The trouble with relying on China as the future of the global car industry is that the people in the People’s Republic have lost some of their voracious appetite for new vehicles. The China Association of Automobile Manufacturers reports that, in January, sales of cars and light vehicles dropped 23.8% year-over-year. Analysts blamed the lunar holiday. But sales rose only 5% in all of 2011. So, the market has softened considerably.

China may produce sales of 18 million vehicles per year, well above the 13 million or so in the U.S. But car companies realize that American car sales are rising rapidly, while Chinese sales are not. The U.S., just two years ago the black hole of car sales, has become a foundation for revenue of multinational manufacturers. China has become a market where large investments in factories and marketing is a problem, at least for awhile.

Another challenge for foreign car companies in China is that local companies have grown tired of watching manufactures from the U.S., Japan and Europe exploit their market. All of the large local firms have learned manufacturing from their joint venture partners like GM and VW. That gives them the ability to stand on their own, and that can only hurt the sales of outsiders.

China has lost some of its luster for foreign car companies — that is, sales there have faltered — for a a number of reasons. Among them is that China’s middle class faces the effects of an economic slowdown and an inflation rate that hit 4.5% last month. And many Chinese cars are still relatively new. The factor of the replacement of cars that are six years or older, which is the cause for much of the improvement in sales in the U.S., is not as large a factor in China. There, the really huge volume in annual sales only happened in the past several years. The Chinese may not be ready to trade their cars in yet.

China, once the biggest hope for sales by global car companies, cannot sustain the revenue increases that the industry hoped it would.

Douglas A. McIntyre

Nissan reported a strong fiscal third quarter. Profits rose 4% to $1.54 billion. The firm sold 1.2 billion cars and light trucks, up almost 20% from the same period last year. Just one day earlier, Toyota said its earnings for the quarter were higher than expected. Just ahead of its earnings announcement, it raised its full-year forecast for sales to 9.58 million vehicles for the fiscal year. That will put it on a path to reclaim the global sales lead from GM and Volkswagen.

In Europe, Opel has set a collision course with unions, particularly in Germany. Opel has lost $13 billion since 1999. GM says it will restructure the entire unit, this as car sales across the region falter. The region’s large car union is allowed to appoint several members to the Opel board. They will give one of those seats to Bob King, the head of the U.S.-based United Auto Workers, which is a sign they are ready to strike.

Nissan and Toyota have had nearly no labor problems, particularly in the regions that matter most to them: the U.S. and China. The car industry battles with the UAW were largely won by the large manufacturers during the recession as GM and Chrysler went into Chapter 11 and the balance of the industry incurred huge losses. The relationship between the Big Three and the UAW actually have improved as the companies have paid bonuses to workers because of a profit recovery.

Opel remains caught in the jaws of an old business model. Labor has a substantial say in the operations of many of Europe’s car companies. But most of those firms, which include BMW, Mercedes and VW, have large sales bases outside Europe. Opel does not.

Opel’s near-term future will be determined by whether it can build a bridge to the new car manufacturing system. It is one in which union workers will lose jobs. But the jobs of those who remain will be relatively secure, because a restructuring will bring down the breakeven point of sales needed to make a profit. Without such a deal, Opel will continue to lose money. Large strikes against the company will make that worse and actually could cause the number of jobs eventually cut to soar. Opel does not have much to lose while it remains pressured by huge losses.

Douglas A. McIntyre

A House committee pushes through plans for a reconsideration of the Keystone XL pipeline. (Reuters)

The chairman of Yahoo! (NASDAQ: YHOO) to leave. (Reuters)

Nissan posts better earnings on strong sales. (Reuters)

An attempt to bolster money market funds may involve setting up a capital buffer and blocking redemptions for 30 days. (Reuters)

A hacker releases source code from security firm Symantec (NASDAQ: SYMC). (Reuters)

Amazon.com (NASDAQ: AMZN) and Viacom (NYSE: VIA) may close a transaction to allow the e-commerce company to stream premium video from Viacom properties. (Reuters)

The European Central Bank will change the treatment of its Greek debt to try to salvage a bailout deal. (WSJ)

Some large investors disapprove of a merger deal between Glencore and Xtrata. (WSJ)

General Motors (NYSE: GM) will again try to cut workers at Opel. (WSJ)

UBS (NYSE: UBS) to cut bonuses by 60%. (WSJ)

CalSTRS says it has concerns about the diversity of Facebook’s board. (WSJ)

