Mercedes Benz settlement in attempts to make bribery case go away

Here is a story from the BBC regarding the $185 Million Daimler Benz bribery settlement. It seems the Mercedes Manufacturer has been busted for giving kick backs and bribes to win multiple foreign accounts.

Daimler agrees to pay $185m after admitting bribery

German carmaker Daimler has pleaded guilty to corruption in the US and will pay $185m (£121m) to settle the case.

The charges relate to US Justice Department and Securities and Exchange Commission investigations into the company's global sales practices.

Daimler, the owner of Mercedes-Benz, admitted to paying tens of millions of dollars of bribes to foreign government officials in at least 22 countries.

The company said it had now reformed the way it did business.

The offences were committed between 1998 and 2008 by Daimler's German-based exports subsidiary Export and Trade Finance, and its Russian business Mercedes-Benz Russia.

"Today, we are a better and stronger company, and we will continue to do everything we can to maintain the highest compliance standards"
Daimler chairman Dieter Zetsche

They were said to have given money and lavish gifts to help win contracts in countries including China, Russia, Thailand, Greece, and Iraq.

The Justice Department said that by "using offshore bank accounts, third-party agents and deceptive pricing practices, these companies saw foreign bribery as a way of doing business".

Daimler has since fired 45 employees implicated in the bribery.

The company's chairman Dieter Zetsche said the firm had "learned a lot from past experience".

The case was heard in a federal court in Washington, where the presiding judge, Judge Richard Leon called the financial settlement a "just resolution".

Prosecutor John Darden added that Daimler had "showed excellent cooperation".

"The company has undertaken an effort to clean its own house," he added.

"That reflects a serious change of mind on part of Daimler. This deserves credit."

Daimler's agreement to pay $185m is broken down into $93.6m to end the US Justice Department investigation, and a payment of $91.4m to settle the civil case from the Securities and Exchange Commission, the US financial watchdog.

The company made a 2.6bn euros ($3.5bn; £2.3bn) loss last year.

Back in 2008, German industrial group Siemens paid $800m to settle a US investigation into bribes paid to government officials in Argentina, Bangladesh, Iraq and Venezuela.

SWEDISH AUTOMAKER SAAB FILING FOR BANKRUPTCY

STOCKHOLM (AP) Saab has filed for bankruptcy protection and intends to split from its troubled parent company, General Motors.

GM had asked Sweden for government help for Saab but had to take 'no' for an answer.

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With no help forthcoming from Sweden's government, Saab has filed for bankruptcy protection. The goal is to split from its parent company, General Motors. GM says its exploring all options.
General Motors' subsidiary has filed for reorganization, a step taken to stave off bankruptcy protection.

General Motors' Swedish subsidiary, Saab, confirmed on Friday that it has filed for reorganization, a step to avoid bankruptcy protection, as the company seeks to pay down pending debt and return to profitability.

"I can confirm that Saab has filed for reorganization. It is not a bankruptcy situation. The aim is to have Saab as a freestanding entity," a spokesman for the firm told Forbes.

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SAAB is seeking funds from both public and private sources but will operate as usual with government funding during the reorganization process.

Under Swedish law, when a company files for reorganization, it means that it is looking for ways to raise capital to pay off debt. One of the solutions a company might consider is seeking a buyer to could acquire an equity stake.

The legal process will be headed by an independent administrator appointed by court as the company seeks funds from both private and public sources, TradeTheNews.com reported. Saab will operate as usual, with the central government providing assistance during the process, which will be executed over a 90-day period.

The Swedish government has categorically denied the possibility of buying equity in its struggling carmakers. "The Swedish state and taxpayers in Sweden will not own car factories," Industry Minister Maud Olofsson said on Wednesday. "Sometimes you get the feeling that [GM] is a small, small company, but it is the world's biggest automaker, so we have a right to make demands."

Saab builds fewer than 1 million vehicles per year, in contrast to Renault or Volkswagen, whose capacity ranges between 2 million and 3 million cars per year.

