Fiat is seeking a $3 billion payment from GM to cancel a put option that would let it sell its loss-making and indebted car business to GM says the Automotive News. Citing sources at Fiat, the industry paper said GM had in turn offered $500 million to exit the put, whose validity it disputes. The two companies' chief executives meet in person within 20 working days from December 16. If they cannot reach an agreement within 10 working days after the meeting, either party can take the matter to court.

General Motors is in talks with BMW about using the German manufacturer's high-performance diesel engines in its Cadillac luxury cars in Europe after doubling forecast sales in the region. Cadillac has doubled its forecast for European sales from 10,000 cars a year by 2010 to 20,000, and development of a new smaller car based on the Saab 9-3 is under way. GM see Cadillac as their best shot at a global brand.

Honda may file additional lawsuits against nine Chinese automakers in addition to two already filed, accusing them of copying the design of its CR-V sport utility vehicle. Honda filed suit against Shijiazhuang Shuanghuan Automobile Co in November 2003 and Hebei Xinkai Automobile Manufacturing Co at the end of November 2004, alleging infringement on the CR-V's designs, the Japanese automaker said.

Hyundai is targeting 15 % sales growth in Europe next year to about 400,000 units. Hyundai's auto sales in Europe are estimated to have jumped more than 20 % this year. But analysts warned a stronger won and soaring steel prices were darkening the 2005 outlook for the industry. Hyundai is expected to win a 2.1 % share of the European car market for the whole of 2004, compared with 1.8 % in 2003.

Iveco has agreed to develop a long-term partnership with Shanghai Automotive Industry Corp., one of the largest Chinese automakers, for building trucks and other industrial vehicles. The agreement is one of several that Italian companies have signed with Chinese counterparts during an official visit by Italian President Carlo Azeglio Ciampi and a delegation of entrepreneurs, including Luca Cordero di Montezemolo, chairman of Italy's Confindustria business lobby and the Fiat group.

MAN has joined forces with U.S.-based Navistar International to design, develop and manufacture components and systems for trucks and buses. The alliance means the 2 firms will even cooperate on a range of diesel engines, though the allies will remain fully independent entities. MAN's trucks and coach buses unit earned $161.5 million in 2003 on revenue of 6.7 billion. Navistar's operating company, International Truck and Engine Corporation, posted revenue of $7.34 billion in fiscal 2003.

More vehicles have been recalled in the USA so far this year than ever before. Manufacturers have recalled about 25 million vehicles so far in 2004, topping the previous high of 24.6 million in 2000. GM alone has recalled 10.5 million vehicles in North America -- the vast majority in the United States -- up from 7.8 million in 2003 and 5.7 million in 2002. Toyota has recalled roughly 890,000 vehicles in the United States this year, four times as many as in 2003.

Nissan and a local partner will spend $362 million on an engine plant in southern China to help it sidestep hefty import tariffs on auto parts. The plant, to be built in Guangzhou by Nissan and China's Dongfeng Automotive Investment, will start up in early 2006 and be run by their joint venture, Dongfeng Motor Co. Ltd.

Porsche has asked Toyota to share the hybrid technology used in its popular Prius model says a Japanese newspaper. Toyota is taking a positive view of the proposed deal and expects to start negotiations soon. According to Reuters, the paper said Porsche is likely to want to use the technology in its Cayenne SUV, rather than in smaller sports models - developing its own hybrid technology would be difficult for a relatively small company.

PSA Peugeot Citroen has had offers from at least 2 buyers interested in its Panhard military vehicles unit. French defense-electronics company Thales is thought to have made a joint bid with Renault Trucks Defense, a military division of French car maker Renault's truck business.The Societe Nouvelle des Automobiles Auverland has submitted a bid for the unit, which makes light armored vehicles for the French and other armies.

PSA Peugeot-Citroen is embarking on a 3-year plan to improve the quality of components it gets from its 700 suppliers. PSA wants to reduce the overall rate of faulty parts (usually measured in parts per million or PPM) by 25 % every six months through the end of 2007. Mathematically, that would mean an 82 % reduction by the end of the program.

Renault will invest $572 million in South Korea over the next 3 years to build an engine plant and expand its Asian production. Renault's chairman Louis Schweitzer announced the plan in Seoul at the launch of SM7, a new sedan made by Renault Samsung Motors. Renault, 44 % owner of Nissan Motor Co, will build a new plant for next-generation engines in South Korea's southern city of Busan where the Renault Samsung is located.

Scania™s distributor in Algeria, Mavia, has sold 150 trucks to haulage company Tonic Emballage in Algiers. Of these, 120 will be assembled in Sweden and the Netherlands in January next year, making them among the very last of Scania's 4-series trucks to be built in Europe. The remaining 30 tractor units will be assembled locally in Algeria by Mavia at the company's facility in Oued Smar just outside Algiers.