Apple (NASDAQ: AAPL) asks the European Telecommunications Standards Institute to set rules for patent licensing among mobile device companies. (WSJ)

Italian Prime Minister Mario Monti believes Europe must move beyond austerity to plans that will help create growth. (WSJ)

U.S. businesses upgrade plants and move jobs back to the U.S. (WSJ)

European sales of U.S. companies rose in the fourth quarter, which may cause a problem this year as the region’s economy slows. (WSJ)

Six Spanish banks to set aside €11.8 billion because of real estate trouble in the country. (WSJ)

India becomes more open to foreign investment as its economy slows. (NYT)

As Greece fails to set a deal on its debt, more workers go on strike. (NYT)

U.S. stocks reach a six-month high. (FT)

Collateralized mortgage obligations, one of the causes of the credit crisis, are again popular investments for banks. (FT)

Prices for Canadian oil drop sharply as supplies surge. (FT)

Nokia (NYSE: NOK) to fire 4,000 and move more production to Asia. (Bloomberg)

The Illumina (NASDAQ: ILMN) board rejects a $5.7 billion offer from Roche. (Bloomberg)

Douglas A. McIntyre

BP Fights On

The crisis at BP (NYSE: BP) due to the Deepwater Horizon disaster seems long gone. It is not. BP signaled an improvement of its financial health with a dividend increase. At almost the same time, the UK-based firm said it would “vigorously” contest suits against it because of the spill. That vigorous defense of actions will take years. The first major suits against it will be filed this month. Large liability cases brought by governments and private enterprises against major companies before indicate that the process of trial and settlement talks can drag on seemingly forever.

Toyota’s Recovery

Toyota (NYSE: TM) announced the start of an unexpectedly rapid comeback from recall problems and the shuttering of many of its plants due to the Japanese earthquake of last March and more recent interruptions of its supply lines due to floods in Thailand. Toyota made $1.1 billion in the quarter that ended in December. Toyota raised forecasts for net and operating profit. The company still has to regain market share in the U.S. and gain on Volkswagen and General Motors (NYSE: GM) in China, the world’s largest car market. Its market share in the U.S. reached almost 18% four years ago, and it briefly moved ahead of Ford (NYSE: F). Its portion of the market is down to about 12%, and its has competition from resurrected GM and Chrysler, as well has rapidly selling new cars and light trucks made by South Korean manufacturing behemoth Hyundai.

Lumia 900 Launch

Nokia’s (NYSE: NOK) Lumia 900, its new flagship product, is about to go on sale in the U.S. The launch carries with it the hopes of a comeback for the world’s largest handset maker and its software partner Microsoft (NASDAQ: MSFT). Microsoft has had terrible trouble as it struggled to sell its mobile OS against Apple’s (NASDAQ: AAPL), as well as smartphones that use the Google (NASDAQ: GOOG) Android platform. The recent history of smartphone launches shows that the fate of products usually is determined in the first few days they are available. Reports of strong sales bring new customers into stores. Reports of weak sales cause analysts and the press to label a new product DOA.

Douglas A. McIntyre

Read America’s Ten Shrinking Corporate Giants

Large companies can lose a significant amount of their revenues because they get into a great deal of financial trouble. A company may lose part of its customer base quickly because of economic forces, or it may be part of a financial catastrophe. As a result, the company’s revenue declines, and it begins to post large losses. In cases like these, companies often are forced to sell divisions to fund their survival. Alternatively, companies may close some of their operations that drain capital. General Motors and Citigroup are good examples of this category. Each moved from relative prosperity to difficulty in a very short period.

The other reason large companies shrink quickly is by design. The management of a corporation created by merger or acquisition activity may find that some of its pieces no longer fit together. One division may grow at a much higher or slower rate compared to others. Also, the way the stock market values one part of a large corporation may change because it is in a category Wall Street no longer favors. That, in turn, becomes a burden on the stock price of the entire enterprise. Telecom hardware company Motorola Solutions and media giant Time Warner fall into this category. Each is smaller than it was five years ago because it spun out a major business.

24/7 Wall St. used Capital IQ to screen the largest companies in America based on total revenue in 2006. We then screened for those that had the largest drops in total revenue between 2006 and 2010. Most of the eight companies on this list lost a third of their total revenue over the period, and some lost more than half. The list is ranked by total revenue loss from greatest to least.