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Second-quarter revenue was $38.6 billion, down $5.6 billion from the year-ago period. Analysts expected $34.6 billion. Ford also announced that it will bring six European small car models to North America by the end of 2012 as it deals with a market shift from trucks to cars brought on by high gasoline prices. The company said it will retool the Michigan Truck plant in suburban Detroit, shifting its products from large SUVs to make global vehicles off the European Focus platform by 2010. The SUVs made at Michigan Truck — the Lincoln Navigator and Ford Expedition — will be shifted to the Kentucky Truck plant in Louisville, which makes Ford Super Duty pickups.

The company also will retool the Louisville Assembly Plant, which now builds the Ford Explorer midsize SUV, to produce vehicles on the European Focus frame, starting in 2011. The company had previously announced it would retool its pickup truck factory in Cuautitlan, Mexico, to build the Fiesta subcompact for North America starting in 2010. Ford also said its Twin Cities Assembly Plant in St. Paul, Minn., will continue producing the Ranger small pickup through 2011. The plant was scheduled to close next year, but Ranger sales are down just 4 percent in the first half of this year, versus 18 percent for the U.S. light truck market as a whole.

The company said its write-offs included $5.3 billion in North America and $2.1 billion for Ford Credit's truck-heavy lease portfolio. Chief Financial Officer Don Leclair said most of the write-down was triggered by the drop in value of the company's truck and SUV inventory and lease residuals. Ford reported a pretax loss of $1.3 billion in North America because of the deteriorating U.S. market and the shift away from trucks. U.S. sales overall were down 10 percent in the first half of the year, with Ford's sales down 14 percent.

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The company, though, continued to be profitable overseas, posting a $582 million profit in Europe and $388 million in South America. The company also made $50 million at its Asia-Pacific-Africa division.

"The second half will continue to be challenging, but we have absolutely the right plan to respond to the changing business environment and begin to grow again for the long term," President and CEO Alan Mulally said in a statement.

Ford said it does not expect a U.S. economic recovery to start until early 2010.

The company identified only three of the European small vehicles it will bring to North America: the Transit Connect small van, the European Focus and the subcompact Fiesta. Most will be built in North America, and Leclair said some might be exported. Ford already has announced that the Transit Connect will be imported from Turkey.

Ford said the other three vehicles would be identified later, including one that is unique within its segment.

Other possible vehicles are the Kuga small crossover, the C-Max small van and the Mondeo midsize car.

Ford also announced that the next-generation Ford Explorer midsize SUV will come out in 2010 and be built on car underpinnings, making it more fuel efficient than the current truck-based model. And it announced it will build a seven-passenger car-based crossover vehicle for Lincoln in mid-2009.

Volkswagon Anounces new Plant in Chattanooga

Volkswagen AG will build its first United States assembly plant in Chattanooga, reports said today.

Europe’s biggest automaker said it will put a nearly $1 billion investment in Chattanooga’s Enterprise South Industrial Park.

The new plant is expected to eventually create 2,000 jobs.

Volkswagen officials said the surging euro has pushed plans for a production facility forward. The 15-nation currency has been hitting record highs in recent weeks against the U.S. dollar, making goods exported from Germany more expensive in the United States.

Volkswagen recently moved its North American headquarters from suburban Detroit to Herndon, Va., outside Washington, to bring it closer to its East Coast customer base.

Volkswagen produces VW cars and trucks and also makes vehicles under the Audi, Skoda, Seat, Lamborghini, Bentley and Bugatti names.

Toyota Shifting Gears as demand for fuel efficient cars booms

Toyota Motor Corp. will build its Prius gasoline-electric hybrid in the U.S. as part of an overhaul of North American production driven by record-high gasoline prices.

The Prius, the world's best-selling hybrid, will be assembled in late 2010 at a plant under construction in Blue Springs, Mississippi, Toyota said in a statement today. That factory originally was to build the Highlander sport-utility vehicle.

The change mirrors U.S. consumers' rapid shift to fuel- efficient models and away from large pickups and SUVs as gasoline soars above $4 a gallon. It also eases production constraints on the Prius, now built mainly in Japan, that have left U.S. dealers with shortages of the car and an oversupply of its biggest trucks.

