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>>> trendy, micro-car, nostalgia ... ...

>>> in china, there's GreatWall (with similar car design).

US Smart car distributor hikes sales estimates

31-July: DETROIT, Michigan (AFP) The US distributor of the tiny Smart car hiked its 2008 sales estimate for the small vehicle Wednesday as US automakers reel from a sharp sales drop in big gasoline-guzzling trucks.

Roger Penske, chairman of the Penske Automotive Group of Bloomfield Hills, Michigan, Smart's sole American distributor, predicted sales would boom beyond an original estimate of 20,000 vehicles.

The tiniest car on sale in the US market, accommodates just two adults. It is assembled in Hambach, France.

"We expect Smart sales will come in between 24,000 and 27,500 during 2008," Penske said.

The Smart "fourtwo" car went on sale in the US for the first time in January.

Penske said surging gasoline prices had helped boost demand for the small, fuel-efficient car.

If Smart owner Daimler AG of Germany can deliver enough vehicles to the US, Smart sales could reach between 30,000 and 32,000 units in 2009, Penske said.

Source: AFP

The demise of the US car manufacturers...

Nissan Bucks U.S. Slump as Asians Gain Record Share (Update2)
By Alan Ohnsman and Mike Ramsey

Aug. 2 (Bloomberg) -- Nissan Motor Co.'s U.S. sales gain in July propelled Asia-based automakers to a record market share as declining demand for trucks from American competitors pushed the industry toward its worst year since 1993.

Nissan was the only large automaker to boost sales, posting an 8.5 percent gain. Toyota Motor Corp., Asia's biggest carmaker, had a 12 percent drop, and Honda Motor Co.'s sales slid 1.6 percent. Asian brands held 49 percent of the market, as General Motors Corp., Ford Motor Co. and Chrysler LLC's U.S. brands shrank to a record low 42.7 percent, according to Autodata Corp.

``The market realignment -- moving to more cars, away from trucks -- plays to strengths of the Japanese automakers, particularly Honda,'' said Jesse Toprak, director of industry analysis for automotive research firm Edmunds.com in Santa Monica, California. ``Nissan benefited to some extent because Honda was short of inventory for some small-car models.''

U.S. auto sales fell 13 percent, including a 25 percent drop for light trucks, as gasoline prices stayed near $4 gallon amid a weak economy. July's unemployment rate rose to the highest in four years, the Labor Department said yesterday. Second-quarter economic growth, announced July 30, missed the 2.3 percent median projection in a Bloomberg survey.

Sales Drop

GM's sales dropped 26 percent, Ford's fell 15 percent and Chrysler's declined 29 percent. The three U.S.-based automakers rely more on light trucks, which include pickups, sport-utility vehicles and vans, than Asia-based competitors.

The slumping market spread across three continents as GM, Bayerische Motoren Werke AG and Nissan posted quarterly financial results yesterday that trailed analysts' estimates.

GM's $15.5 billion loss was the third worst in the 100-year history of the biggest U.S. automaker. Tokyo-based Nissan's net income plunged 43 percent, while earnings at Munich-based BMW slid by a third.

``A recovery in the North American market looks far off,'' said Yuuki Sakurai, a Tokyo-based general manager at Fukoku Mutual Life Insurance Co., which manages about $54 billion.

Sales for European brands dropped 2 percent, even as Volkswagen AG, BMW and Daimler AG's Mercedes-Benz reported gains, respectively, of 1.5 percent, 2.1 percent and 1.4 percent. European carmakers' market share rose 1 point to 8.3 percent.

Lowest Since 1992

The industry's annualized selling rate for July was 12.6 million vehicles, the lowest since April 1992, according to Autodata.

Toyota, second in U.S. sales this year behind GM, sold 197,424 vehicles, a decline from 224,058. Sales of the Toyota City, Japan-based company's light trucks tumbled 27 percent, including a 42 percent drop for the Tundra large pickup.

The company sold 8 percent fewer Prius gasoline-electric hatchbacks as it strains to meet demand for the fuel-efficient cars. The total decline adjusted for two more sales days than in July 2007 was 19 percent, Toyota said in a statement.

Toyota, which announced July 10 that it's suspending production of Tundras and Sequoia large SUVs through November, will boost supply of Corolla and Yaris small cars by 40,000 units, Bob Carter, vice president of U.S. Toyota brand sales, said in a conference call yesterday.

Toyota's market share was 17.4 percent, up 0.3 point from a year earlier, Autodata said.

