Auto News

[Devinda_Z]

well i'm pleased that at least one of the not so entirely main stream automaker i'm rather fond of is doing well

Go Subaru!

[MasterDon]

well i'm pleased that at least one of the not so entirely main stream automaker i'm rather fond of is doing well

Go Subaru!

BOOOOOOOOO!!!

lol...i kid i kid....deepdown HelRazor likes them scoobies as well

[JadeyBlitzen]

well i'm really pleased that hummer is the worst hit

[Gummybr]

http://www.autospies.com/news/AIG-Bonuses-...nt-Alone-42458/

Hmm 20mil to retire....

[Devinda_Z]

Chrysler in talks with Tata and Fiat

Future by Fiat

Chrysler president hopes for deal with Italian automaker

By combined dispatches | Thursday, April 9, 2009

source : http://www.autoblog.com/2009/04/08/new-yor...es-in-fiat-500/

NEW YORK | Chrysler President and Vice Chairman Jim Press said Wednesday that the government's May 1 deadline for the automaker to complete a deal with Italian automaker Fiat allows "ample time" to reach a definitive agreement that could be key to saving Chrysler LLC from bankruptcy.

"We prefer having a shorter time frame to get through this period, get all the questions out of our minds, and get back to business as usual," Mr. Press said during a day of media previews at the New York International Auto Show.

He surprised reporters at Chrysler's news conference to unveil a new Jeep Grand Cherokee by arriving on the stage in an iconic Fiat 500 subcompact. The 500, one of the Italian automaker's most successful models, would help fill the void of small vehicles in Chrysler's lineup if Chrysler survives and brings Fiat cars to U.S. showrooms by 2011, as planned.

"Don't you think that this would be a perfect car to get around New York City?" he asked reporters. Shortly after, the 2011 Jeep Grand Cherokee rounded the stage's corner and ascended a series of steps onto the stage.

The vehicle, which will be 11 percent more fuel-efficient than its predecessor, will go on sale early next year.

General Motors Corp., meanwhile, introduced a new sport utility vehicle of its own this week - a five-passenger crossover dubbed the Terrain. The car comes with a fuel-sipping four-cylinder engine that includes an "eco" mode that can boost highway mileage to 30 mpg.

The struggling automaker also demonstrated a new two-seat, electric-powered vehicle called the PUMA in New York. The company is developing the small vehicle, capable of hitting 35 mph and running for 35 miles on a single charge, with Segway Inc., makers of the personal transporter.

Officially, the Personal Urban Mobility and Accessibility Project - or Project PUMA - could revolutionize city travel, GM and Segway said.

"It could allow people to travel around cities more quickly, safely, quietly and cleanly - and at a lower total cost," the companies said.

Mr. Press said Chrysler has been aggressively moving to reduce costs while still unveiling new vehicles. The company has plans to introduce eight new vehicles within the next 18 months.

"We realize we have a responsibility to the American public," he said.

Mr. Press said Chrysler has been having a "constructive dialogue" with Fiat. The automaker's chief executive, Sergio Marchionne, flew to Detroit on March 30, the day the Obama administration announced Chrysler and General Motors' restructuring plans were insufficient and set strict deadlines for the companies to reach new goals or face bankruptcy.

"At this point in time with Fiat, we don't see anything that would be an impasse or a deal breaker," Mr. Press said. "We've had a constructive dialogue going, a cooperative dialogue with all the stakeholders, and we're hopeful that we'll be able to achieve the goals."

He said the company is progressing under the assumption that bankruptcy will not be required.

"We're pursuing the deal with Fiat assuming that a bankruptcy would not be the favored option. It wouldn't be in the best interest," he said. "Obviously, you can't rule anything out, but we're working full speed, 24 hours a day to achieve the alliance and get our viability plan approved."

The government has said it will continue providing short-term aid for Chrysler while the Auburn Hills, Mich., company works out a deal, but Mr. Press said Chrysler hasn't needed more than the $4 billion the government provided earlier this year.