``They bet wrong on the truck market,'' said Jeff Liker, a University of Michigan engineering professor and author of ``The Toyota Way.'' ``They've been really good about not screwing up like that in the past.''

The company will consolidate production of Tundra large pickups at its San Antonio factory. The model currently is assembled in Texas and in Princeton, Indiana. The Princeton plant will suspend work on the Tundra and Sequoia SUV starting Aug. 8 until November. The Highlander will be shifted to Indiana.

American depositary receipts for the Toyota City, Japan- based automaker rose 50 cents to $91.98 at 10:54 a.m. in New York Stock Exchange composite trading. The ADRs have dropped 14 percent this year through yesterday.

First Decline Since 1995

Toyota's U.S. sales fell 6.8 percent in the first half, with trucks dropping 13 percent, pushing Japan's biggest automaker toward its first annual decline in U.S. sales since 1995. Toyota introduced a bigger, redesigned Tundra last year to increase its share of the U.S. large pickup market.

Bob Carter, general manager for U.S. Toyota brand sales, has said since January the company will sell about 170,000 Priuses this year, down from 181,221 in 2007, because of tighter supplies in the hybrid model's largest market. U.S. Prius sales last month plunged 34 percent to 11,765 from a year earlier and fell 3.2 percent in the first half.

Toyota had to make sure that there would be sustained demand for the Prius before moving production to the U.S., said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan.

``Toyota has come to the realization that this is not just a blip on the radar screen, but is a long-term trend,'' he said.

Ford, GM, Chrysler

Fuel prices have prompted similar changes at U.S.-based automakers General Motors Corp., Ford Motor Co. and Chrysler LLC, all of which rely on trucks for a majority of their U.S. sales.

Ford has cut output at truck plants, including a nine-week shutdown of a Michigan SUV factory, while assigning overtime work at another Michigan plant that produces the Focus small car. Ford's F-Series pickup was passed by Toyota and Honda Motor Co. car models as the top-seller in the U.S. in both May and June.

GM said it will close four North American truck factories and is reviewing whether to divest its Hummer brand of SUVs. Chrysler plans to close its Fenton, Missouri, minivan plant. The company also will cut to one shift production of its Dodge Ram pickup at another plant in Fenton. Production also has been temporarily suspended for several weeks at SUV plants in Detroit and Toledo, Ohio.

Automakers bring back Purchase incentives following dip in market

With gas prices high, a weakening economy and slowing demand, automakers will need incentives to lift sluggish automobile sales, automaker Chrysler decided Friday.

"Incentives will be a key part but the focus will shift on those products that are facing the headwinds, such as trucks and SUVs, rather than those benefiting from the tailwind like cars." said Chrysler LLC President Jim Press, according to Dow Jones Newswire.

Incentives, which can help raise sales numbers, are not always an automakers ally as they cut into the profit margins of their dealers.

Some of the major automakers began to phase out the buying incentives early this year and offset any reduced sales with expense reductions, choosing to keep plants idle rather than produce an inventory build up. With May auto sales down across the board, automakers are quickly shifting their philosophy.

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Employee price discounts have already been brought back by Ford for its F-series pickup trucks.

For the month of May, Chrysler had an average incentive per vehicle sold of $3,714, the highest among the major automakers.

US Hybrid Sales jump while overall car sales drop

A gallon of gas costs $3.57 cents in Quincy Tuesday. With gas prices soaring through the roof, we wanted to know how car companies plan to adapt.

Hybrid car sales are so popular at one car dealership in Quincy that it's nearly gone dry.

Shottenkirk Toyota only has four hybrid vehicles left on its lot. Three of them are Toyota Camrys, the other is the Toyota Highlander. Now they've completely sold out of all its Priuses, but they've ordered four more. Two of them have already been pre-sold.

Michael Hoxie, Shottenkirk Toyota, said, "the problem is the supply and demand thing, especially with the Prius because Toyota literally could sell every one they could build, they just can't build them fast enough."

If Michael Hoxie had it his way, the whole lot would be filled with hybrid vehicles.

