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EU formally questions French government assistance of Peugeot's finance arm

Recently, the finance arm of PSA/Peugeot-Citroën was in such debt trouble that it was pricing itself out of the car loan market. The rates it was paying to service its debt, which was rated one step above junk, were so high that it was forced to charge car-buying customers higher rates than they could find elsewhere. This was adding to Peugeot's already impressive woes by sending revenue out the door to competitors.
Two months ago a deal was worked out with the French government whereby the state would provide 7 billion euro ($9 billion USD) in bonds to guarantee the finance arm's loans. The French government could nominate someone to join the Peugeot board, Peugeot would guarantee more French jobs, and on top of that deal, other banks would provide non-guaranteed loans. The government would take no equity stake in the car company.
Although not yet finalized, the arrangement is meant to create some breathing room for Peugeot Finance to lower its interest rates for customers, and a government-nominated board member, Louis Gallois, was recently named to Peugeot's supervisory board. The arrangement was also openly questioned by at least three competitors: Ford, Renault - which is 15-percent owned by the French government after it received state aid - and the German state of Lower Saxony, itself a 15-percent shareholder in Volkswagen.

VW boss confirms Subaru-aping Golf Alltrack for US

Subaru needs to watch out, because the Japanese brand with a utilitarian image has a big bull's eye on its back. Not only is Acura considering going 100-percent all-wheel drive in a bid to mimic the successful automaker, Volkswagen has just confirmed that the Golf Alltrack is coming to the US as another competitor for Subaru's popular Outback crossover. Volkswagen Group of America CEO Michael Horn has confirmed the addition of the higher-riding, all-wheel drive version of the Golf SportWagen to Automotive News, indicating that the model will arrive in the US in 2016. "That's what our dealers, our customers, are asking us for," he said to the industry publication. The Golf Alltrack, which debuted at the Paris Motor Show in early October, has an extra 0.75 inches of ride height and protective black cladding all the way around. Its biggest mechanical differentiator from other Golfs is its Haldex all-wheel drive system, a setup that can completely unhook from the rear axle when not needed to save fuel. In Europe, the Alltrack is available with a turbocharged 1.8-liter with 178 horsepower and two diesels offering between 109hp and 182 hp. However, Horn made no mention of likely powertrains for the US. Horn tells Automotive News that all-wheel drive tooling is currently being installed at the Puebla, Mexico, factory where the standard Golf Sportwagen is built. VW might have tipped its hand about this possibility several months ago when press shots of the wagon were released for the US with TDI and 4Motion badges. Horn says he expects even the front-wheel drive version to be a sales hit here, suggesting it may eventually account for 50 percent of the Golf range's volume.

MotorWeek looks back at the 1986.5 VW Scirocco 16V

It's back to the past with MotorWeek for a video dive into the 1986.5 Volkswagen Scirocco 16V, the coupe that carried the pennant for VW's performance aspirations for 15 years, from 1974 to 1989. This one, the last generation, got the hottest of all by adding a head with four valves per cylinder. The 1.8-liter DOHC engine cranked out "an amazing" 123 horsepower and 120 pound-feet of torque, and made this model the fastest VW to ever be sold in America; it went from 0 to 60 miles per hour in 8.5 seconds, faster than a Porsche 944. To compare vintage apples to modern ones, the New Scirocco with a 123-hp 1.4-liter TSI engine and a manual transmission takes 9.3 seconds. We like MotorWeek's Retro Review series not only for the cars, but for how they also remind us of what we used to find important in cars. The Scirocco here gets upvoted for its throttle response and handling, downvoted for an oddly placed oil pressure gauge and lack of battery voltage meter. We can't remember the last time a voltage meter was mentioned in a review, either its presence or lack. Check out the video above for what the definition of "US hot hatch" used to be.