Cerberus after all of Chrysler

DETROIT–Maybe Daimler wants to cut its losses on Chrysler, or Cerberus Capital Management wants to own the U.S. automaker outright. Whatever the motivation, the companies confirmed Wednesday that talks are under way for Daimler to sell its remaining 19.9 per cent stake in Chrysler to the private equity firm.

Neither side would give further details, except Cerberus said it approached Daimler and if the transaction is successful, "all existing industrial relationships between Daimler and Chrysler would continue.''

The talks, reported earlier Wednesday in Germany's Manager Magazin, come amid a crisis in the U.S. auto industry with falling sales, billions in losses and a dramatic market shift away from trucks and sport utility vehicles to small, fuel-efficient cars. Chrysler LLC's U.S. sales are down 24 per cent through August, the worst performance of any major automaker.

Analysts say it's a good time for Stuttgart, Germany-based Daimler to bail out, but it may be a bad time for Cerberus, which already is overexposed to U.S. economic problems, to spend more money on a losing operation.

"I can see why Daimler would want to exit," said Mark Warnsman, an auto analyst with Calyon Securities. "The only reason I could think that Cerberus would want more exposure is they're getting a very attractive price.''

Cerberus Capital Management LP bought 80.1 per cent of Chrysler from Daimler AG in August 2007 in a $7.4 billion (U.S.) deal. The sale ended a stormy nine-year partnership between Daimler and Auburn Hills, Mich.-based Chrysler, though the companies have continued to share diesel-engine and other technology.

Aaron Bragman, an auto analyst with the consulting company Global Insight, said Daimler may no longer want to deal with continued losses at Chrysler. Cerberus may want to buy the whole company to make reselling it easier, or a clause in the 2007 sale contract could be forcing Cerberus to buy Chrysler's stake under certain conditions.

"We can't imagine that Cerberus has a lot of free cash on hand to do this," Bragman said. "That kind of makes us think it was something they were forced into doing.''

Cerberus, he said, has been taking hits on its investments in Chrysler and GMAC, General Motors Corp.'s former financial arm, which has posted huge mortgage losses.

As a private company, Chrysler does not have to report its earnings, but reporters and analysts have been able to calculate Chrysler's performance from Daimler's financial statements. The German company's results last month showed that Chrysler lost an estimated $510 million in the first quarter. Chrysler lost $1.6 billion in 2007.

Buying 100 per cent of the company would make Chrysler's earnings completely private, but Bragman said the privacy wouldn't be worth the price of buying Daimler's stake.

Top Chrysler executives told their dealers Tuesday that the company has lost $400 million this year. Chief Executive Bob Nardelli and Vice Chairman Jim Press used a satellite feed to address dealers who gathered in movie theaters across the country for a three-hour presentation on the state of Chrysler's business and future products.

Chrysler spokesman Stuart Schorr would not comment on what was discussed with dealers, but said the company has only talked about its performance for the first half of the year.

"There was no new financial information announced yesterday,'' he said.

The Chrysler executives, according to a dealer who saw the presentation, did not state the time frame for the $400 million loss, nor did they say if it was an operating or net loss. The dealer did not want to be identified because the meetings were private.

Chrysler also issued a statement in the past saying it lost $400 million in the first quarter.

Chrysler's losses, while still murky, appear to be puny when compared with its two U.S.-based competitors. Ford Motor Co. posted a net loss of $8.6 billion in the first half of the year, while GM's first-half net loss was $18.8 billion.

Efraim Levy, a senior industry analyst with Standard & Poor's, said in a note to investors that the value of Daimler's stake in Chrysler has dropped. He maintained a "Hold" recommendation on Daimler shares.

"Given the materially weakened automotive retail environment, sharply lower Chrysler sales volume, and decreased valuation for publicly traded U.S.-based automakers since the 2007 transaction, we think DAI's Chrysler stake is worth much less now than it was at that time," Levy wrote. "However, we see little advantage in DAI keeping the minority interest.''

Saab Turbo Back in Black

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Introduction
Saab's 9-3 might be getting a bit old, but the limited edition Turbo X edition underlines that there's a driver's car trying to get out. Built to commemorate three decades of Saab's commitment to turbocharging, the Turbo X delivers its 276bhp turbocharged punch through a new XWD four-wheel drive system and revised sport chassis. A discreet styling makeover gives the 9-3 Turbo X some subtle aggression - just enough to show it means business without the overblown looks of some sports saloons and estates.
What are its rivals?
As ever Saab bridges the mainstream and premium categories. In Turbo X guise key rivals include cars like Audi's A4 3.2-litre quattro S line, BMW's 330i, the Mercedes C350 and even a curve-ball choice like the Alfa Romeo 159 3.2 V6 Q4. The Saab out-guns all on the power stakes, its 276bhp giving it serious pace. Sixty two arrives in just 5.4 seconds, which is comfortably quicker than any of the rivals listed; as a demonstration in turbocharging there's no denying the Turbo X is very effective.