So is there any down sides of owning a hybrid?

"Not that I've seen, they come with a 100,000 mile warranty on the power pack, we've had terrific success with them and when we occasionally trade for one, we almost sell one immediately, they've been great cars," said Hoxie.

They sold nearly 100 hybrid vehicles in 2007. The Camry and Prius are its two best selling models. Those cars have higher fuel efficiencies than a regular gasoline run vehicle. The Camry gets up to 34 miles per gallon while the Prius gets 48. Buying the hybrid 2008 Camry over the regular 2008 Camry will save you more than $1500 a year on gas.

So will car companies adapt to the rising fuel costs and produce more hybrids?

"We keep hearing rumors that they're going to build more and more but the demand is so high right now, it's really hard to quantify how many you could sell," said Hoxie.

While overall car sales in the U.S. have dropped, hybrid sales have increased.

Chrysler looking to Make Cars in China

Chrysler LLC is discussing joint ventures with a number of potential Chinese partners, including Chery Automobile, in a bid to return to producing vehicles at its own plants in China, executives said on Sunday.

The company aims to become one of the top 10 competitors in the industry's biggest boom market, they said.

"We're having discussions with several potential partners. Those discussions are ongoing," said Phil Murtaugh, who became chief executive of Chrysler's Asian operations last year.

Chrysler representatives also said the privately held No. 3 U.S. automaker was still working with Chery to modify one of its small cars so that it could be ready for export from China.

Murtaugh declined to specify a timeframe for concluding that work and clearing the way for what had been expected to become one of the first Chinese-made cars to be sold in large volumes in developed markets such as the United States.

"I don't think we're too far away, but neither of us is ready to say let's go yet," said Murtaugh, speaking to reporters on the sidelines of the Beijing Auto Show. "We're working to make sure the product's right."

Chrysler announced a tie-up with Chery last year as part of a bid to reduce its reliance on trucks and SUVs by giving it a subcompact car to sell under one of its own brands.

But when progress in readying the Chery-built vehicle stalled, Chrysler turned to Nissan Motor Co, and this month announced a production swap under which Nissan will build a subcompact in Japan using a Chrysler design starting in 2010.

Murtaugh said that Chrysler and Chery were reviewing safety-related issues such as body structure in order to ensure that the resulting China-built vehicle could be marketed successfully overseas.

"Safety is a huge challenge because of the size of the car," said Murtaugh, who joined Chrysler from SAIC Motor Corp, China's largest automaker and a joint-venture partner with General Motors Corp

Murtaugh said that the engineering work needed to ready the new small car was substantial but stopped short of a wholesale re-design. "We don't have to re-engineer the whole car," he said.

For its part, Chrysler sells a total of 12 models in China but only four of those are locally manufactured through joint ventures now managed by Daimler AG, which sold Chrysler to Cerberus Capital Management last August.

The Chrysler 300C sedan, two minivan models and a version of the Chrysler Sebring -- rebadged in China as the Borui -- are all locally manufactured in China. The rest of Chrysler's line-up, which is sold through a network of about 110 dealers, is imported to China, a step that drives prices higher in a market where vehicle prices are falling.

Murtaugh said Chrysler's high import ratio would have to change if the automaker was to realize its ambition of becoming one of the top 10 competitors in the Chinese market, now the world's second largest and widely seen as on track to become the largest over the next decade.

DOUBLE-DIGIT GROWTH

Murtaugh said he expected China's auto market would grow by between 15 percent and 20 percent this year. "We have to grow faster if we want to hit (the) top 10," he said.

Chrysler has made it a priority to increase the number of its dealers in China and to allow all of them to represent all three of its brands -- a step it is also taking in the slumping North American market, which still accounts for some 90 percent of its overall sales.

Separately, Murtaugh said Chrysler was looking to source "a lot" more components from China for cars sold around the world. Chrysler, he said, currently ships less than $1 billion in components from China out of a total procurement bill of between $25 billion and $35 billion.

He also said he was standing by a forecast that Chinese automakers would not be ready to export to the United States until sometime between 2010 and 2012.

