Was there ever any doubt that China, having donned the overalls of the world’s manufacturer, would ultimately emerge as a top bidder in the race for sputtering global auto assets? Not only does the country have the labor force to build the automobile of tomorrow, but increasingly it has the consumer class to buy it.

So it would seem natural for Swedish luxury sports car maker Koenigsegg to tie up with China’s BAIC to help finance its purchase of Saab from General Motors. And news that the parent of China’s Geely Automotive wants to bid for Ford’s Swedish brand, Volvo, is as much a confirmation of a trend as it is evidence of a tectonic shift in the industry.

Like its neighbors Japan and South Korea before it, China has the tools to revitalize the auto industry by applying its low-cost muscle. The trick will be to nurture these imported brands and their technological expertise so they can survive the transition. China has never been known as a paradigm of consumer safety - at least not in a way befitting Volvo.

Japan and South Korea were able to grow their own intellectual capital in the auto industry. But perhaps what the struggling industry needs now, rather than innovation and cutting-edge research, is simply a place with both a production and a consumer base in which to ply its trade.

Bharti Airtel will not sweeten its offer for MTN now that exclusive talks between the two have been extended. Instead, the talks are about administrative issues, permissions and a scheme of arrangements, Bharti Chairman Sunil Mittal told the Economic Times. And the fate of Opel hangs in the balance, with General Motors poised to pick a buyer. Its board will address the topic later on Friday, sources told us.

For these and other stories on deals, click here. And for an overview of what other media are saying, have a look at our daily Market Chatter.

True to form, GM's negotiator on the sale of Opel has poured cold water on expectations of a slam-dunk deal for Canadian car parts group Magna and its Russian backers.

John Smith (no relation, but I'm impressed by his negotiating) maintains in his blog that GM will compare the latest Magna offer with the proposal it has on the table from Belgium-based financial investor RHJ International.

Yesterday was a pretty busy day in the media, with many outlets  reporting that Magna/Sberbank and General Motors had reached an agreement regarding Opel.  At the risk of repeating myself, that’s just not the case. (emphasis added)

Smith is still waiting for more information from Germany's automotive task force on the T&C of the financing package they are offering to sweeten a deal to buy Opel.

He's promising to keep us posted. Shame nobody else involved in the negotiations in blogging on them. Or perhaps a chatroom is the way to go.

General Motors’ upcoming Volt model will run up to 230 miles per gallon of fuel, but the saga to sell off its European operations seems equally long-lasting. The bidding process is now between two bidders — Magna International and RHJ International — with GM’s CFO Ray Young telling Reuters earlier that “everyone is anxious to get this thing done”.

In other M&A related stories reported by media on Wednesday:

Indian state-run explorer Oli and National Gas Corp is in talks with three Russian firms about a joint bid for a stake in YPF the Argentinean arm of Spanish oil major Repsol YPF SA, the Economic Times reported.

JP Morgan is looking to sell 23 office properties in what may be the country’s largest office real estate sale this year, the Wall Street Journal said. Here’s Reuters’ report.

As of Friday, there was no knowing how much longer funding for the program will last. The Obama administration has reassured car shoppers and dealers that any trade-ins over the weekend will be honored at rebates for up to $4,500. Meanwhile, the U.S. House rushed to triple funding  for the program, adding another $2 billion in a bill that heads to the Senate where it could face tougher scrutiny.

U.S. car sales for July, set to be released on Monday, are expected to show a turbocharged boost from the government program, a sleeper success in a string of policy steps aimed at stabilizing the U.S. auto industry that has included government-sponsored bankruptcies at GM and Chrysler.

Before the rush of clunker trade-ins, analysts had been looking for industry-wide July auto sales to top 10 million units, the highest rate of 2009 and an encouraging sign the market has turned the corner. Investors have discounted some of that recovery. Shares in AutoNation, the No. 1 dealership group, have gained 48 percent since the start of the second quarter. Shares in the No. 2 dealership group, Penske Automotive Group, have more than doubled.

With inventories tight, automakers also stand to gain as production — and revenues — increase in the second half. July sales data will help sort the winners from the losers, but the early anecdotal evidence suggests that the some of the biggest gains have gone to the automakers that were already outperforming.

