New Ford hybrid sedans post 41 mpg in the city

Ford Motor Co. said today that its Ford Fusion and Mercury Milanhybrid sedans have been certified by the EPA at 41 mpg city/36 highway.

The ratings put the hybrids' fuel economy at the front of the mid-sized pack, Ford said in a statement. Ford engineers spent three years revamping the gasoline-electric powertrain that debuted in the 2004 Escape Hybrid crossover.

The announcement underscores efforts by the Detroit 3 to bring more fuel-efficient vehicles to market.

During recent congressional hearings for federal bailout funds, the Detroit 3 were criticized for their past adherence to larger vehicles with poor fuel economy.

The latest version of Ford's hybrid powertrain again uses a one-speed continuously variable transmission. The size of the gasoline engine has been increased to 2.5 liters from from 2.3. The nickel-metal hydride battery pack is smaller and lighter but puts out 20 percent more power.

The Fusion Hybrid arrives in dealerships next spring with a base price of $27,270, excluding delivery charges that have not been announced. No price has been announced for the Milan Hybrid.

Competition is stiff among fuel-efficient cars.

Volkswagen's compact diesel-powered Jetta sedan delivers 30 mpg city/41 highway, while the Honda Civic Hybrid sedan gets 40 city/45 highway. The Toyota Camry Hybrid, similar in size to the Fusion and Milan, is rated at 33 city/34 highway.

But Ford may have the edge when it comes to driving on pure electric power. The Fusion Hybrid and Milan Hybrid can reach speeds of 47 mph on electricity alone, a higher speed than other hybrids.

"The Fusion Hybrid's ability to run at much higher speed in electric mode allows drivers to maximize fuel efficiently in many driving situations," said Praveen Cherian, Fusion Hybrid program leader. "This would allow drivers to travel around their subdivision and parking areas in all-electric mode."

Pininfarina eyes year-end debt deal

After months of talks that have forced it to postpone a crucial capital increase, Italy's Pininfarina said today it still expected to reach a deal with its creditors to reschedule its debt by year-end.

Like other suppliers and service providers in the car industry, the small designer and niche manufacturer has been struggling to pay off its debt.

Its business has been suffering since clients such as Ford Motor and Fiat's Alfa Romeo have seen their sales tumble in the worst crisis to hit the industry in decades.

One client, Swedish luxury brand Volvo, has had such a hard time that its owner, Ford, has put it up for sale.

Best known for designing Ferraris, Pininfarina was supposed to have reached an agreement with its creditors to reschedule 600 million euros of debt by Sept. 30.

But the talks stretched beyond the deadline.

Since a deal had been a prerequisite for a capital increase of 100 million euros, Pininfarina was forced to abandon its plans to raise the money in November. It was to use it for a joint venture with French financier Vincent Bollore to develop an electric car, a project pivotal to Pininfarina's revival.

The talks eventually led to Pininfarina proposing the banks convert 180 million euros of debt into shares representing up to 30 percent of the company.

The founding family had been ready to cut its stake to about 30 percent from more than 50 percent with the capital increase to a select group of investors including Bollore. But this latest proposal to the banks, announced on Nov. 12, was seen substituting that idea.

Other select investors had included Ratan Tata. But the Indian business leader has had his own money problems, with his Tata Motors finding it hard raising money to pay the $3 billion bridge loan obtained to buy Jaguar and Land Rover.

In light of plunging sales, Pininfarina has been cutting costs by halting production at its three plants on a rotating basis for one week a month in November and December. It plans to do the same thing for all of 2009.

Its creditors include Italian banks Intesa Sanpaolo and UniCredit.

Tata may need to invest $1B in Jaguar

 India's Tata group may have to spend at least $1 billion to revive premium brands Jaguar and Land Rover, which were bought by Tata Motors earlier this year, the Economic Timesreported on Tuesday.

Tata Sons, the holding company that holds large stakes in group firms, and unlisted financial services unit Tata Capital are among the options being considered to raise the cash, the newspaper said, quoting unnamed company sources.

"We will do everything in our ability to resource all our operations," the paper quoted a Tata Motors' spokesman as saying. Tata Motors paid $2.3 billion to buy Jaguar and Land Rover from Ford Motor Co. earlier this year, just as global auto sales began collapsing. He declined comment on the size of funds required.

A spokesman for Tata Motors could not be immediately reached by Reuters for comment.

On Monday, UK's Financial Times had reported that Tata Motors had agreed to inject "tens of millions of pounds" into Jaguar and Land Rover to prevent an immediate cash flow crisis.

Tata Motors, which has a market value of about $1.5 billion, has dropped 74 percent so far this year while the main BSE index is down more than half.