UK Automotive Industry News from just-auto.com

It would seem that negotiations between Magna and GM have hit some choppy waters. GM is reportedly concerned over giving away too much technology to Magna and a prospective Opel/Vauxhall Mark 2 with its Russian connections. There's also the issue of carving up territories for future Opel sales. GM is wary of creating a monster that hurts its own future chances in key markets.

Is the deal really moving towards being off? I somehow doubt it. The German government is still right behind Magna's bid and has already provided bridging finance and loan guarantees for Opel. Berlin is not seeking to fuel the press speculation about other bidders being invited back to the table, though it has been acknowledging that we don't have a done deal yet.

But it looks like there has been a bit of press manipulation emanating from Detroit. Anonymous sources said to be close to events are popping up everywhere. By creating the impression that the deal is far from done and that other bidders are very much in with a chance, GM puts added pressure on Magna in the negotiations. But if the Magna consortium bid does unravel, a whole load more uncomfortable questions get asked about other bidders, Berlin has a heart attack and, apart from anything else, even more GM management time likely gets diverted to the Opel/Vauxhall sale. They have more than enough on their plates in the Ren-Cen at the mo.

The competition for Opel/Vauxhall is still not over, but Magna's consortium is still by far the front-runner due to its strong backing from Germany - government and labour unions. Marchionne may look on with interest, but his bid caused much consternation in Germany before and would do so again. If holding company RHJ has really improved its offer, it may well get a hearing, but it should be wary of being 'used' by GM as a lever to chivvy Magna. Oh, and by the way, RHJ has just posted a big loss suggesting it's perhaps not really in position for anything more than a small role or stake. Beijing Auto? I don't think so.

That said, if a seismic shift is coming, and Magna is really on its way out, expect an announcement very soon. Time is short. The German government needs to be on-side. And Opel is already eating into bridging finance. 

US/GERMANY: GM eyes Opel deal with RHJ - report

Are relatively mature car markets going to become fertile ground for highly specified small cars? It is perhaps a niche that has proven difficult to crack for manufacturers in the past. The Mercedes A-class, Daimler Smart and Audi A2 spring to mind. Each of those had a rough ride - for different reasons, perhaps - but the highly specced small car area is one to be treated with care.

BMW handled it well with Mini, but that success based on a modern take for a retro-brand is something of a special case and perhaps serves as a lesson on how difficult it is to hit the premium small car sweet spot.

However, markets change and it could be that the market environment is becoming better for well specified small cars. The regulatory/tax framework in urban areas, volatile/high fuel prices and changing societal attitudes to vehicles generally are all perhaps pointing towards higher sales of small cars.

And a proportion of the 'new' consumers who consider small(er) cars will want something comfortable and relatively highly specified. In the future, the argument goes, the small car area will be less dominated by low-cost driven 'econoboxes'.

In this context, Toyota's initiative with its IQ small car is certainly an interesting one. The car has attracted some flak on the basis of its relatively high price, but some people will be prepared to pay a little more for something that isn't a low-cost Aygo. There are discrete customer sets for those two small cars with their different prices, spec and 'feel'.

Things can get even more interesting when considering 'sub-brands', which is a part of Toyota's strategy with IQ.

Even more intriguingly, Toyota is planning a collaboration with Aston Martin for a 'luxury commuter vehicle'.

As ever, execution and properly aligning brand values with the product proposition and price will determine how successful future products will be. Is this a step too far for Aston Martin? Maybe not, but it is a gamble. If they get it wrong, it would be an expensive mistake with adverse consequences for brand image. At least they are trying new things and I think that is to be applauded. Collaborating like this also keeps costs down for Aston while Toyota gets an association that is potentially very positive indeed.

But the really big question is a great big fat unknown: just how many people out there will opt for a highly specced small car?

BELGIUM: Toyota gives Aston Martin an iQ boost

We have just passed something of a milestone here. I hope it doesn't sound too introspective, but our online database of news and feature articles, all sequentially numbered, has just ticked over the 100,000 mark.

That's a pretty big archive of material and hitting a milestone like that has caused us to stand back and pause for a moment's reflection.

Phew, 100,000 articles on just-auto. That's a big number. If you printed all those articles out and laid them end to end, they would stretch all the way to the moon.

Okay, I obviously made that up, but let's get the old calculator out...

Let's make the assumption that each one, on average, when printed out, takes up a single sheet of A4 paper. A single sheet of A4 is 297mm in length. That means, according to my calculator, those 100,000 sheets would stretch to 29,700 metres which is 29.7 kilometres (18.4 miles). Travelling east, that would get you from London to Southend for a paddle in what passes for the sea in the Thames estuary. Not quite as impressive as a paper chain that gets to the moon, I know, but that's some distance.

Anyway, it's a lot of articles since we began operations way back in 1999.

Myself and deputy editor Graeme Roberts have been here at our desks and out on assignment since 2000. Many of the journalist/analyst/research editorial contributors on just-auto have been with us since then also. The time has flown by and it's been a blast from the outset. Even in these tough times - our duty is to report and analyse, but when the industry feels pain, we quietly empathise with those affected - there's so much to keep us fascinated, so much to write about and to consider. The automotive industry is constantly buzzing and there's never a dull moment, as they say.

We will raise a mug of tea to just-auto and all those who sail - or have sailed - in her, colleagues past and present. And of course, we don't forget the people like you who read our publication and keep us in business.

Below is a link to just-auto article number 100,000 (you can see that milestone number in the URL).

Cheers!

Delphi has now been in Chapter 11 in the US for almost four years and its attempt to exit at the beginning of the year was scuppered by the economic downturn. If it had come out, it might well have gone in again this year (it is rather wonderfully called 'Chapter 22' when you go in twice, Rob Golding tells me).

A new proposed exit deal calls for Delphi to sell four US parts plants and its steering business to former parent GM. Most of Delphi's remaining assets would be sold to Platinum Equity.

A number of lenders - hedge funds - are pretty unhappy at what they will get out of it. A competing bid could come in but I doubt the proposed deal, supported by Obama's taskforce, will be seriously endangered. If this deal comes undone GM potentially gets another major headache it can do without.

Was the deal a bit of a stitch-up though? Sounds like it might well have been.

US: Lenders oppose planned Delphi sale