Autoblog

Mercedes' small cars, the A-Class and B-Class, have not been the runaway success that the German automaker had hoped they would be, partially due to high costs of production that drove retail prices up above their competitors. That's why Mercedes-Benz had been looking at forming a partnership with a rival automaker in order to reduce costs and produce more competitively-priced entry-level models. But after discussions were held with both BMW and Fiat, Mercedes has opted to go it alone.

Read more after the jump.

[Source: Inside Line]

It's official, Porsche has submitted an offer to buy the Volkswagen group. Unless you've been living in a cave, you probably already know that the erstwhile sportscar manufacturer is more profitable than the megalithic auto consortium, with all its subsidiaries, and has been steadily increasing its stake in VW.

When Porsche raised its stake in Volkswagen past 30%, German law mandated that it submit an offer to Volkswagen shareholders to buy them out and take over the automotive conglomerate outright. The mandatory offer has now been officially submitted, and subsequently approved by the German Federal Agency for Financial Services Supervision.

Porsche is offering Є100.92 per common share, and Є65.54 for preferred shares, coming in at the bare minimum required by law. Volkswagen shareholders have until May 29 to accept or refuse the offer. If they accept, Porsche will have full control of Volkswagen and all its subsidiaries, including the Audi, Skoda, Seat, Lamborghini, Bugatti and Bentley brands, turning what was once the niche sportscar maker into one of the largest automobile makers in the world. It's unlikely that the VW board will accept, however, considering Porsche made the bare min bid.

Related posts:

• Porsche takes a $47b loan out to bid for VW
• Porsche, yet again, raising stake in VW

Press release after the jump.

[Source: Porsche]

Alfa Romeo's flagship 169 sedan is scheduled to replace the ageing 166 in 2009, but conflicting speculation has suggested that the luxury sedan could be based on either a stretched 159 chassis or on the upcoming Maserati Quattroporte successor. The latest reports coming out of Italy suggest it'll be sharing with the larger trident rather than the smaller Alfa.

The Fiat Group that dominates the Italian automotive industry has traditionally kept their brands separate, refusing to share most components, let alone platforms, in a bid to keep the marques distinct from each other and steer well clear of the increasingly popular trend of badge engineering. But in recent years, that trend has been reversing even in Turin. Maseratis started sharing components with Ferrari and now with Alfa Romeo, Fiat has been partnering with PSA and Suzuki on new models, and an upcoming Alfa hatchback will be based on the Fiat Punto. So with Maserati still lagging in profitability and Alfa trying to regain its prestige, it's no wonder they've decided to go this route for the upcoming 169 and Quattroporte sedans.

Together with the thrilling 8C Competizione sports car, the 169 marks Alfa Romeo's return to rear-drive after 15 years of horses pulling from the front.

[Source: Winding Road]

"Screw you guys, I'm going home." A phrase made famous by Cartman from South Park but one that we find so apt for news coming out of General Motors this afternoon. Royally irked over the ending of alliance talks with Renault/Nissan, billionaire investor Kirk Kerkorian has announced that he won't buy an additional 12 million shares of GM stock as he said he would, and that his advisor/muscle Jerry York has resigned his seat from the board of General Motors. The additional 12 million shares would've pumped Kerkorian's share of GM from 9.9 percent to around 12 percent. What will Kerkorian do now after his move to manhandle GM management has failed? Who knows, as this guy has been anything but predictable.

Thanks to Chris D. for the tip!

[Source: CNN Money]

Yesterday the price of GM stock was up $1.05 or 4.46 percent on news that Deutsche Bank analyst Rod Lache had raised his rating on the stock up to "hold" from "sell". Why the change of heart? Monday's announcement that GM had broke a five-quarter losing streak with a Q1 2006 earning of $445 million was responsible. The sudden gush of black ink in the books was a result of GM's health-care settlement with Delphi, reportedly worth $681 million, being excluded from the company's balance sheet.

Analysts aren't yet bullish on GM, however, with some still giving the automaker a 30-percent change of bankruptcy.

[Source: Reuters]