A new concept truck, dubbed A-BAT, will make its debut in the heart of the US auto industry at the 2008 North American International Auto Show in Detroit.

The design brain trust of the world’s most successful auto company is discreetly tucked away in a leafy suburb of Newport Beach, Calif.
Toyota’s (TM) Calty design and research facility sits inconspicuously at the end of a sleepy Orange County cul-de-sac. Surrounded by fountains and gardens, the studio radiates a monastic calm broken only by the sound of children playing in the yard of a nearby grade school, reported Businessweek.com.
Despite the Zen-like atmosphere, designers here have been brewing up creative disruption on four wheels for decades. Since it was established in 1973, Calty has served as the Japanese giant’s crucial toe-hold in the American auto market. The studio has created some of the company’s boldest and best-selling vehicles, including the 2005 Scion xB and the 2001 Highlander SUV. Now, Toyota’s American designers are at it again.
On January 13 the company will take the wraps off yet another vehicle that could have embattled American automakers scrambling to catch up.
A new concept truck, dubbed A-BAT, will make its debut in the heart of the US auto industry at the 2008 North American International Auto Show in Detroit. And there’s a twist: The tough-looking pickup packs a hybrid gas-electric power supply to reduce emissions and improve fuel economy.
The sleek vehicle is roughly the size of Toyota’s smallest SUV, the RAV4, despite looking much larger thanks to an oversize front grill and rough-and-tumble body design intended to delight truck aficionados. But in a marriage of red- and blue-state values, the truck was conceived as a gas-electric model.
The truck’s cabin is shaped like a trapezoid, as is the company’s flagship gas-electric, the Prius, with which it shares the Hybrid Synergy Drive system. “People gravitate towards sporty,“ says Matt Sperling, a designer with Calty. “If you inject utility into that, we think it’s win-win.“

Pickup Truck Wars
Earlier this year, Toyota overtook General Motors (GM) in global auto sales for the first time. And 2007 was a banner year for Toyota’s truck division in the US, as it introduced a redesigned full-size pickup, the Tundra, intended to compete with the last reliable profit centers of American manufacturers.
On top of rave press reviews, the vehicle earned the coveted Truck of the Year award from Motor Trend magazine in December, 2007.
The new A-BAT would potentially extend the ongoing dogfight into other segments of the US truck market. The vehicle is a compact truck that would fit into the company’s lineup below the Tundra and midsize Tacoma, which has grown in size over the years. The smaller A-BAT could prove popular with young buyers looking for a fuel-efficient but versatile vehicle.

Risky Business
On the face of it, producing the A-BAT might seem counterintuitive. After all, the market for small trucks has languished in recent years. A dearth of products has been punctuated by lackluster, infrequently updated models.
Merkle forecasts that US production of small and midsize trucks will continue to dive, dropping from current levels by some 28 percent, to 458,000 vehicles in 2009.
Unlike other flat-bed pickups, the A-BAT would likely be built on a car platform, improving fuel economy, safety, and handling.
Its small size, versatility, and hybrid power plant would set it apart from anything on the market or upcoming products from major manufacturers. “This is classic Toyota,“ says Merkle. “They’re positioning themselves ahead of the curve, preparing products for a generation of consumers that is still coming up.“
Certainly, growing environmental concerns, new government regulations, and the high cost of fuel have created interest in smaller cars, with new introductions in that category by nearly every major automaker in the past 18 months.
Most have been microsedans. The next frontier, analysts and designers say, is smaller vehicles shaped like wagons, vans, SUVs, and--perhaps--pickup trucks.

Surefire
The new vehicle is also another important symbol of how seriously Toyota takes the US auto market.
Whether or not the A-BAT makes it to market remains to be seen. However, the Calty team behind the new concept has a strong track record, reflected in a parking lot packed with vehicles that were created there.
The studio was responsible for the Toyota FTX concept truck, which eventually became the new Tundra. Its FJ Cruiser, a boyish 4x4 with Tonka-truck looks, was so popular with the public when it was unveiled as a concept in 2003 that Toyota scrambled to send it to production.
Despite Toyota’s reputation as a green technology leader, the A-BAT would not be the first hybrid pickup on the market. At the Los Angeles Auto Show in November, GM introduced an advanced hybrid version of its Silverado full-size pickup.
But GM’s track record in the hybrid market is spotty. A so-called mild-hybrid version of the 2005 Silverado sold dismally, and analysts don’t expect the company to sell more than 30,000 units annually.
If any manufacturer has the green gravitas to make a small, economical hybrid a hit--even a pickup--it is surely Toyota. Calty’s track record would suggest nothing less.

Sooner or later, the worldÕs hottest market will burn up.

