters reports. A 37 percent slump in December sales in Toyota’s biggest market U.S.A. was its sharpest fall in more than a quarter of a century and worse than General Motors and Ford Motor.

Porsche owns more than half of VW: Porsche has raised its stake in Volkswagen to more than 50 percent, and as a result they may end up with a truck company they do not want, writes Reuters. A Porsche spokesman confirmed that the sports car maker still planned to increase its stake in VW to 75 percent at some point this year, given a favorable market environment. As a result of its stake hike on Monday, Porsche now has indirect control of Swedish truck maker Scania, in which Volkswagen holds about 69 percent of the voting rights. Porsche is required by Swedish law to make a mandatory takeover offer, but the German sports car maker said it had no strategic interest in Scania and was not interested in acquiring Scania shares. It said it was not bound by pre-acquisition prices and was only obliged to offer the minimum price prescribed by law.

Suzuki down in India: Maruti Suzuki is India’s top carmaker. They own half of India’s car market. Like everybody in India, they got it on the chin. Their total vehicle sales in December fell 10 percent from a year ago. At least, their domestic sales rose from the previous month, after declining in November and October. Total December sales of Maruti Suzuki fell to 56,293 vehicles from 62,515 in the same month a year earlier, the Nikkei (sub) writes.

Tata WAY down in India: India’s Tata sold 23,894 units domestically in December, a decline of 44 percent compared to the corresponding month last year, India’s Economic Times reports. Including exports, Tata’s total sales for December 2008 stood at 25,219 vehicles, down by 47 percent. For the year 2008, their sales fell 11 percent.

Toyota nixes plans for Russia, Thailand: Toyota will freeze construction plans for new factories in Russia and Thailand, Bloomberg writes.

Ford sees further downside: Ford expects industry-wide December U.S. auto sales to drop by some 35 percent from a year earlier with no sign of a turnaround in the first quarter of this year, Reuters writes. Ford’s chief sales analyst George Pipas expects that full-year sales of light vehicles in the U.S.A. will drop to 13.2 million for 2008, down from 16.2 million in 2007. “The sales rates have declined like a lead balloon, really,” Pipas said. “I think when December comes in, every segment will be down. Not one segment will be up versus a year ago.” And there is no quick end in sight: “We’re not looking for the first quarter to be much different from what we saw in the fourth quarter,” Pipas said.

Hyundai sees trouble ahead: Hyundai’s Vice Chairman Choi Jae Kook gave employees an uplifting New Year’s speech, writes Bloomberg. Choi said, Hyundai expects global industrywide vehicle sales to fall at least 7.7 percent next year. Sales may fall below 60 million from an expected total of about 65 million this year, “Next year will be a critical time for all automakers as there could be a big industrywide shake-up” amid slowing sales and overcapacity, Choi said. Global industry capacity stands at about 90 million vehicles a year, Choi said. That is an untenable capacity utilization of 66 percent. Hyundai and Kia have a combined annual capacity of 5.3m vehicles. According to the Chinese news agency Xinhua, Hyundai’s “total global sales in 2008 reached 4.8 million vehicles, down from 3.96 million units in the previous year.” Of course, this doesn’t make any sense, but other news outlets print it anyway.

December possibly below 10m. Edmunds.com predicts the annually adjusted sales rate of light vehicles in the U.S. to come in at 9.8 million for December. J.D. Power and Associates now expects 10 million. The rate was 10.3 million in November. Sales results will be announced Monday, Jan. 5.

China expects 9.4m units for 2009: China’s total vehicle sales are expected to reach 9.41 million units for the full year of 2009, according to a State Information Center’s forecast, says Gasgoo. China’s GDP growth next year is expected to remain above 8 percent and its car market should see similar growth, says the forecast. Something is screwy about those numbers. January through November, China’s total vehicle sales were 8.63m. December is usually a strong month in China. The end of year number for 2008 (which is not out yet) is expected to be in the low 9m. If that’s true, then the forecast would not reflect increases in-line with expected GDP growth.

For the last time this year, a short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Until Jan 4, 2009, WAS will be filed from Tokyo.

Toyota has the biggest: Bruises and all, Toyota still stands proud. ToMoCo still has “the highest market capitalization among firms listed on the first section of the Tokyo Stock Exchange as of the last trading day of 2008, even though its market value tumbled by more than half in the year,” reports a relieved Nikkei (sub.) The automaker’s market cap is 10.01 trillion yen ($111,110,999,987.77 at today’s rate,) down 54 percent from the end of 2007. The overall market, as measured by the Nikkei Stock Average closed at 8,859 on Tuesday, down 42 percent from a year earlier. GM, Ford, and Chrysler on the other hand – don’t even mention it.