How does it drive?

It's all well and good having all that power, but Saabs have traditionally trailed the competition when it comes to dynamic prowess. The Turbo X is different. That's thanks to the new XWD system, which intelligently distributes power to where it's most needed. Crucially it has been set up with drivers in mind, meaning it gives rear bias through corners and endows the 9-3 with the sort of ability it should have always had. Saab has even fitted the Turbo X with an electronic limited-slip differential. The steering is meaty in its weighting too, though there's precious little feel. Push hard and the Turbo X will eventually understeer, but grip levels are high and its balance largely neutral unless you're carrying lots of speed. It all feels very surefooted and competent, Saab achieving this without ruining the ride quality.

The engine is quite a unit. Quiet most of the time, there's a slightly menacing roar when it's pushed, and the turbocharged power delivery is very linear. There's not much in the way of lag either, the rich torque on offer making the Turbo X an easy, yet pretty devastatingly rapid, machine. A more mechanical feeling gearchange would be good, but otherwise the Turbo X is a surprisingly enjoyable car to drive.

What's impressive?

The discreet looks and searing pace appeal hugely. The Turbo X feels very surefooted, and the interior is a great place to be. It's slightly old fashioned, but Saab's continuity of features such as the neat 'Nightpanel' that blacks out all but the speedometer lighting at night is brilliant. You'll never tire of fiddling with the direction controls for the air vents, either. Space is good for passengers and luggage, the Turbo X managing to be a useful and very fast family car. A huge part of its appeal is also simply the fact that it's not a BMW, Audi or Mercedes; it's more individual. However, in Turbo X guise you don't pay for that individuality with lacklustre performance or poor dynamic ability. Quite the contrary - the Turbo X is a hugely entertaining choice.
What's not?
Some of the neat interior touches like the old-school turbo gauge that's reminiscent of Saabs of old are very cool, but Saab should have stopped there. The welcome note flashing up saying 'Prepare for take off' that can be further personalised with your name by your Saab dealer is just plain tacky - not the cool, sophistication we'd expect in a Saab. The interior is feeling a little old as well and the chrome strip along the top of the instrument binnacle reflects badly in the windscreen. Fuel consumption can be a bit nasty, especially as you'll find yourself pushing that turbocharged V6 hard - forget getting anywhere near the quoted 26.4mpg.
Should I buy one?
There's a lot to like about the Saab 9-3 Turbo X. Some old school Saab details like the turbo gauge are cool, and the performance is pretty special too. Discreet but assertive looks also appeal, as does the fact that the Saab isn't one of its more obvious rivals. An individual, interesting choice that's also hugely entertaining, the Saab Turbo X is the sort of car the Swedish firm should always have built. It's not cheap though; add all the extras of our test car - kit like satnav, leather, electric seats and 19-inch alloy wheels - and the list price of £32,600 rises to £38,205. Try one and you might just buy one though, as the Saab 9-3 Turbo X is an appealing choice.
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Lexus aims to conquer globe with luxury sales

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When Toyota Motor Corp. shipped the first Lexus cars to California in 1989, most Americans were underwhelmed by what looked like made-in-Japan versions of Mercedes-Benz sedans.

"Back when it started, there were a lot of questions whether Lexus would work or not," said Dave Illingworth, a senior vice president at Toyota who was in charge of Lexus when the brand was introduced.

Within 11 years, Lexus' emphasis on delivering reliable cars and pampering customers turned it into the best-selling luxury nameplate in the United States. Now Toyota hopes to repeat that success around the world and transform the premium brand conceived for the U.S. market into a global luxury nameplate to rival the leading German marques Mercedes and BMW, whose global sales are roughly twice that of Lexus.
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Toyota has invested billions to expand and refine Lexus' lineup of cars and SUVs. Its engineers and designers are injecting more glamour and power each time a model comes due for redesign.
Most industry experts are betting that Toyota will succeed in establishing Lexus among the top marques. "They have that very good combination of advanced technology, excellent build quality and they're getting better on design," said Jack Nerad, editorial director at Kelley Blue Book.
But so far, the results of its global push are mixed.
In some of the most promising, fast-growing markets such as Russia and China, Lexus is off to a roaring start.

But it has been slow to gain traction in key regions, including its home market, Japan, where the brand sputtered after a grand introduction two years ago. Lexus missed its sales targets in Japan in 2005 and 2006, and demand is only now picking up after the rollout of a redesigned flagship LS sedan.