Chrysler, which lost $1.6 billion in 2007, is counting on diversifying by selling into faster-growing emerging markets as part of a turnaround under which it has slashed production and jobs in the United States. The automaker has trailed its larger U.S. rivals Ford Motor Co and General Motors in establishing joint-venture production deals with Chinese auto partners.

Chrysler's Jeep brand had been in the first wave of such deals. AMC, which Chrysler later acquired, reached a deal in 1983 to build Jeeps in China with Beijing Automotive Works. That partnership was disbanded in 2003.

Three new eco-car projects approved

Thailand Wednesday approved granting tax privileges to automobile-makers Mitsubishi, Toyota and Tata to invest a combined 16.6 billion baht (536 million dollars) to produce more than 300,000 eco-cars for the domestic and export markets. Thailand's Board of Investment (BoI) Secretary General Sathit Chanchouwakul said the three companies would be ready to begin operations within two to four years.

Volkswagen, which has also submitted a proposal to produce eco-cars in Thailand, was not included among the approvals granted by BoI Wednesday.

The Mitsubishi project promised to invest 4.7 billion baht to produce 107,000 eco-cars in Thailand, 88 per cent for export, while Toyota will invest 4.6 billion baht to make 100,000 units by 2012, 50 per cent for export, and India's Tata Motor has pledged to invest 7.3 billion baht to make 100,000 units by 2010, of which 52 per cent will be exported.

The BoI - the government's investment promotion body which grants tax waivers to favoured industries - had previously approved similar eco-car investments worth 21.8 billion baht (703 million dollars) by Asian Honda Motors, Suzuki Motor and Siam Nissan Automobile, the local subsidiaries of Japanese auto multinationals Honda, Suzuki and Nissan, respectively.

Thailand, which already ranks among the world's top 15 auto exporters, is seeking to become a hub for manufacturing small, reasonably priced "eco car" models for both the domestic and export markets.

Under the government's policy, manufacturers who produce eco-car models in Thailand that meet the set requirements will be eligible for a cut on excise taxes from the current 30 per cent of the factory price down to 17 per cent, as of October 2009.

The projects will also receive BoI privileges, which grant tax exemptions on imported equipment and parts, plus tax holidays. To qualify for the tax privileges, manufacturers must produce cars with an engine size of no more than 1,300 to 1,400 cc, using no more than 5 litres of fuel per 1,200 kilometres and must comply with Euro 4 emission standards.

Thailand is already the world's second-largest market for pickups after the United States and has become a leading exporter of the vehicle over the past decade. During the first two months of 2008, Thailand produced 231,680 vehicles, up 27.28 per cent from the same period last year. About 57 per cent of the total production, or 132,674 vehicles, were exported from January to February, a 39.5-per-cent jump on last year's vehicle exports from the same period a year ago. In 2007, Thailand's total vehicle production reached 1.25 million units.

Hitchi to re-enter automobile Engine Market

Japanese electronics giant Hitachi Ltd plans to resume production of automobile engine turbochargers by 2010 in partnership with group member Hitachi Metals Ltd, the Nikkei reported over the weekend, without citing sources.

Hitachi, which stopped taking new orders for turbochargers in 2006, has decided to get back into the field because of anticipated demand growth for vehicles equipped with fuel-efficient turbochargers as fuel economy regulations are toughened in Japan, Europe and the US, the business daily said.

Hitachi is targeting 1 trillion yen in sales in its automotive business in the year to March 2011 and aims to generate some 40 percent of sales from such environment-related parts as motors and rechargeable batteries used in hybrid cars.

(1 US dollar = 99.56 yen)

Influx of Chinese cars expected to drop overall vehicle pricing - Just don't let your kids lick the car

THE influx of cars manufactured in China in the Philippines is expected to pull down the prices of automobiles, especially Japanese brands.

The price tag of a Chinese manufactured car is the “true price,” said Raymond Tumao, chief operating officer of Iseway Motors Phils. Inc, the exclusive distributor of Chery cars from China.

Chery Automobile Co. was founded in 1997. It penetrated the Philippine market in May 2007 with 31 dealerships, 14 of which are already operating in key areas in the country.