Doh! Several automakers in China reduced or suspended the production of some vehicles. They already regret it, reports Gasgoo. Dongfeng Peugeot Citroen halted the Citroen production line. Now, dealers are out of stock on the C-Elysee. Many editions of the C-Quatre model are also nearly sold out. FAW started a two-week overhaul of its equipment. As a result the supply of its Besturn model is affected. Gasgoo: “Dongfeng Peugeot Citroen Auto, FAW VW and other automakers have decided to speed up the overhaul of the idled production lines and resume their operation for more output to meet the market demands.” Spending a lot of time writing production plans, and the customers simply ignore them.

Honda up. In China: Honda sold 45,090 vehicles in China during November, up 8.7 percent from the same month last year. Sales from January to November rose 18% to 421,060 vehicles from 356,730 in the same period last year, the Nikkei (sub) writes.

GMAC to announce real soon now. GMAC “expects to soon announce the results of a debt exchange offer that is key to North America’s largest auto finance company’s capital levels,” says Reuters, citing a GMAC spokesperson. The successful swap is crucial for GMAC to become a bank, and to get under the TARP. The debt swap deadline expired Friday as planned, spokeswoman Gina Proia said, adding that the company expects to put out the results in “the near term.” Sounds like Farago’s Option A.

Charge! Carmakers worldwide are turning into Energizer bunnies, and enact plan B as in batteries. Nissan and NEC will invest 100 billion yen or more to manufacture enough large-capacity lithium ion batteries to equip a total of around 200,000 electric and hybrid vehicles a year in 2011 or later, The Nikkei (sub) writes. Honda and GS Yuasa Corp. plan to construct a factory in Kyoto for lithium ion batteries. Toyota and Panasonic are working on a joint-venture mass production of lithium ion batteries at a Shizuoka factory in 2009. Mitsubishi will start manufacturing lithium ion batteries in partnership with GS Yuasa. Volkswagen plans to develop automobile lithium ion batteries with Sanyo.

Getting real about EV: Taking the contrarian view, Bosch chief Bernd Bohr borrowed a line from Greenspan and cautioned against “irrational exuberance” when it comes to electric vehicles. “We should not tell the consumer that there will be an electrical vehicle in 2010 which is affordable and meets market demands” he said according to Automobilwoche (sub.) He expects small production runs before 2015, “but all will be heavily subsidized, either by the government or by companies that sell below cost.” Bohr figures, 80m units will be built worldwide in 2015. Of those, only 2.5m to 3m will be hybrids, and only 800K pure plug-ins.

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Japanese car sales down 30 percent: Japan is looking at “the worst December on record for auto sales,” the Nikkei (sub) writes. Only 161K autos (excluding minicars) were registered by Thursday evening. Unless a miracle happened on Friday, Japanese “sales of new cars are on track to drop almost 30 percent in December,” says the Nikkei. Sales dropped 5 percent in September, 13 percent in October, and 27 percent in November. For all of 2008, Japanese auto sales are expected to come in 7 percent lower. That would be the fifth consecutive yearly decline of the Japanese domestic auto market.

Fuji Heavy and Toyota getting cozier. Fuji Heavy, manufacturer of the Subaru, plans to join up with Toyota in the development of electric vehicles, Fuji Heavy President Ikuo Mori told The Nikkei (sub.) Fuji Heavy’s prototype electric vehicle is powered by a lithium ion battery from an alliance of Nissan Motor and NEC. They want to broaden their base of battery suppliers, and the partnership between Toyota and Panasonic would be among possible choices. Toyota holds a 16.5 percent stake in Fuji Heavy.

Japan’s auto production in the dumps: Production of cars, trucks and buses in Japan fell 20.4 percent on year in November, marking the second straight month of falls, the Nikkei (sub) writes, Vehicle output declined to 854,171 vehicles in the month from 1,072,519 vehicles a year earlier, the Japan Automobile Manufacturers Association said. Japanese domestic vehicle demand in November totaled 368,884 units, down 18.2 percent from a year earlier. Japanese exports of passenger cars contracted by 19.5 percent.

Joe Isuzu gets a haircut: Isuzu announced temporary pay cuts for all 8,000 domestic full-time employees in response to a steep decline in auto and truck sales, The Nikkei (sub) writes. Executives will get 30 percent less starting in January. Manager-level employees will see 10 percent less from spring. For rank-and-file workers, Isuzu will propose to its labor union as early as the beginning of next year a several-percent reduction in base wages that could begin as early as April. The Nikkei: “While the pay cuts would be temporary, they could last a year or longer.”