This is 24/7 Wall St.’s list of America’s Shrinking Corporate Giants

The strengths that Ammann cites could easily be turned against it. The first is that its market share and pricing are strong in the U.S. That has made it the primary target of the largest manufacturers — Ford (NYSE: F) and Toyota (NYSE: TM). Ford already has proved it can do well in the U.S., and has since GM and Chrysler went into Chapter 11. After two rough years, Toyota’s plants are back online at full production. The Japanese quake of last March had idled some of them. America’s number three U.S. car company, Chrysler, is now its fastest growing. That is another challenge to GM’s plans. Perhaps just as great a danger to GM is the success of several niche firms. These include BMW and Mercedes at the high end of the market and Hyundai and Kia in the mid- and low-priced segments.

GM also says it can rely on China, the world’s largest car market. That plan has two barriers. The first is that the growth of the market for cars and light vehicles in the People’s Republic has slowed. The other is the GM no longer just competes with other foreign car companies in China. Local firms want to take market share from GM and have begun to bring on the manufacturing capacity to do so.

GM’s Achilles’ heel is its EU operation, Opel. Opel has not made it through a restructuring the way GM has in the U.S. There is still a battle between GM’s money-losing unit and local unions. And some EU nations are anxious to make sure GM keeps jobs within their borders. GM has a union problem in Europe, and it also has a political one.

GM’s CFO would have been better off saying that GM is a world-class car company with a bright future and left it at that.

Douglas A. McIntyre

China’s GDP Growth

The IMF cut its forecast of China’s GDP growth this year. Given the uncertainties about the global financial markets and the GDPs of many nations, that move it not unusual. What is shocking is the size of the negative forecast — China’s GDP growth rate could drop 4% from the current estimate of 8.2%. And the 8.2% is a number reached by a downward revision by the IMF less than two months ago. It is hard to fathom that an economy that has grown at more than 10% a year for the past decade could face such a shock. It is the IMF’s acknowledgement that the entire world could teeter into recession, and that the problems in Europe could effect both China’s trade with that region, but also with the U.S. The latter will not avoid the slump either, the IMF must reason, despite recent, strongly positive signs.

Foreclosure Abuse Deal

State attorneys general and U.S. regulators are just a day from a settlement with Ally Financial, Bank of America (NYSE: BAC), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC) and JPMorgan (NYSE: JPM) over mortgage foreclosure abuses. The settlement would help current homeowners. Some would be allowed to refinance current home loans. Others would get financial assistance. Even if the deal is closed, the implementation could take months. It will take at least that long to sift through which homeowners are worthy of aid, and then to process them to help those who deserve it. The entire face value of the settlement will be $25 billion.

GM Profit Forecast

General Motors (NYSE: GM) says it can make $10 billion a year for the next several years. That would mark a tremendous comeback from its 2009 Chapter 11 filing. It also would validate the decision of the U.S. government to bail out the car company. The challenge GM faces as it presses its goal is that the world’s largest car manufacturers, Volkswagen and Toyota (NYSE: TM), expect to do as well as GM. Toyota just raised its sales forecasts to levels that would take it to a record in units shipped next year, if it can reach the numbers. VW has attacked the U.S. market because it needs American sales to allow it to keep pace with its two major rivals. GM has momentum, but its profit forecasts are large enough to make an uphill battle.

Douglas A. McIntyre

Glencore offers an 8% deal to close a buyout of Xstrata. (Reuters)

HTC has trouble demonstrating that its stock is worth its premium. (Reuters)

The head of Deutsche Boerse says there will be industry consolidation despite the failure of a deal with NYSE Euronext (NYSE: NYX). (Reuters)

U.S. corporate profits for the past quarter were choppy. (WSJ)

Greek leaders still have not settled disagreements to close a round of financing. (WSJ)

Federal and state prosecutors are set to settle a mortgage fraud deal with five banks. (WSJ)

A JPMorgan (NYSE: JPM) banker will be named head of the FDIC. (WSJ)

Chinese leaders offer aid to the EU but try to make certain it is understood they do not want to “takeover” European finances. (WSJ)

The International Monetary Fund cuts its target for China GDP growth. (WSJ)

Las Vegas Sands (NYSE: LVS) and Malaysia’s Genting continue to press for casinos in Florida. (WSJ)

The National Automobile Dealers Association says used car prices could rise 1.2% in 2012. (WSJ)

Activists get Hewlett-Packard (NYSE: HPQ) to agree to a deal that would make it easier for shareholders to push out board members. (WSJ)

Individual investors take on more risk because of low bond yields. (WSJ)

Retail shoppers likely will cut activity. (WSJ)

