MPG-o-rama! 2010 Prius leak confirmed; Toyota speaks on Scion iQ rumors

Fuel misers rejoice! We've got a double shot of Toyota MPG-centric news for you tonight.

Last night, while I was off waxing poetic about the British and their victory in the Nevada desert 11 years hence, the internet was boiling over with rumors that the 2010 Prius had done the full-monty strip show.

After weeks of execrable teaser shots, it's true. The design of the 2010 Toyota Prius has indeed been revealed in its entirety. It all started at PriusChat.com, where member bossdowner posted four pictures of the third generation Prius.

After a day of speculation, the truth was revealed when the lads at Jalopnik sat down with Toyota's PR reps. They confirmed the pictures were legit, but declined to comment further.

So we have no other information about the car at this time. Instead, we'll all have to wait until the car's official unveiling at the Detroit Motor Show in January.

Or until the next leak gushes forth.

Toyota engineer confirms iQ under review for sale in USA
In other news, one of Toyota's top engineers has confirmed the Japanese automaker is considering selling the new iQ subcompact in the United States.

Speaking with Automotive News, Hiroki Nakajima said that Toyota is investigating the idea and that he expects a launch date before the iQ is given a mid-model refresh. Sales of the iQ begin in Japan on November 20; the tiny Toyota is a 2+2 competitor to the 2-seat Smart forTwo subcompact.

While the JDM model is powered by a 1.0-liter SOHC 12-valve inline-3, Nakajima said there is plenty of room to install the 1.5-liter DOHC 16-valve four currently used in the Toyota Yaris compact hatchback.

The iQ's unique transmission - which sits below the engine rather than behind the engine - would carry over, as it is crucial to maximizing space within the iQ's 77-inch wheelbase.

And as we reported earlier this week, the iQ is quite thifty. While the EU testing regimen differs from ours, 65 mpg is quite a feat. Even if that figure drops by 15 percent due to added weight and a larger motor, the smart forTwo would have face stiff competition in a market it currently owns.

But first, a reality check. Tossing aside the rose-colored glasses for a moment, there are a few hurdles the iQ must clear before we see it stateside.

A number of changes must be made to the iQ unit-body structure. Speaking with Automotive News, Nakajima said the iQ's airbags would need to be redesigned and the bumpers would need to be strengthened to pass federal safety standards.

Another issue is price. The 118-inch long iQ might be dinky, but the price tag isn't. In Japan, the iQ retails for between $13,860 and $15,840 (¥1.4M - ¥1.6M). It's a safe bet to add another $1,000 to cover the cost of shipping and retooling the iQ to meet US safety standards.

And even though the rumor mill has the iQ pegged as a new Scion, it doesn't really change the marketing math. Assuming the iQ is priced near $16,000, the subcompact will fight it out with the Honda Fit Sport, Toyota's own Yaris sedan and Scions' own xD hatch.

At the bottom end of the market, profit margins are often very slim. And the entire industry is headed into a very turbulent economy. With sales of new cars tanking this year and 2009 expected to be just as bleak, the iQ might only steal sales from within the Toyota family.

But then again, I might be the one who's off base. After all, I was rattling on about supersonic rocket cars — humming Rule Brittania [MP3]— while all this came to pass.

[AN]

Auto News Wrapup: F-bombs, tax bills and buyouts

Cerberus in talks to buy out Daimler AG stake in Chrysler

A day after the company's bold assertion to enter the EV market in less than three years, Chrysler may soon be owned wholly by current majority shareholder Cerberus Capital Management.

This afternoon, officials from both companies confirmed the talks regarding the sale of the 19.9 percent stake Daimler currently holds in Chrysler LLC. A spokesman for Cerberus Capital Management also said that the current supplier agreements between Daimler and Chrysler would continue after a potential sale.

The private-equity firm Cerberus bought 80.1 percent of Chrysler from Daimler AG in August 2007 for $7.4 billion. Chrysler Holding encompasses Chrysler LLC, the automaker, and DaimlerChrysler Financial Services Americas LLC, known to the market as Chrysler Financial.

"It's still very early to tell why this is happening," Aaron Bragman, auto analyst at Global Insight, told Reuters. Bragman posited that the full purchase of Chrysler may be a prelude to selling the automaker whole to a third party.

House approves $25 billion in auto industry loans; Senate passes $7,500 tax credit for plug-in hybrids

As the mortgage bailout dog and pony show continues on Capitol Hill today, the House of Representatives voted 370 to 58 in favor of a $25 billion aid package for American automakers and suppliers. The bill sponsors the issuance of low-interest government-backed mortgages that would allow automakers to retool factories and expedite the production of more fuel-efficient vehicles.

