Although the first two generations of BMW's revival of the Mini brand have been sales sensations and are nothing if not fun to drive, the Bavarian company's true engineering merit has always been with rear-wheel drive vehicles. So, it isn't at all surprising that the huge sporting automaker from Germany is looking to co-develop its next front-wheel drive Mini platform with Fiat. Though it could be argued that the Fiat 500 is a direct shot across the bow of the retro-style Mini Cooper, the money savings from platform sharing was apparently just too much to resist for the two automakers.

Fiat certainly has a long history of producing fine small cars, and its current Punto and Panda-based 500 have received rather good reviews from the European motoring press. What's more, BMW has always used engines developed in cooperation with other manufacturers for the Mini. Still, it seems odd that the two marque's would go at each other with vehicles built off the same underpinnings. We'll just need to wait and see how well the two vehicles are differentiated from one another.

[Source: Reuters]

The General Motors factory in Zaragoza, Spain is set to get a roof tiled in solar panels as part of a larger initiative throughout GM's European operations. 183,000 square meters of photovoltaic cells will be capable of providing up to a quarter of the factory's peak demand. Zaragoza is GM's biggest European factory, and the project will cost €50m, though its benefit will be significant reduction in energy bills for the automaker. GM has 19 other plants in Europe, and the Saint Petersburg factory is next on the list for the solar treatment. Other locations may follow, though some are likely better suited than others due to a variety of environmental and business factors.

[Source: Automotive News – Sub Req]

Until a couple of months ago, Mike Donoughe was a vice president at Chrysler and had been put in charge of the crash program to redesign the automaker's mid-sized sedans. Donoughe left Auburn Hills after 24 years and is now heading west to join Tesla Motors as Executive Vice President for vehicle development and manufacturing. In his new role Donoughe will be responsible for ongoing development and production of the Roadster as well as bringing the new Model S sedan to fruition sooner rather than later. Tesla has learned from the experience of trying to build the Roadster that while the fresh eyes of Silicon Valley may be helpful in creating new innovations, some experienced hands can be helpful with the more traditional parts of the process like dealing with suppliers and figuring out how to manufacture the all the bits and pieces and bolt them together. During our recent interview with Tesla Chairman Elon Musk, he indicated that several industry veterans would be coming aboard in the near future and Donoughe is just the first. The Tesla press release is after the jump.

[Source: Tesla Motors]

Since first hearing that ex-McLaren F1 supercar designer Gordon Murray had left the famous racing company to create his own design house and that its first product was to be a revolutionary city car, we've been anxiously awaiting more details to come to the surface. Lucky for us, they just have. Murray promises that his low-cost car will cut emissions in half and be cheap to purchase and manufacturer. In fact, twenty-percent fewer parts are said to be necessary for the assembly of the vehicle. So far, no real details on what will power the vehicle are available.

We do know that Caparo, makers of the extremely impressive T1 supercar, are heavily involved in the project. This leads us to believe that some major use of composites is in order as carbon fiber is a specialty of Caparo. Murray has no plans to actually produce the vehicle; instead he will sell the plans to other automakers for them to offer to the public. Interestingly, Murray also claims that shipping expenses will also be reduced as the vehicle can be flat packed Ikea-style.

[Source: Autocar]

In a particularly bleak sales month in June, there were some surprising numbers hidden deep in the sales reports. A month ago, sales of small cars like the Honda Civic, Ford Focus and Toyota Corolla all had record sales. All three of those cars had major drops in June, even though gas prices continued to rise above $4 a gallon. The main reason sales of those and other cars - including hybrids - dropped is that there simply aren't enough available. In general, car dealers try to keep about a 60-day supply of each model they sell in stock. That gives a buffer against supply interruptions and moderate increases in sales as well as providing a reasonable selection of option and color combinations for consumers.

Through April and May, sales of small cars were so strong that inventories of small cars were almost completely depleted. By the end of June, Toyota only had a 15-day supply of Corollas and 7-days worth of Yaris models. On the hybrid front, Toyota had essentially no Priuses or Camry hybrids in stock anywhere. At the beginning of June, (end of June figures aren't yet available) Ford had only a 24-day supply of Focuses while Honda had a 20-day supply of Civics. Automakers are scrambling right now to shift production capacity with Ford adding a third shift to the current Focus assembly plant while working on shifting the Explorer plant to Focus production. Toyota is also adding capacity for Camrys at its Princeton, Indiana plant and Honda is surely looking for more Civics as well.