“Japanese car brands are priced way too high. As soon as Chinese brands come in and people will be given alternatives, we expect prices of vehicles to go down,” said Tumao during the opening of the Chery showroom on March 15.

Other Chinese car brands that are expected to be introduced in the Philippines this year are Lifan, Foton, Chana, Kama, Jac and Chang An.

Tumao said he wants to organize Chinese car distributors so they can consolidate marketing efforts in the Philippines.

He said Chinese brands offer “affordability, utility and quality.”

Chery vehicle lineup includes sedans and sports utility vehicles with prices ranging from P360,000 to P850,000. It has introduced six types of car: Cowin, Eastar, QQ3, Tiggo, A5 and V5.

Seven years after it started, Chery had sold 189,100 cars with a total increase rate of 118 percent and had exported 18,000 cars.

In the Philippines, so far, Chery has closed corporate accounts. This year, it targets to sell 2,500 units.

Manufactured in China, Chery cars feature European technology and standards in automobile fabrication.

Tumao said Chery buyers will experience “excellent after sales service” and “cheap spare parts.”

X-Prize Foundation announces $ 10 Million award for most fuel efficient car

An insurance company and a nonprofit group today announced plans to give $10 million to the team that designs, builds and brings to market the most viable and efficient vehicle that can get 100 miles per gallon of gasoline.

Progressive Casualty Insurance Co. and the X Prize Foundation jointly made the announcement at the New York International Auto Show.

The international competition, called the Progressive Automotive X Prize, was launched to help break the world's addiction to petroleum and stem the effects of climate change, according to the X Prize Foundation, a nonprofit group that sponsors contests encouraging innovation.

The foundation billed the contest as independent and technology-neutral. It is open to teams from around the world that can design green vehicles that people want to buy and that meet market needs for price, size, capability, safety and performance.

"The Progressive Automotive X Prize is a call to action to promote and inspire innovation," said Peter H. Diamandis, chairman and CEO of the X Prize Foundation, in a statement. "The environmentally friendly cars created as a result of this competition will affect everyone who drives in ways we can't even imagine today."

The foundation said that so far, more than 60 teams from nine countries have signed a letter of intent to compete. Four teams and their vehicles were on hand at the auto show during the announcement today.

"Development of a superefficient car would be a major step forward in the fight against global warming, and it would help us reach our goal of cutting greenhouse gas emissions in New York City by 30% by 2030," said New York City Mayor Michael Bloomberg, who attended the press conference today. "The Progressive Automotive X Prize is an excellent example of how the private sector can spur solutions to our most complex challenges."

The foundation will be accepting applications for the competition until midyear.

Teams and their plans will be examined for safety, cost, business plans and production feasibility. The teams that are accepted into the competition will race their vehicles across the U.S. in various legs in 2009 and 2010. Overall performance will be rated, along with emissions standards and their placement in the races.

Host cities for the races will be announced "soon," according to the X Prize Foundation.

In 2004, the X Prize Foundation awarded a $10 million prize in a global competition to design a private suborbital spacecraft.

Geneva International Motor Show Showcases Eco Friendy Automobiles

Car makers showed off their leanest, greenest mass-market models Thursday in anticipation of stricter European emissions controls as the Geneva International Motor Show opened its doors to the public.

A host of small cars are celebrating their debut in Geneva, including production versions of Ford Motor Co.'s new, fuel-stingy Fiesta and Toyota Motor Corp.'s three-seater iQ, and a concept version of Fiat's 500 Aria. All three boast carbon dioxide emissions of under 100 grams per kilometer, which will help those manufacturers beat an EU proposal for a fleet average of 130 grams by 2012.

Environment ministers from the 27-nation bloc _ the world's biggest consumer market with 490 million people _ met in Brussels earlier this week to discuss the plan, which has ruffled feathers among Europe's large car-producing nations such as Germany.

The environmental group Greenpeace says even tighter emissions targets than those in the EU proposal are needed if climate change is to be reigned in.