The Senate is expected to vote on the budget bill by week's end; President Bush is likely to sign it. When signed, the new loan program will set a new precedent in government involvement within the auto industry, far exceeding the 1979 bill which provided loan guarantees to Chrysler Corporation.

Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, said in a statement:

"Some critics will call this loan package a bailout. It is not. These loans amount to a little more than 1 percent of the real bailout -- the one that the Bush administration wants for Wall Street at a cost of $700 billion to taxpayers.

"The loans to the automakers will cost about $7 billion and will be repaid to the taxpayer at a profit," Dingell said. "The auto direct-loan package is a good deal for auto workers and a good deal for taxpayers."

Rep. Jerry Lewis, R-Calif., ranking member on the House Appropriations Committee, complained that the bill was put together by a handful of Democratic leaders and the vote was taken before it was properly reviewed in session.

Chevy Volt to qualify for maximum plug-in hybrid tax credit

Meanwhile in the Senate, General Motors is one step closer to their wish of a $7500 tax credit to help jump-start sales of the Chevrolet Volt. In a wide-ranging and intricate tax bill, a small provision creating a new tax credit for buyers of plug-in electric vehicles was passed today.

The credit would start at $2,500 and rise to as much as $7,500 for a light-duty vehicle, depending on battery capacity. As currently written, the Chevrolet Volt qualifies for the maximum tax credit. The measure would begin to phase out tax credits for plug-in electrics after 250,000 units have sold — a marked contrast to the 2005 tax bill that began to phase out after only 60,000 units.

The complex tax bill ricocheted through the various subcommittees for months, but when the votes was taken, the bill passed by 93-to-2. The House must still act on the bill, but with the upcoming recess for the election, a vote is expected by week's end. The White House dropped objections to some provisions unrelated to the plug-in hybrid tax credit.

As of a few days ago, Toyota officials complained that the 2011 plug-in hybrid Prius would be excluded from the tax credit. It's unclear how far the Senate moved to meet Toyota's objections, but it appears the issue has been resolved.

Dropping "F" Bombs: Ford family heir sells 1M shares of company stock

And in our last news item of the night: Bill Ford, chairman of Ford Motor Company and grandson of founder Henry Ford, dumped one million shares of common stock on Sept. 19 — in part to pay off debt incurred by exercising stock options in 2004 and 2005.

Ford sold the shares at an average weighted sale price of $5.05 on Thursday and continues to hold more than 5.3 million shares of common stock in the automaker, according to a filing on Friday with the U.S. Securities and Exchange Commission.

Ford bought over 1.4 million common shares in the company since March 2004 and another 1.5 million in March 2005 after exercising options granted over the years, according to SEC filings. Share prices fell in the immediate aftermath of Friday's sale before rebounding to close at $5.03 tonight.

[AN, Reuters]

Toyota to idle truck, SUV plants, begin US assembly of Prius

Responding to the decline in sales that prompted GM's shift from light trucks, Toyota will idle its Tundra and Sequoia production line in San Antonio, Texas for three months starting August 8.

While sales of the Sequoia SUV rose marginally, sales of the recently redesigned Tundra fell by 54 percent last month, signalling a reaction by consumer to sustained high oil prices and dragging Toyota's overall monthly sales down by 21 percent for the month.

Production of the Sequoia full-size SUV will also be idled at Toyota's plant in Princeton, Indiana. Production of the Sienna minivan will continue at Princeton during the transition, spokesman Mike Goss said.

During the shutdown, the Princeton plant will switch to the smaller and more fuel efficient Highlander SUV, which originally slated to be built at the Blue Springs, Mississipppi plant currently under construction.

Instead, the Mississipppi plant will begin production of the Prius hybrid in late 2010. This will be the first factory outside of Japan to produce the iconic hybrid.

The increase in production comes in response to a sustained increase in demand brought about by $4-per-gallon gasoline in the United States.

As reported by the Associated Press, sales of the Prius fell 34 percent last month as Toyota failed to meet demand for the 46 miles per gallon car. Priuses are sitting on the lot for just four or five days before they're sold, according to Tom Libby, senior director of industry analysis for the Power Information Network, a branch of J.D. Power and Associates.

By contrast, the Toyota Tundra pickup is on the lot for an average 64 days before it is sold.

Toyota has 13 North American plants and two under construction in Mississippi and Ontario. The automaker has more than 43,000 workers in North America.

Toyota's U.S. shares rose $1.12, or 1.2 percent, to $92.60 in New York trading today, following the announcement.

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