[Source: Reuters]

Fiat's Tichy plant.

Small cars need small engines, and Fiat is preparing both.

To provide propulsion for its new Topolino microcar, coming in late 2009, Fiat has announced it will expand its plant in Bielsko Biala, Poland to make its new 900cc two-cylinder engine. The 900cc engine was shown in the Aria concept at the last Frankfurt Motor Show and will be the only two-cylinder car in all of Europe. Automotive News says that the powerplant will provide anywhere from 65hp (with <100 g/km of CO₂) to 110hp in turbocharged form. After the Topolino is all set, the new engine will find its way into the 500, the Panda and maybe more vehicles. As we wrote last month, the Topolino may get more than 67 mpg (U.S.) and that's without a potential full hybrid system.

[Source: Automotive News]

Our friend John McElroy isn't the only person out there who thinks that General Motors should dust off the old EV1 program and re-release it for public consumption again. Apparently, a passionate electric car enthusiast copied Mr. Bob Lutz himself on a letter suggesting that the EV1 needs to be brought back with its original lead-acid batteries. Remember, though, that Lutz is extremely involved in the Volt project, so it's not too surprising that he had plenty to say in response to the letter. In fact, Lutz echoes many of the sentiments expressed by our own Sam Abuelsamid, who recently wrote about the difficulties of reviving the long-dead program. Lutz highlights the fact that the General lost one billion buckaroos on that program the first time around and balks at the suggestion that lithium ion batteries are not yet ready for primetime. According to Lutz's response, the Volt's battery pack will not delay its launch. For our part, we're content to see the Volt picking up the pieces left by the loss of the EV1.

[Source: LA Times]

This is not the time to be betting on first-generation biofuels. Add up the increasing cost of feedstocks and an overall tough economy and it's no great surprise that "going yellow," as it were, is not the easy path that some made it seem a year or so ago. The reality is hitting home. According to Reuters, about a dozen biofuel plants across the U.S. have filed for bankruptcy protection thanks to corn shooting up to $8 a bushel and ethanol's "miserable profit margins." The affected plants are mostly small or mid-sized facilities, a biofuels expert told Reuters, and he said he expected more to announce bankruptcy soon.

On top of the financial problems, many ethanol plants are only operating at 50 percent capacity and previously-announced plants are being stalled or stopped completely. Who knows how much longer blending E85 into gasoline at the pump will be a way to save a few bucks.

[Source: Reuters]

U.S. Presidential hopeful John McCain says he opposes the notion that individual states should be able to set their own carbon dioxide emissions regulations. Still, it sounds as if automakers could be in for a shocker if the Republican were to be elected, as he says, "My goal would be to see a federal standard that every state could embrace. I think we can achieve a status where that would go away." So, it sounds as if the target for CO₂ emissions could be set even lower than currently planned. McCain likely mimics the thoughts of the Detroit 3 as he says, "It's going to be hard, it's going to be long and it's going to be tough."

McCain appears to see the future of the American auto market as one made up of small, fuel efficient cars. His latest stop was at GM's Lordstown, Ohio assembly plant where the Chevrolet Cobalt and Pontiac G5 are built, a plant McCain sees as key to GM's successes. Still, the major players in the industry will be on their own, as McCain has no intention to offer any sort of bailout to any of the Detroit 3.

[Source: The Detroit News]

Automakers have long tried to reduce the cost of parts by sourcing more items from suppliers in low cost countries. Until now, the cheap labor overseas was enough of a savings to cover the cost of shipping parts back to North America. But, the increased cost of fuel means that it suddenly costs a lot more to send components from places like China, India and elsewhere to the U.S. GM VP of Purchasing Bo Andersson has said the company will look on a case by case basis at sourcing suppliers closer to its assembly plants to help reduce transportation costs. Smaller parts like radios that don't cost much on a per piece basis may still come from overseas, but larger, heavier items like wheels probably won't. Fuel costs aren't the only deterrent to importing parts. The plummeting value of the U.S. dollar also makes domestic suppliers relatively cheaper now.