Toyota's American depositary receipts fell 97 cents to $85.08 yesterday in New York Stock Exchange composite trading.

Honda

Honda, the only major automaker to expand sales this year, said sales last month fell to 138,744 from 141,048 in July 2007. It sold 22 percent fewer light trucks, with declines of 43 percent each for the Pilot SUV and Ridgeline pickup. Sales of Fit subcompacts jumped 93 percent.

``Honda is very inventory constrained on models like Civic,'' Toprak said in an interview. ``That's likely to be the case in August and September as well.''

Honda's market share rose 1.4 points to 12.2 percent. The Tokyo-based automaker said its total adjusted for sales days declined 9.2 percent.

Honda's ADRs declined 6 cents to $31.93 in New York yesterday.

Nissan, Hyundai

Nissan, Japan's third-largest automaker, sold 95,319 vehicles last month, rising from 87,877, spokesman Fred Standish said in an interview yesterday.

Sales rose 16 percent for Nissan's Sentra small cars and 14 percent for its Versa subcompacts. The automaker increased truck sales 18 percent, helped by the new Rogue crossover SUV and a 24 percent gain for its Frontier small pickup.

Nissan's market share grew 1.7 percent to 8.4 percent.

Hyundai Motor Co., South Korea's largest automaker, sold 40,703 vehicles, down 6.5 percent from a year earlier. Kia Motors Corp., a Hyundai affiliate, increased sales 5 percent to 28,021.

Nissan's American depositary receipts fell 91 cents, or 5.9 percent, to $14.40 yesterday in Nasdaq Stock Market composite trading. The Japanese automaker has lost 33 percent of its market value in Tokyo trading this year. Hyundai and Kia shares don't trade on a primary U.S. exchange.

Ford-affiliated Mazda Motor Corp. said sales dropped 13 percent, hurt by lower sales of CX-7 and CX-9 SUVs and the Mazda6 sedan that's being replaced this month.

Fuji Heavy Industries Ltd.'s Subaru reported a 5.4 percent increase. Mitsubishi Motors Corp.'s sales dropped 6.8 percent, while Japan's Suzuki Motor Corp. posted a 2 percent increase from a year ago.

Barack Obama must be careful not to throw good money after bad at Ford and GM
Another set of abysmal third-quarter results from Ford and General Motors should send a strong message to US lawmakers and president-elect Barack Obama: the situation at Detroit’s Big Three is so dire that giving them emergency cash will simply prolong their pain – and cost the federal government billions.

By Antony Currie, breakingviews.com
Last Updated: 6:24AM GMT 10 Nov 2008

The US should only offer support if domestic car makers undergo a wholesale restructuring under the cover of bankruptcy.

Sure, the credit crisis has hurt all car makers – even the likes of Toyota and BMW. But their problem is declining profits; Ford and GM not only lost money, but incinerated $14.6bn in three months. Ford, with some $19bn of cash and credit lines to draw on, should at least be able to sputter along for a while.

But even if GM reverts to its cash-burn run-rate of the first six months of 2008, by the end of the year it will be perilously close to dipping into the cash it needs just to keep the factories open.

With time running short, Washington politicians must be tempted simply to throw money at the problem – especially with Ford and GM pledging to find more costs to cut.

But both have a track record of being overly optimistic about car sales – even Friday’s more conservative assumptions could look too rosy quickly if economic woes continue or worsen. Add to any losses that may cause the fact that the Big Three each have to pay some $7bn into independent healthcare trusts at the start of 2010.

But leaving them to wither and die is also not an option. The risk of bankruptcy cascading catastrophically throughout the entire US car industry is too high: if one of the Big Three goes, the others would probably follow. Suppliers would be severely hurt, which would then put even more pressure on US-based foreign manufacturers.

That’s why a well-planned pre-packaged bankruptcy reorganisation makes sense. GM, Ford and Chrysler could take the necessary steps to retool their operations, such as slashing brands and dealers.

Meanwhile, the government could provide debtor-in-possession bankruptcy financing, guarantee warranties to quash any fears customers might have of buying vehicles from a bankrupt car maker and perhaps even cover some or all of any shortfalls in pensions and healthcare contributions.

It’s hardly ideal. Jobs will be lost, and benefits may well be trimmed again. But that will happen anyway. A properly engaged government plan would offer a better chance for getting the Big Three back on the road, as well as minimising the knock-on effects on the broader US car industry. That’s got to be better than simply throwing good money after bad.