"We've been assured that if we need additional short-term aid, it's available from the government," he said. "Right now we're OK at this point in time."

Mr. Press declined to comment on reports that banks that lent Chrysler $6.8 billion in 2007 are resisting efforts to convert most of the automaker's debt to equity.

"We've got a lot of discussions going on with a lot of stakeholders, a lot of balls in the air," he said. "Those discussions are going on right now."

In an announcement on the auto industry earlier in the day, the Treasury Department said GM and Chrysler have launched financing support programs for auto suppliers backed by $5 billion in government funds.

The programs provide government guarantees that money owed to the suppliers by the ailing auto makers will be paid. It's funded by the $700 billion bailout fund.

Treasury spokeswoman Jenni Engebretsen said the programs will restore credit in a sector that employs more than 500,000 people.

The department said last month that it would provide financial assistance to the auto suppliers. Besides money from the bailout fund, the government is supporting the auto industry with about $25 billion in loans.

Source : http://www.washingtontimes.com/news/2009/a...future-by-fiat/

[Supra_Natural]

NYT: U.S. reportedly preparing Chrysler for bankruptcy... as early as next week

by Chris Paukert on Apr 23rd 2009 at 4:27PM

According to a story from The New York Times, the Treasury Department and Chrysler are readying Chapter 11 bankruptcy documents for filing as early as next week.

The report goes on to say that the filing carries with it an "agreement in principle" with the United Auto Workers that would protect members' benefits packages, including pension and retiree health care obligations.

Whither Fiat? Apparently, the Italian automaker is still very much in the picture, although under this arrangement, it would not reach its stake-holding deal until after Chrysler is already in bankruptcy court. The big outstanding question is where this leaves Chrysler's lenders, who are owed nearly $7 billion.

Some industry watchers are apparently wondering aloud if the bankruptcy filling preparation work is merely a ploy to turn the screws on lenders, who have balked at previous proposals designed to reduce Chrysler debt. More details at the link below.

UPDATE: Chrysler's response to the NYT article is posted below the fold.

PRESS RELEASE

Chrysler LLC Response to New York Times Report

Auburn Hills, Mich., Apr 23, 2009 - "On March 30, the Administration recognized the viability of Chrysler LLC and its products, in combination with a Fiat alliance.

Chrysler has consistently said that its viability will be enhanced through an alliance with Fiat, as it represents a change in the Company's business model that expands its global competitiveness.

As we move forward in this process, we believe it's important to keep all options open. Chrysler will continue to work through the end of the month, based on the direction given by the Presidential Auto Task Force, to secure the support of the necessary stakeholders and reach a successful conclusion that the Administration and U.S. Treasury deems appropriate."

Sources: Autoblog

The New York Times

[rainbow2009]

pret auto

Plentiful links. Enjoy!

[rainbow2009]

pret auto

Plentiful links. Enjoy!

[rainbow2009]

pret auto

Plentiful links. Enjoy!

[Dj shan]

Officially Official: GM kills Pontiac

Rumors from late last week have come home to roost, and as part of its restructuring efforts, General Motors has just announced that Pontiac will be phased out by the end of 2010. GM will continue to build its accelerated viability plan around four brands: Chevrolet, Cadillac, Buick, and GMC.

As part of its latest announcement, GM also announced that it plans to have "the resolution" of Saab, Saturn, and Hummer by the end of 2009 "at the latest."

A media conference call is scheduled for later this morning and we will have more details and analysis following that, but for now, the official press release after the jump.

Autoblog

[Miyuru Daminda]

U.S. carmaker Chrysler plans to file for bankruptcy, Obama administration official says.

[GTAm]

Officially Official: GM kills Pontiac

Autoblog

So sad. I can almost feel the fire go out of the Firebird.....

[GTAm]

U.S. carmaker Chrysler plans to file for bankruptcy, Obama administration official says.

Just a formality. They have a deal with Fiat. Which is good for both companies. IMHO...

