China has overtaken the U.S. as the world’s biggest market for automobiles, the first time any other country has bought more vehicles than the nation that produced Henry Ford, the Cadillac and the minivan. Now that the Chinese buy more cars and trucks than Americans, the shift could produce ripples for the environment, gas prices and even the kinds of cars automakers design.

When auto industry veteran Bob Lutz returned to General Motors in 2001 after 30 years with other companies, he quickly grew tired of GM’s numbers-oriented bureaucracy. He printed up sticky notes that asked, “Says Who?“ Lutz stuck his credo on walls and bulletin boards in a public challenge to the lumbering corporate culture. In announcing another sudden management overhaul yesterday, GM Chairman and acting CEO Ed Whitacre Jr. was speaking Lutz’s words when he told employees that the bureaucratic mind-set needs to end and they can take reasonable risks without fear of being fired.

Ford is cranking up the horsepower on the 2011 Mustang as it tries to win back muscle-car sales from its archrival, the Chevrolet Camaro. Ford Motor Co. introduced a 305-horsepower V-6 engine for the Mustang at the Los Angeles Auto Show this week. For anyone counting, that’s one horse more than the Camaro’s V-6. And it’s far more powerful than the 210-horsepower V-6 on the 2010 Mustang.

General Motors Co. and Chrysler will reconsider decisions to close thousands of dealerships as part of a compromise meant to stave off federal legislation that would require them to keep the showrooms open. The decision by the two automakers, announced yesterday, raises the prospect of new life for some of the more than 3,000 dealerships that were slated to close as part of the broad auto industry restructuring. Dealers loudly have protested the decisions, and some said yesterday that the policy is merely an attempt by the automakers to placate Congress.

General Motors Co. CEO Frederick “Fritz” Henderson stepped down yesterday after the board determined that the company wasn’t changing quickly enough. Chairman Ed Whitacre Jr. said at a hastily called news conference that he will serve as interim CEO, and an international search for a new CEO and president is planned. Whitacre thanked Henderson for his work during a period of challenge and change, but said it is time to accelerate the pace of rebuilding the largest U.S. automaker.

A tire plant that has been a key part of the Scottsville economy for decades will shut down in January, the town’s mayor said this week. “It is extremely unfortunate that Hyosung has chosen this time of year to so negatively impact its 106 Scottsville employees; the town’s deepest sympathies go out to those individuals and their families,“ Scottsville Mayor John R. Snoddy IV said in a statement.

Ford, the only Detroit automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a “solidly profitable” 2011.

With sales down sharply and pressure to generate cash before government loans run out, Chrysler CEO Sergio Marchionne shook up his executive team yesterday, replacing two of his brand managers after just four months and splitting Dodge into car and truck units. The changes show Marchionne’s penchant for moving quickly and demanding performance, industry analysts say. But it’s also a sign that all is not well inside the company’s sprawling headquarters complex in the Detroit suburb of Auburn Hills.

Hyundai Motor Co.—not the up-and-coming Chinese, nor the leaner meaner Americans—is the automaker that has the Japanese seriously worried. Talk to any Japanese auto executive, and the official is likely to say the South Korean automaker is rapidly emerging as the most feared competitor to Japan’s world-leading car companies. “Hyundai is awesome,“ said Honda Motor Co. Chief Executive Takanobu Ito in an interview with The Associated Press this week. “They are undoubtedly a threat because their products are cheap, and the quality is improving.“

NEW YORK When you think about car safety, you think brakes, air bags and seat belts. Now, you should check floor mats, too. The carpet in your driver’s footwell is at the center of what will be Toyota’s largest-ever U.S. vehicle recall, prompted by a fatal crash. The problem: Gas pedals in some Toyotas could become caught under the edge of floor mats. That may have led to a car cash that killed four people in August outside San Diego.

General Motors Co. said yesterday that it would shut down its Saturn division after an agreement to sell it to Penske Automotive Group Inc. fell apart. “This is a major disappointment. It’s discouraging,“ said Haywood “Huddy” Hyman Jr., owner of Saturn of Richmond on Midlothian Turnpike in Chesterfield County. Hyman was one of about 400 Saturn dealers notified yesterday afternoon that his dealership would close after the Bloomfield, Mich., dealership group headed by auto-racing magnate Roger Penske was unable to find a manufacturer to supply vehicles to it after a contract with GM runs out in 2011.

NHTSA: (888) 327-4236
  Toyota: (800) 331-4331
  Lexus: (800) 255-3987

Owners of Airport Motor Co. have closed its used-car sales operation and put the property on South Laburnum Avenue up for sale for $5 million. The 4.9-acre site in eastern Henrico County once housed Airport Chrysler Jeep. The Lawrence family, which owns the property, had been Chrysler dealers in the Richmond area for about 75 years. In May, the family was notified that it was among the 789 Chrysler dealers losing their franchises after the manufacturer entered bankruptcy.

Pickup trucks and sport utility vehicles were big sellers under the Cash for Clunkers program, despite the federal government’s focus on replacing gas guzzlers with more fuel-efficient cars. Data released late last week by the Department of Transportation shows that tens of thousands of trucks, minivans and SUVs with relatively low gas mileage were among the nearly 700,000 vehicles sold under the program in July and August.

WASHINGTON—The government has compensated dealers for 70 percent of the cars sold under the popular Cash for Clunkers program and they should be fully paid by the end of September, the transportation secretary said yesterday. Secretary Ray LaHood told the National Automobile Dealers Association that 478,000 of the nearly 700,000 car vouchers have been paid, or about $2.4 billion.