Nobody hates cars as much as the car industry does these days. The business is crippling some of its biggest players and behold the dearth of industry names queuing up to buy other automakers.

Opel in Germany is being sold yet are Volkswagen, Porsche, BMW or Daimler anywhere to be found? Spot the empty parking lot.

Without the Chinese, auto sector M&A right now is about as exciting as a 1981 Yugo.

Some makers still have money though, so what has everybody racing to get away?

Bad experiences, in part.

The last really big deal where two car companies merged was DaimlerChrysler in 1998. It’s best remembered this way: Spent a lot of dimes, did a lot of crying. Disaster and divorce. 

A great article written years after the deal revealed telltale signs of the troubles in store for that marriage when even the order of the name – which should go first – threatened to break up the talks.

But good old fashioned sectoral M&A is being thwarted by something more than good old fashioned fear and loathing. It’s self-loathing. The industry’s top names have already gobbled up the companies they wanted – Jaguar, Lamborghini, Bentley.

U.S. and European makers are all out of love partly because their long established businesses at home are not making the big bucks. What they want now is emerging market growth, China preferred.

Just look at the reform plans of General Motors. Keep Buick, kill Pontiac. This was an astounding choice from a U.S. marketing perspective.

Pontiac has trounced Buick in U.S. sales forever. Cool people drive Pontiacs, or at least people who used to be cool. Burt Reynolds drove a Trans-Am in Smokey & the Bandit in 1977 and the tyres are still hot.

On the other hand, if you have an uncle who wears white shoes and belt and likes to make out he’s well off but isn’t, he drives a Buick.

He’ll tell you it’s just like a Cadillac. And you’ll ask ‘Then why didn’t you buy a Cadillac?’ He’ll try to avoid saying because he couldn’t afford one. And your mother will ask why can’t the family just get along.

But Buick is GM’s big badge in China, and that’s where it is placing its bets. Why aren’t German carmakers buying German carmakers and Americans U.S. ones? Because they don’t want to be in Germany or the United States, they want to grow abroad.

Don’t be fooled by Fiat. Yes it now has a stake in Chrysler, but it came to the table empty handed. The Obama Administration needed a “front” – an industry buyer to feign deep faith in the future of Chrysler – to make it politically feasible for it to fork over the billions in taxpayer money needed to keep the maker of Dodge trucks on life support.

Fiat boss Sergio Marchionne saw this and stepped forward. He similarly had his eye on European government funding when he put up his hand for Opel. You guys pay and I’ll own it. You have to give the guy credit.

It’s tough under such terms to think of these deals as strategic industrial tie-ups, they’re purely opportunistic. And the Germans at least realised this and thought better of doing a deal.

Fiat, not having sold one of its brand in America since 1983, now returns to a vastly different market from the one it fled from in despair.

If they thought it was tough back then, just wait until they try selling in a market where the Japanese have plants churning out cars and trucks across the country and the South Koreans, a complete non-entity before, now sell about 700,000 cars a year.

European whispering about how Fiat might “introduce” small cars to America misses out the last 35 years of change in the U.S. market.

Which is a good place to turn to the Chinese, who currently are not missing out on anything.

By the time Fiat sells its first car in Ohio, Chinese ships will be docking full of smaller, cheaper rival models that will drive Fiat into the weeds. There’s a chance the Chinese ships could outnumber the Fiats that get bought.

The Chinese have taken years gearing up. They bought the UK’s MG-Rover, want GM’s Hummer SUV maker, and are now eyeing an indirect slice of Saab.

More importantly, they have partnered at home with all the big names – VW, Ford, Daimler, GM, Hyundai – and that has fostered expertise that sets up the next phase of growth – exports of their own brands such as Chery, Geely and Changan.

You may not know these names now, but you will soon. No American knew what a Daewoo or Kia was 10 years ago either. The Chinese will put the wind up the Americans, Europeans, Japanese and South Koreans. India also risks being left behind in its similar yet still nascent dream of dominance in the cheap auto export market.

A good rule of thumb is that any nation that can build nuclear plants, rockets and submarines can export a passable hatchback.

Russia hasn’t, that’s true, but China has one critically important advantage – the ardent desire of Western and Asian firms for a slice of the massive Chinese market.

There’s a quid pro quo there that’s likely to clear the way for more Chinese takeovers and their inevitable export push.

U.S. and European companies want partnerships and a nod for access in China, and in return will tell Washington and Brussels it’s cool with them if Chinese firms come knocking.

China’s makers are about to and the appetite of global automakers for Chinese takeaways is already plain to see.

This post was written by Jason Neely.

With highly touted plans for a new electric car in jeopardy, an overseas investor steps in to provide new capital and a much-needed endorsement.

GM? No, Tesla.

Remarkably, the terms of German automaker Daimler AG’s 10-percent stake in Tesla may have also helped the Silicon Valley electric-car start-up inch closer to GM in value.