President Obama has just concluded a televised press conference where he announced that Chrysler will indeed head into Chapter 11 bankruptcy proceedings almost immediately. As part of the same announcement, he noted that the Auburn Hills automaker has reached terms with Fiat and will be headed into a partnership agreement that will include a cash infusion and technology transfers. By some estimates, the restructuring is expected to take 30-to-60 days.

Keeping an upbeat tone in his announcement, Obama also reassured Americans that they will be repaid in full before Fiat gets any stake in the automaker, and that GMAC has agreed to step in to provide loans for Chrysler vehicles. Canada is also pitching in to make it work, but the U.S. taxpayers will be on the hook for an additional $8 billion in aid.

Finally, in related news, it is being reported that Chrysler CEO Bob Nardelli (whom Obama praised during the press conference) will exit the company after the bankruptcy filing is complete.

More details as the story unfolds.

Link

http://www.autoblog.com/2009/04/30/obama-a...deal-with-fiat/

Bankruptcy is the word of the day for Chrysler, but 'merger' will soon be replacing it. The whole bankruptcy process is being pushed forward quickly to eliminate the remaining obstacles between Chrysler's viability and the Fiat merger. President Obama's speech today reflected this path, confirming both that bankruptcy is the only way forward, and that his task force finds a joined Fiat-Chrysler alliance to be viable.

The combination of Fiat's alliance and a speedy bankruptcy mean that production won't be interrupted, nor will sales. Even warranty service will go forward, complete with a guarantee by the U.S. government.

Part of the plan includes new government capital for GMAC, which has agreed to finance new Chrysler vehicles. The Small Business Administration will also be expanding its loans process to help industry suppliers remain afloat, keeping cars coming and making it easier for Americans to buy cars.

The Fiat-Chrysler alliance is thought to be worth more than $10 billion for the struggling Detroit company and could potentially save more than 5,000 North American manufacturing jobs. As Nardelli described it in an email earlier this month, the value of the deal is “equal to or greater than the total amount of loans" that Chrysler is seeking from Congress.

More importantly, the deal with Fiat could save Chrysler three to five years in development time, as well as increase productivity at idle plants through North American production of Fiat vehicles. Full details on the finalized Fiat-Chrysler agreement haven't yet been released.

Chrysler is planning to release around 24 new products by 2011, which is part of the reason why the company has requested an additional $5 billion in government aid to help pay wages for workers and continue to development products. Two of Chrysler’s new-generation of products, the 2011 Chrysler 300 and Jeep Grand Cherokee, have already been previewed and more details about the rest of model updates are due later this year.

But what does the Fiat-Chrysler alliance mean to you?

Link

http://www.motorauthority.com/obama-gives-...-agreement.html

[Pericles]

So sad. I can almost feel the fire go out of the Firebird.....

I can see MeanGreen wincing.

[Devinda_Z]

Fiat in talks over GM Europe move

Italian carmaker Fiat has begun efforts to win support for its plan to take over General Motors' European business, which includes Vauxhall and Opel.

After meeting Fiat's chief executive, Germany's economy minister said the Italians wanted to take over Opel, but without running up any debt.

Karl-Theodor zu Guttenberg also said Fiat had pledged to keep the three main German factories if its bid went ahead.

GM is under pressure to sell its European interests as it restructures.

Fears for Vauxhall

GM Europe confirmed that it was in talks with "several possible investors" some of who showed "good and realistic interest".

Saab is also part of GM Europe, but may not be part of any discussions as it is being reorganised under Swedish law.

Fiat is already trying to take over some of Chrysler, the US carmaker that has applied for bankruptcy protection.

Professor David Bailey, from Coventry University's Business School, warned that any deal could cost the jobs of UK car workers.

And Tony Woodley, joint general secretary of Unite, the UK's main carworkers' union, said: "This move sends shivers down my spine."

Meanwhile, on Monday evening Canadian car parts supplier Magna International said it was also in talks with GM and German government officials about possibly taking a minority stake in Opel.