Sticking With It By Christian Hill

A few months ago, I wrote that, despite all the doom and gloom, I thought the domestic automakers would survive. Unfortunately, things have gotten even worse. Just recently, a Deutsche Bank AG analyst said that GM shares will likely be worthless in a year.

Even so, I'm sticking with what I originally said. I still think the government will step in and provide the automakers with the loans they need to survive. As a GM spokesperson has said, bankruptcy "creates more problems than it solves."

GM is doing all it can to cut costs. It is laying off workers and closing plants. It is scrapping plans for some vehicles. It is going as lean as it can in the face of the worst auto market in 17 years. The company is not just sitting around, waiting for divine intervention.

How's this for a reason for the government to step in: This year, the economy has shed approximately 1.2 million jobs. Should GM go under, it will cost 2.5 million jobs in the first year alone. I can't help but think the government will do everything it can to avoid that disaster.

If things unfold as I expect and GM gets the loan it needs - and if you are the adventurous type - a LEAP option for the January 2010 calls could be a very lucrative play.

If things unfold as I expect and GM gets the loan it needs - and if you are the adventurous type - a LEAP option for the January 2010 calls could be a very lucrative play.

absolutely agree with this view...a LEAP gives time for events to unfold and possible economic recovery.... LEAPS can be inexpensive when seen from a risk/reward angle.... do we really believe that we wont chance on some rally along the way, even during this bear run? so, if there's the possibility of GM price making some meaningful rally from now until Jan2010, then there exists the reward potential....and then, you can close off that Long LEAP position..

for that matter, I am very enticed by LEAPS during this crisis....as some may know, I have some Long LEAP on FNM....which of cos...i have recovered a chunk of the cost by Writing Aug08 and Sept08 call options...from this example, one can see that the cost of a Long LEAP Call position can be recovered simply by writing the appropriate Call options...and over time, one may actually profit even if the LEAP does not get ITM by expiration...

so, do consider LEAPs at this juncture...

GM, Ford, Chrysler UAW Leaders Call Emergency Meeting (Update1)

http://www.bloomberg.com/apps/news?pid= ... refer=home

By Jeff Green and John Lippert

Dec. 1 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC union leaders will meet Dec. 3 in an emergency session in Detroit as the companies seek concessions from the United Auto Workers to win $25 billion in government loans with plans due to be submitted to Congress tomorrow.

Participants will be asked to reopen a 2007 labor agreement to consider concessions, said one person familiar with the purpose of the forum, who asked not be named because the details are private. Two delegates from each UAW local are invited, according to a copy of a letter obtained by Bloomberg News from a person planning to attend.

GM, which has said it may run out of cash to pay its bills this year, wants to stop paying union workers when plants are closed and there no other work, people familiar with GM's plans said. All the automakers are expected to ask the union for similar concessions as part of getting government aid, two union officials said today.

UAW spokesman Roger Kerson had no immediate comment on the meeting.

GM also aims to change how it pays for a union retiree health care fund as part of a broader cost cutting plan designed to win government aid, people familiar said.

The meeting is scheduled for 10 a.m. Dec. 3 at the Detroit Marriott Hotel attached to GM's headquarters building. Meetings of the individual automaker's union groups are planned for after the joint meeting, according to the notice

If I am from the union, would I want to accept GM's offer that workers get no pay while the plant is closed?

How long will the plant be closed?

This can be one of the key outstanding issue standing in the way to get loans. Must be quite a substantial cost-savings here.

Just thinking out loud. If congress hearing on Dec 5 is negative, next week we shall see S&P heading south.

Then how can buy US based cars or not like that..

LAter can buy cannot get repaired.

I think they are all 'wayanging' here. Playing chess with the Congress...and showing the public the worst case scenario so that Congress' final decision looks good.

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GM, Chrysler Said to Consider Bankruptcy to Get U.S. Bailout

http://www.bloomberg.com/apps/news?pid= ... refer=home

Dec. 3 (Bloomberg) -- General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with internal discussions.

Auto executives have warned that bankruptcy would lead to liquidation as customers abandoned the companies. In response, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.

“It’s essential for Congress to do due diligence on bankruptcy as an option so it gets a clear sense from independent people what the risks and possibilities are,” said Alan Gover of White & Case, who has been lead lawyer in $60 billion of corporate-debt restructurings.

Many solutions to the automakers’ financial problems are on the table in discussions in Washington and around the country among company officials, lenders, union officials and other interested parties, the person briefed on internal talks said.

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Just saw on the news that Honda pulls out of F1.

Definitely, the auto industry is hit very hard.