High Chinese export prices help Mexico. (WSJ)

An increasing number of print and online media turn to video content. (NYT)

Facebook has not found a way to make money on its mobile users. (NYT)

Greece says it would cut its budget further to get a rescue package. (NYT)

The European Central Bank will challenge capital structures of a number of the region’s banks. (FT)

Iran may not cut oil supplies to Europe as it said it would. (FT)

Global sales of junk bonds hit record levels. (FT)

The IMF says China’s growth could drop 4% from the current projection of 8.2% if global economic problems persist. (Bloomberg)

Many hedge funds will be hurt badly if their bets on Greece go wrong. (Bloomberg)

Indonesia’s economy hits its best growth rate since 1996. (Bloomberg)

The ECB may drop some sovereign debt demands for the region’s banks. (Bloomberg)

Douglas A. McIntyre

Read: The Eight Brands That Wasted the Most on the Super Bowl

Between 2002 and 2011, companies spent $2.5 billion on Super Bowl advertising, based on 24/7 Wall St.’s estimate. The top 10 spenders were responsible for more than one-third of that. And one company, Budweiser maker Anheuser-Busch, spent almost $250 million over the past 10 years on Super Bowl ads, or a whopping one-tenth of all Super Bowl ad spending.

24/7 Wall St. ranked total spending for all of the companies that advertised during the Super Bowl in the past decade. An analysis of the top spenders reflects how bad this investment can be. While some, such as Hyundai and Toyota have improved market share over that time, most have not. Based on total ad spending, product failures, change in market share, share price and sales, we identified the eight brands that wasted the most on the Super Bowl, including mega brands such as Coke, Budweiser, GM and Ford.

Based on 24/7 Wall St.’s analysis of Super Bowl ad spending, the top spenders fall into four major categories: automotive, film, food, including snacks and fast food, and beverages. Four of the top 10 Super Bowl advertisers are auto companies. Another four of the 10 are food and beverage manufacturers. Three movie studios are in the top 25.

Because Super Bowl ads are used by a small number of industries, many companies in those industries are forced to advertise just to keep up. Most of the top 10 spenders are perennial also-rans. Yum! Brands, owner of KFC, Taco Bell and Pizza Hut, spent $67 million over the past 10 years. Meanwhile, McDonald’s, the indisputable market leader, spent less than half that amount and is not a top 10 spender. Similarly, E*Trade, well-known for the talking baby campaign, spent more than any other online brokerage firm, yet remains fourth in the industry.

Also Read: AMR – Saving Corporate America one Bankruptcy at a Time

24/7 Wall St. tabulated all of the commercials from the past 10 Super Bowls, as archived by Adland, the “world’s largest archive of Super Bowl commercials.” Using that data, 24/7 calculated the number of commercials each company bought, as well as their length, including any available pregame, postgame and prime advertising commercials. To estimate the total amount each company spent on Super Bowl advertising in the past decade, we used the average costs of a 30-second commercial spot each year and the total number of minutes of advertising time recorded by Adland.

These are the eight brands that wasted the most on the Super Bowl.

As we noted this morning, “The company said that fourth quarter pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has posted a pre-tax operating profit for 10 consecutive quarters. Revenue for the period was $34.6 billion up $2.1 from the year before’s quarter.”

Asia seems like a spot where Ford should not be weak on the surface, but again that was explained a in recent weeks (when CNBC accidentally called for a loss at Ford rather than a loss in operations in much of Asia due to the ongoing Thai flood issues). 

Our question is simple.  Can the dividend save Ford?  Ford was originally expected to reinstate its dividend at some point this year or even in 2013.  Unlike General Motors Co. (NYSE: GM), Ford is not under government restriction and it does not owe any bailout funds back to Uncle Sam.

New investors entering today will get a dividend yield of 1.5% now that shares are down 3.5% at $12.30.  Shares are still up handily in 2012 after closing at $10.76 on December 30.

The next boost is the coming replacement cycle here in the United States.  Maybe this is not as large of a growth market as Asia and Latin America, but the drastic age of the U.S. car fleet owned by Joe Public is the oldest it has been in our lives.  People can keep pouring a few hundred dollars here and a few hundred dollars there every few months to keep a clunker from clunking out, but eventually it is just cheaper to buy a new a car.

As long as the economy doesn’t fall apart rapidly, Ford’s dividend, the recovery after the Thai flooding, and the U.S. replacement cycle should all help Ford shareholders.

JON C. OGG