Bad November for Toyota: Toyota’s Japanese production dropped 27.2 percent in November from a year earlier to 288,138 vehicles as exports sagged 23.9 percent and domestic sales skidded 27.6 percent Overseas production fell 26.1 percent to 301,367 in the month. Other Japanese companies share in the misery, but not as much as ToMoCo: Honda down 3.9 percent in November. Mazda minus 19.8 percent. Suzuki shed 7.3 percent, writes the Nikkei (sub)

Itai-itai!: Nissan’s and Mitsubishi’s numbers came in by the end of the day in Tokyo, and they are nasty: Nissan’s domestic output shrank by 35.6 percent in November, their exports tanked by 30.2 percent, the Japanese domestic sales down 22.8 percent. Mitsubishi not much better: Output in Japan down 2.6 percent. November exports minus 13.8 percent. Domestic (Japanese) sales evaporated to the tune of minus 31.1 percent. The Nikkei (sub) carries this moral-enhancing comment: “Some analysts warn that earnings could get worse further down the road, indicating more output drops may come.” Kota Yuzawa, analyst at Goldman Sachs, said: “We still cannot see an earnings bottom.”

Toyota doesn’t just sit there. They do something: Toyota is facing its first full-year loss ever, $1.68b for the whole fiscal 2008. Never mind that this is approximately the cash GM burns through in a bad month. For Toyota, it is a huge embarrassment. Toyota will do immediately what GM ignored: Embark on drastic production changes. “The speed, breadth and depth of the global economic downturn is beyond what we had imagined,” says Toyota President Katsuaki Watanabe. Their measures will be likewise drastic. Toyota aims to revamp its operations so that it can turn a profit even if parent-only sales fall by 17% from 2007 results. All new production upgrades, including the opening of a plant in the U.S. state of Mississippi scheduled for 2010, will be postponed or scaled down. Capital spending planned for fiscal 2009 will be cut 30 percent to less than 1 trillion yen. For starters. By the way, directors will forgo their bonuses this fiscal year.

Nissan likewise: Nissan is reevaluating its plans for new factories and may postpone construction or scale back the size of some of them, Chief Operating Officer Toshiyuki Shiga said to The Nikkei (sub.) Nissan had plans to build a new factory in Russia in 2009 and new plants in India, Morocco and China in 2010. In addition, its subsidiary Nissan Shatai Co. had plans to build a new car body assembly plant next year in Kyushu. All of these plans are under review.

Toyota officially in the reds for 2008: Toyota announced today what we had reported a few days ago: “Toyota will make its first-ever operating loss in the fiscal year through March as recessions at home and abroad corral Japan’s biggest automobile maker into as tight a corner as it has ever known,” the Nikkei writes. The dark stars are in perfect alignment: The yen is too strong, the slump in vehicle sales in key markets like the U.S., Europe and Japan is too big. Toyota expects a consolidated operating loss of Y150 billion, or about $1.68 billion, in the fiscal year through March. Six weeks ago, the company still expected an operating profit of Y600 billion in the current fiscal year. Now, “it’s a kind of emergency that we’ve never experienced before,” said Toyota President Katsuaki Watanabe, speaking at a news conference in Nagoya. “The environment surrounding us is extremely harsh.” The Toyota stock went up on the news. The market had expected worse.

Daihatsu slimming also: In related news, Toyota’s small-car-making subsidiary Daihatsusaid it will cut domestic automobile production by a another 16,000 units, and will shed about 20% of its temporary work force, the Nikkei (sub) reports.

Canada paying their share for the bailout: Canada will follow the United States and give $3.3b in emergency loans to the Canadian arms of the D2.8, Prime Minister Stephen Harper said to Reuters. GM of Canada is eligible for loans of up to $C3b, Chrysler Canada Inc can get up to C$1 billion. The Canadian arm of Ford has not asked for assistance. Harper said the governments were attempting to attach some liens and secure some assets of the car companies “but I will not fool you — there is obviously some money at risk here.” Translation: Don’t ever expect to see the money again.

Toyota still has got the dough: One of the most important metrics in business is “free cashflow.” It’s the money you can spend: cash generated from operations plus capital available for investment. Despite the business downturn, Japanese companies added to their free cashflow. Toyota tops the list with an improvement of 500.7 billion yen on the year, The Nikkei (sub) reports.

