The German carmaker said it would pay $250m for a 10 per cent stake in Kamaz, the Russia truckmaker, much less than the 42 per cent originally sought

For leading auto industry forecasting firm CSM Worldwide, the Detroit-3 is already the Detroit-2. At a gathering of the Automotive Press Association in Detroit today, the firms chief of forecasting Michael Robinet said, Chrysler doesnt have the scale to survive. Robinet and his partners posited that the only pieces of Chrysler worth saving going forward are the companys unique platform modelsminivans, Jeep Wrangler and perhaps the pickup truck business. The firm also noted that the companys dealer network should be attractive to a foreign automaker, which, if acquired, would wind down Chryslers models and start to introduce its ownthink one of the Chinese automakers. One of the more disturbing reports from CSM was that with auto sales dropping to 11 million or so next year, capacity utilization among the companies will be about 50%. Ouch. Thats down from around 75%. The ideal, of course, is between 90% and 100%. The drop in utilization is because the planst arent closing fast enough and because slow-selling models havent been cancelled fast enough. Case in point: Chrysler operates a plant in Sterling Heights Michigan that turns out Chrysler Sebrings and Dodge Avengers. Last month, Chrysler sold only about 4,200 Chrysler Sebrings and Dodge Avengers. Through November, those two models only sold 106,000. The assembly complex is 3 million square feet and 286 acres. I dont have the current employee level. But in March 2007, it was carrying 4,500 workers. That's the kind of capacity removal that the UAW is going to have accept without condition if they still want to have an industry. The Sebring and Avenger, developed by Daimler have been hopeless. They languish at te bottom of almost every third-party measurement of quality and consumer appeal. It's not the UAW's fault that the designs and executions of these models were botched. But there it is. And here we are. Another interesting point raised by CSM: By 2011, after planned plant closures by the Detroit-Two and Chrysler, the U.S. auto industry will account for a minority of U.S. vehicle production. Today, its about 54%. In a couple of years, they will be down to 46%. The CSM report and partners also pointed out an incredibly obvious point that is worth making again while the Congress debates whether to let the domestic auto industry take its chances in bankruptcy court. CSMs Eric Fedewa, who is the firms power-train expert, made the point that very few members of Congress care about; that Japan and Germany have created an industrial policy in their countries that creates stability in their marketplaces for energy prices. If we had gas prices [a price floor] between $3.50 and $4.00, we would see more stability in the marketplace to allow for better product planning, innovation and technology investment. Case in point: If the U.S. had a policy that our partisan, dysfunctional Congress could get behind, the U.S. industry wouldn't have over-committed to making SUVs in the late 1990s and in the first few years of the new century. Fedewa called Congress's approach to policy-making "ad hoc" and seat-of-the-pants." He was being generous.  read more »

Daimler has said that it wants to talk to unions about potentially reducing working hours at four German Mercedes-Benz assembly plants.

Lewis Hamilton was the special guest at the traditional final event of the Mercedes-Benz motorsport season in Germany recently.The Vodafone McLaren Mercedes driver and formula one world champion starred at the Stars & Cars Day in Stuttgart, which was attended by 72,000 Daimler employees and motor sport fans.World Boxing champion Vitali Klitschko was among the [...]

If you make prestige products that come with a hefty price tag, you might well be feeling a bit nervous at the moment. Here in Britain you can buy a great big fully loaded three-year-old Mercedes luxobarge for the price of a bag of sugar. Horrific residuals are a part of an unfolding story that looks set to get worse in 2009.

What do you do if you're a bit typecast with product that isn't all that fashionable in credit crunched and energy cost conscious times? In Munich and Stuttgart they have long known that they need to have a strategy in case the market moves away from large, high-margin premium cars. Make hay while the sun shines, but have a plan for when it doesn't and don't have all your eggs in the premium car basket. There are other tricks to perform that can act as a kind of hedging for when bad times come.    read more »

When in Ulm...for just 19 cents a minute you can hop in a Smart Fortwo and explore the city.

Things must be getting pretty serious when major rivals sit down to discuss combining forces in procurment. But there are signals coming out of Germany suggesting that BMW and Daimler are doing just that. The idea is that they max out on scale economies (and maybe screw suppliers' prices down) on universal/commodity parts that don't impact branding. Bigger volume equals lower unit cost. There's no official statement yet, so maybe an agreement has not yet been finalised. Some suppliers may well view this development with a little concern.