The biggest challenge, however, is Western Europe, the world's No. 1 luxury car market and home of the oldest premium marques. Last year, Lexus sold fewer than 37,000 vehicles in Europe -- a market comparable in size with the United States, where Lexus sold 322,000 cars and crossovers.

"It's not that easy to export the Lexus concept," Michael Ganal, BMW's sales chief, said in an interview earlier this year. "Lexus is made for the United States."

Americans prize comfort, reliability and attentive service -- the hallmarks of the Lexus brand. The Japanese revere heritage. Europeans want innovation above all, says Christoph Stürmer, Frankfurt, Germany-based auto analyst for Global Insight and co-author of the book 'Premium Power' about the German luxury car industry.

That poses a dilemma for top executives at Toyota's Aichi headquarters in Japan and at its U.S. sales operations in California: Should Lexus be adapted to each region or do they strive to refine one global identity for the brand?
Yuki Funo, a member of Toyota's board and the automaker's top manager in North America, said he believes Lexus should have one global identity.

"If we apply a lot of localization, we may be able to increase volumes faster, but that's not the right approach," he said in an interview. "We have to maintain the identity of the brand. That's different from Toyota, which should be localized. Lexus should be global."
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Extreme performance: Mercedes C63 AMG based Brabus B63 S

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The Mercedes-Benz C63 AMG isn’t a car to be taken lightly, as Jeremy Clarkson of Top Gear said, you’re happy to be alive when you get out of it, and it’s power (457 hp with 600 Nm developed by a 6.2 litre V8) demands respects. But the guys from Brabus thought that the V8 is capable of much more and started tuning it, by adding some high-performance metal catalysts, special sporty air filter and a reprogrammed ECU, all these lead to an increase of performance to about 530 hp with 650 Nm, or 479 lb-ft.

This new power increase translates in a 0-62 mph or 100 km/h time of 4.1 seconds, in constrast with the stock 4.5 time. Two versions of this upgrade are available, one capable of making the car go to 300 km/h and another to 315 km/h, or 188 and 197 mph respectively, this is based on the version of Vmax unit you order. Besides this upgrade, Brabus have already developed quite a few accesories for the C63, like limited-slip differentials or height-adjustable suspension. But enough of the data, here are the photos of this gorgeous model, enjoy! Read More: "Extreme performance: Mercedes C63 AMG based Brabus B63 S"
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VW Polo BlueMotion: New Arrival

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The VW Polo BlueMotion has been -

Dragged kicking and screaming across the Irish Sea to Dublin. As soon as we returned from our epic Le Mans trip in the BMW long termer, all the dirty washing and damp camping gear was transferred to the Polo before heading back to Holyhead to catch a ferry to Ireland. I'll be driving the new addition to our fleet on Ireland's roads for the next couple of months, and I suspect it will fit in well on Dublin's crowded streets.

We're loving the -
Thrifty nature of the BlueMotion. Despite having to hurry to catch my ferry (seems to be a theme around here) and hauling baggage and camping gear, the Polo averaged over 50mpg on my first journey. That figure is thanks mainly to the longer gearing of this model over regular TDI Polos, but also in part due to slippery aerodynamics and narrow, low rolling resistance tyres.

If all that sounds like a recipe for a dull car, then think again, as the BlueMotion is actually better looking than any of the regular models in the Polo line-up thanks to its lower ride height, lightweight alloy wheels and the aerodynamic body kit that also manages to look sporting.

But not so impressed by -


Refinement. It may be a little unfair to compare the Polo to the significantly more expensive BMW Coupé I was driving, but immediately the Polo feels of lower quality and more raucous. Hopefully the effect of moving from one car to another will wear off quickly, as I intend to use the Polo a lot over the coming months and on paper at least, the fuel economy paybacks should more than make up for any other compromises.

We're looking forward to -
Seeing if the BlueMotion raft of changes can live up to the hype when being used in everyday life. Though I will travel further afield occasionally, it is likely that the Polo will be used mostly as a city car for a while, so it will be interesting to see how I cope with the high gearing in particular.

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GM Releases New Chevrolet Volt Teaser Photos

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After a few days ago we got the chance to see a sneak peek, today GM released the first teaser photos of their Chevrolet Volt plug-in hybrid that will be available in 2010. The GM blog post also mentions that design was and is a very important part of the Volt development because the drag force can account for up to 20 percent of the energy consumed in an average vehicle.


From the photos we can get a pretty good idea of the Volt’s styling, with the rounded and flushed front fascia, tapered corners and closed grille. Like one of our readers pointed out, it reminds us a little of Saab design, but still, that doesn’t meanit doesn’t look good. Check out the other teaser photo after the jump. Read More: "GM releases new Chevrolet Volt teaser photos"
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