[Source: Reuters]

The Honda Fit is selling like candy in the U.S. Sales of the subcompact car from January to May have increased by 64 percent, compared to the same period last year. Honda originally planned to sell between 30,000 and 40,000 Fits a year, but then increased production to 60,000. The marque is planning almost 80,000 units of the new model, which is going on sale on October 1st.

Global capacity for the Fit is more than 500,000 units. All U.S. units are imported from Japan, where the new generation is already in production (Americans still get the first generation models). The reality is that Honda USA will have to compete with other markets to get more units stateside.

[Source: Automotive news (sub's req'd)]

In the first two parts of our discussion, Tesla Motors Chairman Elon Musk described how he came to be a part of Tesla Motors and how he influenced the development of the Roadster. It's important to note that he never described himself as the designer or creator of the Roadster. Rather he considers himself the co-architect of the sports car.

With production of the Roadster now sort of underway and the updated drivetrain hopefully coming soon, it's time to look forward. As the self-declared Product Architect, Musk is playing perhaps an even bigger role with the next product, a sedan that we've known for some time by the code name WhiteStar. We had hoped to see WhiteStar this spring but that obviously hasn't happened yet. In the conclusion of our discussion, Musk gives out some hints about what to expect and what Tesla has learned over the past five years. Read on to learn more about what's coming next.

Make sure you read Part 1 and Part 2.

In yet another sign of the times at Ford, it looks like the factory that builds what was not so long ago the best-selling SUV on the plant is shifting gears. Ford's Louisville, KY assembly that has built the Ford Explorer and Mercury Mountaineer for two decades will switch to building small cars in 2010. The current Focus will be replaced by a model developed by Ford of Europe at that time and production will be expanded from the current Wayne, MI assembly location location to Louisville. With the latest capacity increase at Wayne, Ford has capacity for 280,000 Focuses a year. Sales of the compact are already up 35.7 percent this year based largely on its fuel economy.

The new Euro-designed Focus will come in sedan and five door hatchback body styles when it arrives. With the shift to a common platform, current Europe-only variants, including the C-Max compact MPV, are likely to join the U.S. lineup. The new compacts will get direct injected engines and six-speed automatic and manual transmissions to further enhance fuel economy.

[Source: Automotive News - Sub. req'd]

Stuttgart-based automaker Mercedes has announced a new factory in Hungary, in the town of Kecskemet, south of Budapest. The new facility is expected to cost €800 million and create 2,500 jobs. This announcement comes after the marque revealed plans to enlarge its "subcompact premium" offerings, and the new plant will be able to produce up to four different models. This will help Mercedes compete against the Audi A1 and Mini, while lowering its average fleet CO₂ emission levels. Mercedes' plant in Rastatt, Germany, where the current A and B Class are made, is also getting a €600 million investment, which could mean that the Hungarian-built models could be completely new. Recent rumors say that Mercedes could make the A and B Class rear-wheel drive (BMW 1-Series anyone?), while the new Hungarian modes could keep the FWD configuration (again, BMW's Mini anyone?).

[Source: Mercedes]

Ford is responding to the dramatic shift in vehicle sales in recent months by culling truck production and adding passenger car production as quickly as they can. One of the few bright points in Ford's lineup right now is the Focus, which Ford is selling as fast as they can build them. The company will be adding a third shift in the body and paint shops at the Wayne, MI assembly plant that produces the Focus and increasing the line speed on the assembly line to try and keep up with demand. The Kansas City assembly plant that builds the Escape and Mercury Mariner crossovers is also adding a third shift to keep up with demand for those vehicles. At this time, Ford doesn't plan to increase volumes for the Escape hybrid from the current 25,000 per year.

Perhaps more exciting to the those who aren't fans of the styling of the current U.S. Focus, Ford has confirmed that the next-generation Euro Focus will be coming to North America with production starting here in 2010. CEO Alan Mullaly declared, "We view the move to smaller, more fuel-efficient vehicles as permanent, and we are responding to customer demand." Ford is also slashing production of all large trucks and full-size cars. The big question for Ford is can they move fast enough to meet demand for the cars that drivers want? The Ford press release is after the jump.