'Consolidation needed'

Earlier, German economy minister Mr zu Guttenberg had said, after meeting Fiat Group chief executive Sergio Marchionne, that any deal would need short-term financing across Europe by the Italian carmaker of about 5-7bn euros ($6.6-9.3bn; £4.45-6.24bn).

The economy minister described Fiat's plans for Opel - which he said called for "a certain need for consolidation" - as "interesting", but said the German government would need to take time before reaching any conclusions.

Mr Marchionne is also to hold talks with the head of the Opel works council to assess the viability of a deal.

But German union official Armin Schild, who sits on Opel's supervisory board, was sceptical about whether Fiat would be an effective investor.

"I can't say if Mr Marchionne is able to save Opel, but I know that Opel and Fiat are direct competitors, producing the same types of cars for the same market, so the merger of both companies could offer little to each other and take away a lot," he said.

Job risk?

Opel employs nearly 26,000 in Germany, while Vauxhall employs about 5,000 people in the UK.

And the UK's Unite union said it opposed Vauxhall being taken over by Fiat - claiming it would be an "unmitigated disaster" that would cost jobs.

Professor Garel Rhys from the Cardiff Business School agreed that British jobs could be lost if the deal went ahead.

"General Motors has indicated they have three plants too many and those three plants too many are actually in Germany, or run by the Germans", he said.

"It could be that Fiat, knowing that the company is too big, would balk at taking on the Germans and might look for the softer option of closing a plant in the UK."

GM faces potential bankruptcy in the US and has until 1 June to restructure.

Opel has said it needs 3.3bn euros (£2.9bn; $4.3bn) to get through the economic crisis, but the German government has encouraged it to find an investor.

It has said it does not intend offering Opel a bail-out, but that it would offer investors state support.

Mr de Montezemolo told Italy's Corriere della Sera newspaper on Sunday that a Fiat takeover of Opel would create "a very strong group"

However Canadian car parts maker Magna International has also put forward what the German government has called a "rough concept for a commitment with Opel".

There has been some doubt about whether Fiat could cope with such growth.

"They're going to be a global powerhouse, I guess. Who would have thought?" said Erich Merkle, an independent auto industry analyst in Grand Rapids, Michigan.

"It'll make them a very large automaker, but we've seen that large isn't necessarily indicative of success."

Five years ago, GM paid $2bn to avoid having to take up an option to buy Fiat's carmaking business.

Last week GM said it was to cut 21,000 US jobs in 2009 and phase out its Pontiac brand, as it aims to meet the deadline set by the US government to overhaul its business and show that it is viable.

It has said a number of potential buyers had expressed interest in its Saturn brand in the US, and that it was proceeding to the next step in selling it.

Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued.

Meanwhile in the US, a court hearing into Chrysler's request for a speedy sale to Fiat was adjourned by Judge Arthur Gonzalez until Tuesday.

Source : http://news.bbc.co.uk/2/hi/business/8032213.stm

[GTAm]

I hope Saab will survive. GM tried to kill it. Hopefully Fiat can resurrect this quirky likable brand!

[ucscsades]

Something random I found coming from China yet again...the URL title itself says it all.

http://jalopnik.com/5249505/new-chinese-be...ad-and-melamine

[xXx]

Just a formality. They have a deal with Fiat. Which is good for both companies. IMHO...

talking about history repeating itself. i smell another daimler-chrysler debacle hehehe.....

[JadeyBlitzen]

Something random I found coming from China yet again...the URL title itself says it all.

http://jalopnik.com/5249505/new-chinese-be...ad-and-melamine

what a wonderful name for a car it'd be very entertaining if they bring that to sl

[Devinda_Z]

I hope Saab will survive. GM tried to kill it. Hopefully Fiat can resurrect this quirky likable brand!

in the old days yes

even now they've come up with a few decent concepts like the 9x Air etc , but some of the mainstream cars have been rebadged Subaru's & the like yes

[Supra_Natural]

Cars to be started by lasers instead of spark plugs

The familiar sound of cars failing to start in the cold weather is set to become a thing of the past after scientists developed lasers which can be used to replace spark plugs in petrol engines.