The scene on the trading floor of the Shanghai Stock Exchange appears to be strikingly out of character for a market that is on fire. Situated in an iconic square building at the heart of Shanghai’s costly new financial district, it has a vast trading floor filled with orderly rows of obsolete, box-like terminals. Clustered in one corner are a dozen clerks, heads resting on desks, dozing peacefully.
According to Economist.com, on a purely objective level, the lack of activity on the exchange is the result of trading becoming fully electronic. But why, then, does the trading floor exist at all? A rather more worrying interpretation of the Potemkin village setup is that it does speak of something more than merely a shift to electronic trading.
The Shanghai market itself is a kind of fa�ade, at least in the Western sense where prices are set by broad forces of supply and demand, but rather a place where China’s government can provide the appearance of a modern economy, complete with a signature statement of modern finance and business: an equity exchange.
The result is an odd trading venue where companies are tied to shares but the shares do not carry genuine ownership rights, such as the authority to determine management (often directly controlled by the central government) or dividends. And, perhaps most importantly, it is not a trading venue where people believe shares are as likely to go down as to go up. Currently, they believe they can only go up.
This confidence has its roots in a spate of initial public offerings of government-controlled companies, each of which was deliberately priced to leap on opening day. Wealth made from flipping offerings proved to be contagious, particularly given the lack of alternatives. With few exceptions, China bans its citizens from investing abroad. At home, the choice is between savings accounts paying less than inflation or real estate with uncertain property rights.
The flood of money into shares has pushed stock prices so high that even China’s remarkable growth cannot justify them: 65 times trailing earnings on the Shanghai exchange in October 2007, and 75 times earnings on the exchange in Shenzhen, which caters to smaller companies.
The valuations are even more jarring because earnings are often inflated by corporate investment in the stock market, a circular logic that can just as easily come unwound. Similar distortions are also rife throughout the balance sheets of public Chinese companies as a result of recently adopted accounting rules that require assets to be revalued at prevailing prices, though the markets to set prices, for example in real-estate holdings and exotic securities, often do not exist.
In a normal stock market, speculators can deflate bubbles by shorting shares. That is illegal in China. In a normal stock market, investors can reap large rewards by having their investments bought in a heavily fought acquisition. In China, an acquisition must survive central planning (and often doesn’t).
Most of all, in normal markets, share prices are based on how a substantial amount of the shares in a company trade. In China, shares in many of the benchmark companies are held by the company or the government and do not trade. Prices are determined by just a few shares being batted back and forth.
If only a few shares are determining the overall valuation, it means only a few people need change their opinions for the market to unwind. Normally, a counter-balancing force for a sudden panic comes from contrarian-minded investors who believe an objective understanding of information provides a reason to buy shares as their prices become more reasonable. Put simply, crashing prices are an opportunity, not just a problem. But finding objectivity in the Chinese market is no easy task because information disclosure is wretched.
Companies, and the investment banks that coddle them, distribute information to favored investors but not to the market at large. For its part, the Chinese government broadly abets this process, granting selective permission to favored foreigners wanting to invest.
These insiders are comforting friends for China to have, but they are insidious forces for a genuine market. Instead, China needs disinterested outsiders--and insiders--free to do research, free to buy and free to sell. Yet the market in China has become an example of moral hazard gone wild. Historically, this is not uncommon.
Markets work in nasty ways and countries frequently try to control them. Critics are faulted for misunderstanding the local “culture“ or for missing the crucial fact that this time, really, is different. And then, inevitably, there is a crash.

Many companies are counting on the sales to expand quickly in the coming years as the next generation consoles become widely established in households.

Next-generation consoles have wowed gamers with breathtaking graphics, surround sound and stunning gameplay since coming on to the market in the past year.
Cutting-edge video games might be a dream come true for consumers around the world, but for many companies developing them, it’s been a nightmare. The movie-like productions on Sony’s Playstation 3 and Microsoft’s Xbox 360 games have meant that the cost of producing them has risen sharply.
Halo 3, an extremely popular game produced by Microsoft, is estimated to have cost $30 million. However, the American software giant was able to recoup that, and the millions more spent on marketing, straight away.
On its first day of sales, it brought in $170 million, setting the record for the most money earned in a day by an entertainment product. It far outstripped the money made in a day by Spiderman 3, the biggest-grossing Hollywood film.

Survival Game
Back in 1982, the Japanese company Namco produced Pacman for $100,000. Now, the average Playstation 3 title is estimated to cost $15 million.
Even after adjusting for inflation, that is still a significant rise. While production costs have tripled in recent years with the introduction of next-gen consoles, sales and revenue have hardly changed.
This means that for many of the smaller games companies, staying profitable is a serious issue. One such company is Blitz Games, based in Leamington Spa in the UK. Its founder and chief executive, Philip Oliver, says it’s a battle to control spiraling costs.
“These costs have risen so sharply because of the complexity of the devices which we are writing the games for,“ Oliver told BBC.
“The costs have risen most sharply on the graphics side. We have entered a new era of high-definition video gaming. This has led to team sizes having to increase in this area, for new tools to be created for this and generally the costs are rocketing. This is actually having a severe hit on the industry,“ he added.
Company bosses such as Oliver have needed to find novel ways of funding games development. Increasingly, this means outsourcing some of the work abroad.
Game Over
This is the biggest source of concern for the industry body, the European Games Developer Federation (EGDF).
With profit margins so tight, the line between survival and failure can rest on the sales from just one Christmas. The fear is that many companies will simply not survive the festive period.
“It is not unlikely that after Christmas, we may find there are some casualties,“ says EGDF chairman Fred Hasson. “Companies would have banked on a lot of their expenditure coming good during the Christmas period, when a good quarter or more of games are sold in the UK and in Europe. Lack of success could mean downward share prices and some companies getting into difficulty.“

Sink or Swim
Not everyone is sympathetic to the woes of the smaller players in the games industry.
Professor Danny Quah, head of economics at the London School of Economics, is one of them. He believes that we are now living in a digital economy, where almost all of the costs in starting up a new successful product are in research and development.
“The key feature in all of these digital goods is that they are expensive to create in the first instance, hence the heavy research and development outlay,“ Professor Quah says. “But subsequently they are practically costless to reproduce in billions and billions of copies.“
This gives major players like Microsoft and Sony an advantage. They can afford to invest huge sums in research and development of new computer games, to make the most of the even bigger profits.