Delphi may close to the finish line, bringing to a close its four-year-long bankruptcy. The Pension Benefit Guaranty Corporation says it will take over the pension plans of 70,000 Delphi workers and retirees. That can’t be anything but good news for potential bidders for Delphi assets.

Talks between Delphi and its lenders have been progressing toward a compromise deal that would supersede a bid by private equity firm Platinum Equity favored by GM and the U.S. Treasury, sources have told us. What else might it take to get Delphi to the finish line? The next few days will tell if enough has been done.

Last night the federal judge hearing the case postponed the auction of Delphi’s assets until Friday. A hearing to approve the reorganization plan (or sale) is now scheduled for next Wednesday. Delphi said it expects to announce the outcome of the auction perhaps by Monday. What’s a few more days after years in the tank?

This week's Thomson Reuters Investment Banking Scorecard shows bankruptcy-related M&A at a five year high.

There were five bankruptcy-related M&A deals announced during the week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million. 

So far this year there have been 173 bankruptcy-related deals, the highest level since the same period of 2004 when there were 202.

During 2009 the most bankruptcy-related M&A deals have occurred in the industrials sector with 23 percent, followed by the media and entertainment sector with 16 percent. 

In terms of geography, U.S. targets represent 83 deals or 48 percent of the total of bankruptcy M&A.

This is hardly surprising given the speed with which some of the biggest bankruptcies have happened in the U.S. -- with a little help from section 363 easing rapid asset sales at GM and Chrysler.

The rest of the world probably has some catching up to do.

A U.S. federal judge has authrorized the sale of General Motors’ most profitable assets to a “new GM,” backed by the government, in a move seen as crucial for the automaker to exit bankruptcy protection.

The decision by Judge Robert Gerber of the U.S. bankruptcy court in Manhattan came after three days of hearings to address the 850 objections to the restructuring plan. In his 95-page opinion, Judge Gerber wrote that the sale would “prevent the death of the patient on the operating table.”

Under the terms of the revised deal, G.M. would sell its best assets, including the Chevrolet, Cadillac, Buick and GMC brands, to a new company owned largely by the American and Canadian governments and a health care trust for the United Automobile Workers union.

That still leaves the question of the “old GM,” which includes Opel, Vauxhall and Hummer. Just as people thought that GM’s plan to sell Opel and Vauxhall to Canadian auto supplier Magna International was a done deal, China’s Beijing Automotive Industry Holding made a concrete offer to buy both brands for $924 million. That leaves the future of Opel uncertain for now.

Also not a done deal: GM’s plan to sell Hummer to China’s Sichuan Tengzhong. The potential buyer is in talks with Chinese regulators to win approval for its acqusition, but there are no guarantees it will get the green light.

General Motors is back in bankruptcy court on Wednesday, seeking approval to sell its choice assets to a “New GM” in a plan to reinvigorate the automaker under U.S. government ownership.

Reuters reporters Emily Chasan and Phil Wahba will be filing updates from the hearing in the live headline box below and on the DealZone Twitter feed.

Lear is preparing to file for bankruptcy as soon as next week, The Wall Street Journal reported on Thursday, citing people familiar with the matter. The auto parts supplier’s lenders have agreed to waive defaults under its primary credit facility through June 30. The ventilator may still be working, but the decision on whether to pull the plug will soon be at hand.

Last week, the White House rejected a request from the auto parts industry for up to $10 billion in additional emergency funding. Yesterday, General Motors CEO Fritz Henderson made the case that a speedy exit from bankruptcy for the automaker was the way to avoid a “fatal” blow to suppliers.

Henderson said tentative plans to resume operations at some GM plants by July 13 could be endangered if the court does not approve the sale of the its best assets to a reorganized company funded by Uncle Sam.

Bankruptcy court is a busy place. Lear could be arriving just as the court hears arguments on GM’s asset sale, scheduled for next Tuesday, June 30. On the face of it, there isn’t a whole lot to discuss. There are no other bids out there to rival the government’s $60 billion financing for GM, though some of the automaker’s smaller unions have filed objections to the sale.

So far this year, at least 15 auto parts suppliers have filed for bankruptcy or had their assets seized by creditors, according to the Motor & Equipment Manufacturers Association. The casualty list includes Visteon, Metaldyne Corp and Noble International Ltd.