By Richard Gray, Science Correspondent

Published: 9:00PM BST 11 Jul 2009

Scientists at Liverpool University and engineers at car giants Ford have developed a new ignition system which uses focused beams of laser light to ignite the fuel.

The researchers claim the technology is more reliable and efficient than current spark plug technology and will enable cars to start more easily in cold and damp conditions.

It is understood that Ford, the world's fourth largest car manufacturer, hopes to put the laser ignition system into their top of the range vehicles within the next couple of years before making it more widely available.

Dr Tom Shenton, a reader in engineering at Liverpool University who is leading the project, said: "We are running engines everyday in our laboratory with this system now and our ultimate objective is have it inside cars driven by consumers.

"Lasers can be focused and split into multiple beams to give multiple ignition points, which means it can give a far better chance of ignition.

"This can really improve the performance of the engine when it is cold, as this is the time when around 80 per cent of the exhaust emissions are produced and the engine is at is least efficient.

"The laser also produces more stable combustion so you need to put less fuel into the cylinder."

In current engines spark plugs are positioned at the top or bottom of a cylinder and they can often fail to ignite fuel effectively if the petrol is not in the right position in the cylinder.

In the new system the spark plug is replaced by a laser powered by the car battery which is sent along thin optical fibres into the engine's cylinders where lenses focus the beam into an intense pinprick of light.

When fuel is injected into the engine, the laser is fired, producing enough heat to ignite the fuel and power the engine.

The researchers claim that the laser, which will need to fire more than 50 times per second to produce 3000 RPM, will require less power than traditional spark plugs.

Some of the laser can be reflected back from inside the cylinder to provide information for the car on the type of fuel being used and the level of ignition, allowing the car to adjust the quantities of air and fuel automatically to optimise the performance.

This raises the prospect of mixed fuel cars which can run on a number of different biofuels while ensuring they still run efficiently.

A spokesman for Ford said: "Ford, like all vehicle manufacturers, is obliged by European legislation to reduce emissions and our work in this area is led by Ford's UK R&D centre in Essex.

"This collaboration with the University of Liverpool is part of that effort, with Ford contributing in kind, with engineering time and equipment use, as well as financially."

The project has now been awarded a £200,000 grant by the Carbon Trust to help develop the system further. Transport accounts for 25 per cent of carbon emissions and it is hoped new ignition systems can help to cut this level of pollution.

Robert Trezona, Head of Research & Development at the Carbon Trust, said: "Laser ignition is attractive in a number of ways.

"It has a real potential to reduce greenhouse gas emissions in the future by improving the ignition and combustion of fuel, particularly in engines starting from cold, but it can also be used in mixed fuel engines such as biofuels."

Source: Telegraph.co.uk

[MasterDon]

damn!!!...changing the plugs was the only thing i was good at...somehow i dont see myself changing lasers...LOL

[Supra_Natural]

VW to pay $11.28 billion for all of Porsche: report

FRANKFURT (Reuters) - Porsche SE's controlling families will agree on Thursday to accept an offer by Volkswagen to buy its sports car business Porsche AG for roughly 8 billion euros ($11.28 billion), Der Spiegel reported on Saturday.

Germany's leading weekly magazine wrote that the rival Porsche and Piech clans, which own 100 percent of Porsche SE votes, will approve the two-stage takeover at a supervisory board meeting on July 23.

Volkswagen would purchase a 49.9 percent stake in Porsche AG and at a later date acquire the rest, in a deal that would create an integrated automotive group with 10 brands under the leadership of the Wolfsburg-based carmaker.

The sale would help Porsche SE pay off most of its debt, which two sources told Reuters has ballooned to considerably more than 10 billion euros.

Der Spiegel also said embattled Porsche SE and Porsche AG Chief Executive Wendelin Wiedeking is negotiating over a severance package that could total more than 100 million euros. In the meantime, production chief Michael Macht will replace him as head of Porsche AG, the magazine reported.