And now, the Chinese bailout plan: China is thinking about its own bailout plan for the auto industry, says Gasgoo. The plan joins several that had been announced in the past. It could also be a retread of the bailout plan that was proposed Ministry of Industry and Information Technology in November 2008. What is interesting is that the plans get more focused. Or less diverse, however you may want to look at it. The first plan had nine recommendations. Further plans went to eight, then seven. The new plan now reportedly is down to six policy recommendations including jacking up domestic demand, expanding overseas markets, supporting homegrown brands, reforming fuel tax, boosting the second-hand vehicle market, and “preventing policies and regulations that may hurt auto sales.” The last one sounds like a great idea.

Cerberus wants to unload Chrysler, keep GMAC: That’s what Automotive News says. I’m sure TTAC’s day shift will have more on this.

Honda uses the F-word: Honda President Takeo Fukui had already dropped hints about locating the Honda HQ outside the land of the rising yen. Now, even more sinister threats. Fukui said to the Nikkei (sub) that Honda “may have to abandon one of its key principles of protecting the jobs of its full-time workers next year, if the Japanese currency remains at current levels of around 90 yen to the dollar.” That means F as in fire, unless the effing Yen is getting cheaper against the greenback. Honda is bracing for a group operating loss of 190 billion yen in the second half of the current fiscal year. “I think the dollar will move back to above 100 yen because the level of below 90 yen is abnormal,” Fukui said. Hint, hint, hint.

Toyota and Fuji Heavy put joint sports car on back burner: Toyota decided to delay the compact sports car it has been developing with Fuji Heavy, the Nikkei (sub) writes. The two automakers had planned to begin manufacturing the car in late 2011 for the domestic market, but the start of production will now likely be postponed until 2012 or later.

Bridge loan, possibly today: According to Reuters, “General Motors Corp and Chrysler are close to securing emergency loans as part of a U.S. government aid package that would demand sweeping restructuring at the troubled automakers, according to sources familiar with the talks.” Reuter’s sources say that bridge loans could be announced today, staving off – for the time being – the prospect of a bankruptcy. The aid package being spearheaded by the White House demands that both automakers restructure by seeking new concessions from unions and creditors.

Japan aghast: The shocks of Toyota’s announcement of a loss were so great in Japan, that there are no auto related news out of the country today while they crawl out from under the financial rubble.

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off.

Nikkei: GM & Chrysler talking again: The biggest news in Japan today is that “General Motors Corp. and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP has signaled its willingness to give away part of its ownership in the auto maker,” the Nikkei (sub) writes. The Tokyo paper assumes that “the renewal of the talks could be a way for Cerberus to show Washington — which is weighing a $14 billion rescue package for the auto industry — that it wants to cooperate in restructuring the industry.” Japan is very worried about any of the D2.8 going out of business, as it would decimate the supplier base of their transplants.

Japan on slim-fast: The Japanese are skinny already, pocha-pocha (chubby,) or even debu-debu (fat,) are a rare sight in the land of sushi. Prepare for even leaner figures, the Nikkei (sub) writes. “The situation is worsening day by day,” Honda President Takeo Fukui said yesterday, “no signs of a recovery are in sight.” In addition to the austerity measures already announced by Honda, there are more: One year delayed are a new factory in Yorii, and a new R&D center in Sakura, originally scheduled to come on-stream in 2010. Honda group firm Yachiyo Industry likewise delayed their new factory in Yokkaichi by slightly more than a year. Nissan said yesterday that it will reduce domestic car output by and additional 78,000 units than previously planned. The Nikkei: “Freshly revised production figures from Honda and Nissan have increased the total planned worldwide output cut by Japanese automakers for fiscal 2008 to slightly more than 2.2 million.”

D2.8 may get unexpected break – strength from weakness: The money-losing automakers made at least some money in some foreign markets. However, the recent strength of the greenback wasn’t in their favor. In July, a profit of one Euro translated into a $1.6. But what counts is when the books are closed, and that usually happens at year end. The recent strength of the dollar made foreign profits look less juicy. In October, that one Euro profit was worth only $1.23 – ever since, the Euro bounced around in the $1.25 to $1.29 range, which worried CFOs with foreign profits to no end. In the last few days, a miracle happed: The dollar got weaker. In the last few days, the Euro shot up into the $1.40 range, and it may even climb some more. With a little luck, and some end of year central bank machinations, a profit of one Euro could translate into a $1.50 by year’s end. Which will look quite good in the books. The bad news: If you have foreign losses, it will have just the opposite effect.

Nissan cuts output: Nissan wanted to make 1.38m units worldwide in their 2008 fiscal year, which ends in March 2009. That plan is no more: Nissan will end the year with 230,000 units less, a reduction of approximately 17 percent, the Nikkei (sub) reports today. Nissan will also eliminate “all nonpermanent positions” by March, becoming the first major Japanese automaker to ever do so. Starting in January, assembly work will be suspended for several days a month at two factories in Japan. Production speeds will be slowed. By March, all temporary workers will be gone. Any further layoffs, and the (in Japan) sacrosanct permanent workforce will be affected.

