Sleuth: The Week of October 12

Hot off the press!

GM, Chrysler talk merger: Well, well. The last time the Sleuth wrote about The General discussing alliances with other car companies, Chrysler was part of DaimlerChrysler and the world was a different place. At that time it was about “synergies.” Now it might be out of necessity. The word out of the Motor City is that Chrysler and GM are discussing a possible merger that could involve Cerberus Capital Management Inc. (owners of Chrysler) taking over GM’s remaining minority stake in GMAC financial. In exchange, GM would take control of Chrysler’s automotive operations. What could this mean? Dealers might be cut and so could back-office operations, but it’s tough to see where either side would get much of an advantage. The Sleuth doesn’t quite get it, but it would appear that tough times mean that anything and everything is on the table . . . and for sale. And Cerberus certainly appears to want out of Chrysler. Stay tuned.

Is Mazda for sale?: North America’s automakers are trying to get out of some of the deals that seemed perfectly reasonable not that long ago. The latest is Ford’s possible sale of its 33.4 percent stake in Mazda, worth about $1.36 billion. As you might recall, Ford recently sold its Aston Martin, Jaguar, and Land Rover brands in an effort to raise some cash. However, many of Ford’s products are tightly linked with Mazda as the companies share platforms for a number of vehicles, and development on a number of vehicles have been joint projects. If Mazda is sold, that would leave Ford with the usual Mercury/Lincoln brands . . . and Volvo.

In the case of AMG, hybrid means hotrod: It might be hard to imagine an environmentally friendly vehicle sporting the Mercedes-Benz’s AMG badge, but that reality doesn’t look like it’s in the too distant future. In an interview with Car Magazine in the United Kingdom, AMG boss Volker Mornhinweg revealed that the performance division was working on a hybrid model that will most likely be unveiled by the end of 2010. “Although hybrids normally mean more weight, we’ll use our knowledge of lightweight material to offset this increase,” he told Car. “And don’t forget, AMG is all about torque, and electric engines develop their torque at standstill.” The upcoming hybrid is expected to improve fuel economy by about 30 percent when compared to the company’s current 6.2-liter V8.

Don’t forget the Honda S3000: With so much attention focused on Honda’s next-generation Acura NSX, it’s no surprise the future of the S2000 has been a topic largely ignored in automotive circles. But rumors are beginning to circulate about a possible S2000 successor, tentatively named S3000. The car would have dramatic new styling, however, the new model will stay true to its predecessor’s lightweight construction and tight proportions. Honda is definitely trying to make it more competitive in terms of styling and comfort. Although it will remain a purist roadster at heart, the S3000 will be a little more robust. The new sports car is expected to arrive in 2009 along with the next NSX. The question, of course, is what will both models carry for firepower under the hood?

Aston will revive Lagonda: Does the world need another luxury-car brand? Maybe. Maybe not. But that isn’t stopping Aston Martin from moving forward with plans to revive its dormant Lagonda nameplate by 2012. Two models are already earmarked for production and will ride on Aston’s VH platform, but they should have a different personality from the British brand’s current lineup. Whereas cars such as the Aston DBS focus on performance first, the Lagonda models will be more like Bentley’s offerings, focusing on luxurious cars that can go fast.

Market indicators

Luxury production: Two signs that the auto world is not in a great place: Toyota downsizing expectations for next year; and luxury automakers cutting production. The latest is that BMW announced it will halt production at some of its German plants. As with most of the world’s automakers, including Mercedes-Benz and Lexus in Europe, BMW is rolling back production to keep pace with the slumping global market. In all, BMW plans to cut about 25,000 vehicles from its production schedule in 2008, roughly two percent of its total production from 2007. With the automotive industry expected to face further declines in 2009, this probably isn’t the last we’ll hear from luxury automakers about cuts.

Going really, really small: Toyota’s upcoming iQ city car is slated to become the foundation for several new Toyota vehicles in North America, but could the diminutive Smart-Fortwo-fighter find a home for itself here? While it remains to be seen if such a small offering could make it, Toyota has reportedly decided to give it a go. The tiny iQ will hit the market in Europe and Japan late next year, but a North American launch might not be far behind. Toyota will sell the iQ under its Scion brand. In fact, Motor Trend magazine reports that we can expect to see the iQ in Scion clothes as early as November’s Los Angeles Auto Show. Mini is also talking about going to a smaller vehicle, as is General Motors and Ford, with more European products.