On Thursday, Wiedeking rejected speculation he was about to leave the group.

Asked on Saturday whether the two families have reached a decision for the July 23 board meeting, Porsche spokesman Anton Hunger said "we have not been informed of one," adding that the Spiegel report was speculation that the company would not comment on.

Separately rival German weekly magazine Focus reported that Volkswagen's powerful chairman and part-owner of Porsche, Ferdinand Piech, plans to remove Wiedeking on Thursday from the influential six-man steering committee on the VW supervisory board.

The vacancy could open up the opportunity for Piech's cousin and rival, Wolfgang Porsche, VW supervisory board member and Porsche SE chairman, to replace Wiedeking in the committee as a representative of his side of the family.

The grandfather of Wolfgang Porsche and Ferdinand Piech was Ferdinand Porsche, designer of the Beetle and founder of Volkswagen.

(Reporting by Christiaan Hetzner; Editing by Victoria Main)

Source: Reuters

[Devinda_Z]

Autos November 11, 2009, 10:50AM EST

Subaru: Japan's Hottest Car Company

As rivals watch their U.S. sales slide, Fuji Heavy Industries' Subaru is heading for a record year

By Ian Rowley

Over the years, Subaru, the automotive unit of Japan's Fuji Heavy Industries, has carved out an image as a carmaker that goes its own way. While larger Japanese rivals have won plaudits for building reliable but sometimes dull cars, Subaru has specialized in making sporty all-wheel-drive cars and SUVs powered by turbocharged boxer engines.

In 2009, Subaru is standing out from the crowd for another reason: Unlike most other automakers, it's enjoying hot sales. Through the end of October, Subaru sold 176,000 cars in the U.S., a rise of 13% on a year earlier. That's all the more impressive given the slump of the wider market, which is down 25%. What's more, among automakers that have sold more than 20,000 vehicles, only Korea's Hyundai and its subsidiary Kia—both benefiting from the weak Korean currency—have expanded sales at faster clips. "You might be surprised to see such drastic improvement in results," Ikuo Mori, Fuji Heavy's president said at press conference on Nov. 2. "We've got some good cars."

For the timing being, expect Subaru's hot streak to continue. Mori has increased Subaru's annual sales forecast by 37,000, to 548,000 vehicles, and now expects to record sales of 204,000 in the U.S. Like all Japanese exporters, Subaru is still hampered by the strong yen, but the company at least expects a small operating profit for the six months through March 2010. It previously projected a $390 million loss.

New Legacy and Outback models

What explains Subaru's performance? It helps that it has replaced most of its lineup. It launched new versions of its Legacy sedan and Outback SUV this year; last year it launched a new version of its Forester SUV; and in 2007 it brought out the latest version of the Impreza compact. As a niche player with around 2% market share, Subaru may also be benefiting the practical appeal of its midsize Legacy and crossover SUVs, which inspire strong customers' loyalty. "Consumers are rushing to practical and useful cars. That's what Subaru is producing," says Mitsuru Kurokawa, senior market analyst at IHS Global Insight in Tokyo.

Fuji Heavy executives, though, can claim some smart moves. Masatsugu Nagato, the executive in charge of overseas operations, points to factors that are spurring growth. Under Mori, he says, the company is making cars in tune with international customers and especially those in North America, which account for about 45% of unit sales. Until recently, analysts say, Subaru often developed with Japanese customers in mind or tended to produce cars that engineers thought would sell. "We have to make cars which customers want and, from our point of view, the U.S. remains the most promising market," says Nagato.

These days the company is certainly listening. For instance, during the redesign of the new, fifth-generation Legacy sedan, Subaru conducted online surveys and interviewed customers and owners of other brand cars. The upshot? The company made a more luxurious model that's taller, longer, and wider; its extended wheelbase helps provide an extra four inches of rear-seat legroom. Reviews have been positive, with Consumer Reports rating the new Legacy "excellent."