About 20 activists protested at the show on Thursday morning, demanding that auto makers rethink what makes a good car and calling for average fleet emissions to be limited to 120 grams per kilometer by 2012, and 80 grams by 2020.

The Geneva show is traditionally regarded as the most level playing field for car makers because Switzerland lacks its own industry.

Europeans will get their first glimpse of Indian manufacturer Tata's Nano, hailed as the world's cheapest car and due to begin rolling off the production line by the end of the year. The pint-sized five-seater will cost $2,500 plus tax and delivery, but will initially only be available in India while Tata works on improving the car's emissions ratio and safety features.

Chevrolet too will be appealing to Europeans accustomed to driving smaller vehicles than their trans-Atlantic cousins.

General Motor Corp.'s top-selling brand is unveiling a three-door version of the Aveo, which debuted in Europe at last year's IAA exhibition in Frankfurt, Germany, with a five-door model.

One of the loopholes to the emissions proposal currently being discussed in Brussels lets car makers pool their fleets with those of companies producing more efficient vehicles.

Companies that exceed the limit would face stiff fines starting at 20 euros ($30) per gram per kilometer, multiplied by the number of cars sold, rising to 95 euros ($144) by 2015. If auto makers pass this cost on to consumers it would add hundreds of euros (dollars) to the price of a car.

Low-volume manufacturers producing fewer than 10,000 vehicles a year would be exempt, but major players such as BMW, Daimler and Volkswagen would have to team up with greener car makers or improve their own fleet if they want to continue selling high-powered SUVs and sports cars in Europe.

The EU proposal, even if it is watered down before being agreed upon, has set auto makers fine-tuning their product range to reduce emission levels as much as possible.

Moves by several large cities to follow London's lead in charging owners of gas-guzzling vehicles a daily fee to enter the city have also spooked manufacturers and given them a further incentive to reduce emissions.

London mayor Ken Livingstone last year raised the daily charge to 25 pounds ($49) for cars that produce more than 225 grams of CO2 per kilometer, while those that produce less than 120 grams per kilometer enter free of charge.

Matthias Wissmann, head of the German auto industry group VDA, has accused Livingstone of appealing to "social envy" rather than pursuing a sound environmental goal.

Almost every major manufacturer in Geneva is showing off hybrid versions that use electricity or hydrogen in addition to conventional fuels. Lighter materials, electricity-generating brakes and even solar panels will be on show by the 260 exhibitors.


No single technology has yet emerged as the definitive way of reducing emissions, but manufacturers including General Motors and Daimler have put their weight behind developing more efficient lithium-ion batteries for use in hybrid vehicles. The German car maker said its Mercedes-Benz flagship S-class luxury sedan will be available in a gas-electricity hybrid version next year.

Martin Lloyd of Greenpeace, who toured the show before its official opening, accused car makers of "greenwashing" their industry with a few headline-grabbing eco models while continuing to sell heavier, faster and less efficient vehicles.

"The industry knows what it has to do and it has the technology to do it," Lloyd said.

The show runs through Sunday, March 16.

Ford Motor Company to take over Romanian Car Plant

Ford Motor Co. will formally take over a Romanian car manufacturer by the end of this month, the prime minister said Wednesday.

Ford was the only bidder for Automobile Craiova in September, paying 57 million euros ($77.9 million) for a 72.4 percent stake in the state-owned company and vowing to invest another 675 million euros ($923 million) to upgrade and expand car production.

Parliament voted 238-15 with five abstentions Tuesday to approve the sale.

The European Union has criticized the sale, accusing Romania of underselling Automobile Craiova to Ford. Regulators have ordered the government to demand Automobile Craiova pay the state the lost revenue from the sale.

The EU executive said the stake was actually worth 84 million euros ($125 million) and the Romanian state lost 27 million euros ($40 million). Romania joined the EU in 2007.

Despite the EU criticism, Prime Minister Calin Popescu Tariceanu said: "I am happy we can finalize this project ... We can ensure jobs to workers in Craiova."

"An entire network of suppliers of parts and components will be created, which will become the second major industrial landmark of the automobile industry in Romania," he said.