More belt tightening in Japan: A year ago, Suzuki entered the World Rally Championship. Yesterday, they said they would stop competing in the series from next year “due to the cost burden,” as the Nikkei (sub) has it. Fuji Heavy Industries, the manufacturer of Subaru, is also considering pulling out of the WRC. This follows Honda’s recent decision to withdraw from Formula One racing. The annual cost of staying in WRC racing is estimated to be in the $50m ballpark. Every Yen saved is a Yen earned. Everybody is waiting for more expensive shoes to drop in Formula 1, where the price of admission is $500m. All eyes on hapless Toyota. For starters.

BYD bullish on cars: China’s BYD Co. aims to double sales of automobiles next year, defying the gravity of the auto market, Gasgoo reports. BYD plans to sell 350,000 vehicles in 2009, up from a total of 180,000 cars it plans to sell this year. In 2007, BYD sold about 90,000 vehicles. What is hurting BYD is the slowdown in worldwide mobile phone sales, for which BYD supplies the bulk of the batteries.

Asia bourses bullish on bail-out, Bush not sure: Tokyo stocks rebounded Monday morning, with the key Nikkei index climbing more than 4 percent, “as investors reacted to hope that the U.S. government will eventually save the embattled top U.S. automakers,” the Nikkei (sub) says. Japanese traders also liked that the yen dropped against the dollar, which makes Japanese goods less expensive in dollar terms. The market ignored remarks by Bush that an auto industry rescue is far from imminent. “We’re not quite ready to announce that yet,” Bush told Reuters on Air Force One during a flight from Baghdad on an unannounced visit to Afghanistan.

What can happen if a company actually owns its real estate: Mitsubishi plans to raise its office rents in Tokyo’s Marunouchi business district by an average of 15 percent despite the economic downturn the Nikkei (sub) reports. Overall demand for office space is weak in Japan, but remains strong in downtown Tokyo. Mitsubishi is confident that its offices in central Tokyo will remain highly sought-after because most are equipped with state-of-the-art IT networks and feature cutting-edge, energy-saving technology.

VeeDub closes Chinese plants “for maintenance:” Volkswagen’s two Chinese joint ventures are planning to partly suspend production lines to “conduct maintenance work,” China Daily says, citing a Sunday report by state television. FAW-Volkswagen plans to suspend part of its production at their plant in Changchun at the end of the year. Shanghai Volkswagen will also suspend work at its production line for half a month from mid-December to early January. China Daily called Volkswagen’s office in Beijing and the two joint venture companies. The phones “rang unanswered on a Sunday,” writes China Daily.

Daimler cuts costs: Daimler aims to cut costs at its Mercedes-Benz Cars group by 10-15 percent in 2009, Reuters says. In the sales division, costs were to be reduced by up to 30 percent.

And it’s hitting the parts makers: Bosch plans to reduce costs in its automotive division by not renewing temporary workers’ contracts and possibly cutting jobs outside its German home market, a company spokesman said on Saturday to Reuters. Sales in October and November slumped by 20 percent.

Canada ready to help – if U.S. goes first: Canada’s industry minister Clement said that the Canadian government has agreed to provide aid to automakers – as soon as the U.S. government approves a rescue package, says Reuters. The amount of money Canada is proposing is based the country’s 20 percent share of the auto industry. The more the U.S. shakes loose, the more Canada’s 20 percent share will amount to.

Japanese strength hurts Japan: Japan’s automakers will lose $2.2b in profits in the current fiscal year if the yen remains at current high levels against the dollar, the Nikkei (sub) reports. Toyota’s full-year operating profit falls by $450m for every 1-yen decrease in the value of the dollar. Most automakers have an exchange rate of 100 yen to the dollar in their budgets. If the yen stays stronger than planned, it’ll mean itai-itai (major pain) for their books. The Japanese fiscal year usually ends in March. Markets have a perverse way of regulating themselves. And governments have a tendency towards tinkering with the market when they see fit. Some, amongst them the Financial Times, expect an engineered drop of the Yen before March.

Japanese unions want more: Toyota Motor Workers’ Union is unimpressed by the plight of the company, and is expected to demand steep pay increase in the upcoming spring wage negotiations, the Nikkei (sub) learned. That would be the fourth annual pay increase in a row. In tune with the current discussions, the union argues that the increase would “boost domestic demand” in addition to maintaining living standards.