Daimler’s vague disclosure of its purchase price as  “double digit million dollar” means Tesla is valued at a minimum of $100 million.
That would make Tesla, which was founded nearly six years ago, about one-eighth the size of 100-year-old GM.

A world away in Detroit, GM has seen its share price spiral downward to near $1.  That the price may fall to near zero if the automaker files for bankruptcy as is widely expected. It would be worth less than 2 cents if GM proceeds with plans to issue a flood of new shares to pay off creditors.

GM was worth around $768 million, making it by far the smallest component in the Dow Jones industrial average judged by market cap.

A bankruptcy judge would also cast doubts on the 2010 launch plans for GM’s Volt plug-in range-extended hybrid while Tesla’s all-electric and pricey Roadster is already on the road.

Tesla chief executive, financial backer and tech entrepreneur Elon Musk and GM executives have traded barbs in the past.

GM’s flamboyant former product chief Bob Lutz has described San Carlos, California-based Tesla as a “little West Coast outfit” that was stitching together laptop batteries together.

Musk, meanwhile, has shot back that GM’s range-extender technology in its still-in-development Volt was “neither fish nor fowl.”

Late last year, Musk, who also founded PayPal, couldn’t resist a dig when asked why GM, an early proponent of electric car technology,  had not bought his company. “I’m not sure they can afford Tesla right now,” Musk said.

Chrysler’s biggest lenders and the U.S. government reached a breakthrough framework deal to cut the automaker’s debt by $6.9 billion, but officials say bankruptcy is still a strong possibility with the Obama administration’s Thursday deadline for a comprehensive rescue plan just hours away.

Fiat Chief Executive Sergio Marchionne was quoted by the president of the Canadian Auto Workers union as saying Chrysler would likely enter Chapter 11 bankruptcy for a period of time. But Michigan Senator Carl Levin said, “If they do go into bankruptcy, it would really be in and out.” A source with senior-level knowledge of the restructuring told us that a surgical bankruptcy could be a way, for instance, to address “recalcitrant” lenders.

With Germany’s Daimler AG dumping its 19.9 percent stake in Chrysler and Italy’s Fiat poised to “eventually” own more than a third of the company, European know-how and innovation have never been more important for the U.S. auto industry.

Deals of the Day:

* British education and training company BPP Holdings said it had received a preliminary approach from Apollo Global at 620 pence per share in cash. The approach was at a 70 percent premium to BPP’s closing price on Tuesday valued BPP at 303.5 million pounds ($447 million).

* Australian iron ore miner Fortescue Metals has completed approvals for its equity tie-up with China’s Hunan Valin Iron and Steel Group, the company said.

* Russia’s Aeroflot may agree to buy 49 percent of troubled German airline Blue Wings, Russian Transport Minister Igor Levitin, who is also Aeroflot’s chairman, told Reuters.

* A merger between Shinsei Bank and Aozora Bank is facing difficulties as they were not able to get consent from their major shareholders, Jiji news agency reported. 

(PHOTO: A Chrysler logo is seen atop a New York City car dealership April 27, 2009. REUTERS/Mike Segar)

At the end of December 2007, Daimler’s 20-percent stake in Chrysler was valued at about $1.18 billion.

At the end of June, Daimler valued that investment at about $219.6 million.

Today, Daimler said the book value of that 20-percent stake is zero.

That’s right, zero.

To put that zero in perspective:

A year ago, after Daimler sold 80 percent of Chrysler to U.S. private equity firm Cerberus Capital Management, the German automaker listed the value of its minority interest at $1.8 billion.

Ten years ago, Daimler paid $36 billion for all of Chrysler.

For Daimler to disclose that the book value of its stake has come to nothing, and to do it at a time when it is in talks to sell that stake to Cerberus, is bad news for Chrysler.

In a move equally telling, Cerberus is trying to offload Chrysler and is talking to various parties about multiple options including a full sale or an asset swap, according to people familiar with the matter. In order to make any such deal simpler, it is also in talks with Daimler for the remaining stake.

Chrysler has been hit hardest by slumping U.S. auto sales. Industry-wide October auto sales are expected to hit 18-year lows. Chrysler’s sales are down 25 percent so far this year as tight credit conditions, high oil prices and a weak housing market have whacked vehicle demand.

Cerberus founder Stephen Feinberg, who bought Chrysler in a $7.4 billion deal last year, is eager to cut his exposure to the auto business and to increase his 51-percent stake in GMAC, the finance arm co-owned by GM, sources have said.

The write-down is partly bookkeeping (Daimler took a huge charge for the vanished value) and the carrying value may or may not reflect the stake’s value in a sale.

But if you couple that move with the difficulty in valuating auto assets (already considered distressed) and the poor visibility in the sector today, Daimler’s disclosure points to a fearful observation. It’s one that a few analysts and industry experts have recently cautioned about: Chrysler’s auto operations as a whole may, indeed, be worthless.