It is a similar tale with the recently introduced Forester and Outback models, which are larger than predecessors and, like the Legacy, winning plaudits. In 2008, Motor Trend magazine made the Forester its SUV of the year. This year, it gave the Outback the same award—the first time one automaker had bagged the prize two years running.

Subaru Love

Still, it's not all about the cars. Savvy marketing is also helping. In the fall of 2007, Subaru handed its U.S. ad account to Minneapolis agencyCarmichael-Lynch. The agency created a campaign built around the strength of emotional ties between Subaru customers and their cars, including print and TV commercials and a "SubaruLove" Web site where Subaru owners write about their affections for their Forester or Impreza. As part of the launch of the new Legacy, one stunt even involved passersby in New York, Los Angeles, and Chicago being asked to run their hands along a car hooked up to an eight-foot-high "love-meter." That might sound corny, but there are signs the company has reached beyond its loyal core: While it made 17,000-plus sales under the cash-for-clunkers program, which ended in August, just 173 Subarus were scrapped. That suggests the large majority of people using cash-for-clunkers to buy a new Subaru had switched from a rival brand.

Overseas chief Nagato adds that Subaru has also benefited from moves to bolster the finances of its U.S. arm earlier this year. At a time when even customers with good credit histories were struggling to get a car loan, Subaru arranged credit lines with J.P. Morgan (JPM) and the state-backed Japan Bank for International Cooperation. That meant "neither we nor our consumers experienced any confusion," says Nagato, a former banker with Mizuho, Japan's second-largest bank. He adds that in 2010 Fuji Heavy hopes Subaru will increase its U.S. dealer count by 25, to 625.

For all that, there is plenty of work hard ahead. Fuji Heavy still expects to post a net loss for the full year. With 85% of its production at home—Subaru has just one plant, in Lafayette, Ind., outside Japan—the company is vulnerable to further strengthening of the yen. Fuji Heavy must also navigate a three-way tie-up with Toyota , which doubled its stake in Fuji Heavy, to 17%, in April 2008, and its small car unit Daihatsu. As part of the deal, Fuji Heavy will stop making 660cc minicars and instead sell Daihatsu minicars badged as Subaru. From 2011, Fuji Heavy will also build a new rear-wheel drive sports car, currently known as the FT-86, for and make a Subaru version.

Lacking a Hybrid

Industry watchers broadly welcome the changes, noting that Subaru is too small to do everything on its own, but warn that its brand could be watered down if customers perceive the cars as being engineered by Toyota. Some analysts also worry about Subaru's lack of hybrids and other environmentally friendly options. While on paper, the tie-up with Prius maker Toyota should help, combining Subaru's boxer engines with Toyota's hybrid system may be less straightforward in practice. "It's not an impossible thing to do, but it would probably be time-consuming and expensive," says Koji Endo, a managing director at Advanced Research Japan. "At the same time, Subaru has limited resources, and they cannot do everything themselves."

Then there's the challenge of replicating recent success in North America in other markets. Nagato says he is keen to expand sales in China, which will overtake the U.S. as the world's biggest auto market this year. The signs are positive: Sales in the Middle Kingdom increased 81% through September, to 24,000 vehicles, and should reach a record 35,000 by the end of the year. But every Japanese-made Subaru car Fuji Heavy exports to China incurs a 25% import tax, making it far harder to compete with Toyota, Honda (HMC), and other rivals, which are producing locally with joint venture partners. Nagato admits the company may have to build cars but says it is difficult to justify a factory unless they can sell at least 60,000 to 80,000 cars a year. "My impression is that cars that appeal to American customers will be loved in China, too," he says.

Rowley is a correspondent in BusinessWeek's Tokyo bureau

Source : http://www.businessweek.com/print/globalbi...1111_789023.htm

[virensti]

Autos November 11, 2009, 10:50AM EST

Subaru: Japan's Hottest Car Company

As rivals watch their U.S. sales slide, Fuji Heavy Industries' Subaru is heading for a record year

By Ian Rowley

Source : http://www.businessweek.com/print/globalbi...1111_789023.htm

Sweet!! Now if only they come back into WRC..