Tata Consultancy Services, India's top software exporter has won a multimillion dollar deal with Ferrari to design Formula 1 engines. Specialists from Tata will help develop an engine for 2006 season beginning in March. Ferrari spokesman Luca Colajanni confirmed that a 3-year deal was signed but declined to disclose its value.

Toyota plans to build a factory in the Russian city of St. Petersburg, the first local production in that nation by any Japanese carmaker says the Kyodo news agency. The plant would start production in 2006. Toyota has been exporting its Corolla passenger cars and sport-utility vehicles, but with demand rising, it has decided to start local production, Kyodo said. Company officials were not available for comment.

Toyota leads the industry in convincing its owners to buy another new vehicle from the automaker, says J.D. Power and Associates. Toyota keeps 60.6 % of its owners and Lexus keeps 59.5 % according to the firm's 2004 Customer Retention study. The overall industry average was 48.4 %. At the bottom of the rankings was the now-discontinued Oldsmobile division. Above it were Isuzu, with a retention rate of 7.0 percent; Mazda at 23.1 %t; Saab at 30.5 %; and Suzuki and Infiniti tied at 31.4 %.

Toyota expects its groupwide auto sales to rise 7% next year to a record 8.03 million vehicles globally as it boosts its production capabilities in almost every corner of the world. That would follow a 10 % rise in sales by the group, which includes minivehicle maker Daihatsu Motor Co. and truckmaker Hino Motors Ltd., in 2004 to an estimated 7.47 million units -- the first time above 7 million.

VW is working with 5 other European manufacturers in a joint campaign to let the cars of tomorrow beam wireless warnings of danger to surrounding motorists. The idea is to set up common technical standards and assign frequencies for a car-to-car network that would spring into action if vehicles encountered thick fog, sheet ice or accidents on European streets. The other participants are Audi, BMW, DaimlerChrysler, Fiat and Renault.

Volvo Cars has moved a step closer to producing small cars in China, signing an agreement in principle to build cars in Chongqing the first manufacturing by the Ford Motor-owned group outside Europe. The Swedish producer is expected to sell 3,000-4,000 cars in China this year, mainly its S80 large saloon and the XC90 SUV. However, it is keen to enter the smaller-car segment, where imports are difficult because of tariffs.

On the lighter side .... some strange but true stories.

A man in Northern Ireland was arrested for having an out of date tax disc on his car. He had parked his car next to a police car in a Belfast shopping centre.

Hundreds of drivers in France have been sent speeding tickets by a new speed trap in Sarthe for doing 70km/h in a 90 km/h speed zone. Refunds are now being made.

Road workers in Coppersville, Kansas, have been urged to speed up repairs on a local road so that couples can use it as a lover™s lane again.

Police in Germany had to wake a driver who fell asleep while stuck in a huge traffic jam on a Berlin motorway.

Drivers in Moscow who stop at pedestrian crossings could win a Lada. Motorists often ignore the stripes on the road, but police plan to log the details of considerate road users and award a prize.

Veteran driver George O™Malley, 97, of Quebec, Canada has such a good driving record that his insurance company has reduced his premium to 1 cent. He has made just one claim in 80 years of motoring.

A dog which leaped from a car travelling at 70 mph through Bari, Italy has survived, Barney the hound landed on the motorway after the car™s boot suddenly opened.

A London bus drivertook his passengers on an unintended 90-minute detour around the city after getting lost. Passengers boarded the number 274 bus in Camden Road for a 25-minute ride to Marble Arch. Instead they were treated to a ˜magical mystery tour™ around London™s back streets. Some passengers shouted out directions from their seats. A London Transport spokesman has apologized and said: ˜He was a new driver™.

Banned driver Richard Green, 24, gave police in Brisbane, Australia a false name and address after being pulled over while driving his parent™s car. He was arrested and charged as he forgot that he had his name tattooed on his arm.

An ambulance racing through the streets of Naples, Italy, with its blue lights flashing and sirens wailing, was actually delivering pizzas to hospital staff. The crew has been suspended.

Thieves had to abandon an Opel Chevette in Lille, France when its wheels fell off. The owner had heft the wheel nuts loose because he was working on the car.

Peter Heinz of Menz,Germany, cut down a tree in his back garden and found a set of car keys he had lost 30 ago. They were tucked inside a bird™s nest.

Police who stopped a female motorist in Indiana after a 120mph pursuit found she was wearing only a seatbelt. She told them that she fantasised about being chased.

Dehli motorist Santhosh Kumar is claiming a record after driving 375 miles by steering with his knees. His hands were tied to the seat during the entire 15-hour trip.