Continental AG and Schaeffler Group have postponed plans to merge, says Handelsblatt, which cites the prospectus for Conti’s proposed  €1.1 billion stock sale.

The German newspaper also cites unidentified Conti sources who say the companies will not merge for at least a year for unspecified reasons. The two companies, which have skirmished since Schaeffler acquired control of Conti in a hostile takeover in 2008, agreed in June to merge.

The companies have struggled to reduce about €11 billion in debt each—Conti from its acquisition of Siemens AG’s VDO automotive electronics unit in late 2007 and Schaeffler from its Conti takeover.

Conti’s stock sale is intended to pay down some of its debt. Handelsblatt says German securities watchdog BaFin is expected to approve the prospectus for that sale today. Schaeffler and its two banks own nearly 90% of Conti and say they will still own more than 75% after the share offering.

Next week General Motors Co. will begin moving the production equipment for the next-generation Saab 9-5 sedan and wagon from its Opel plant in Russelsheim, Germany, to its Buick plant in China, according to multiple media reports that cite unidentified sources. GM has denied the report, calling it a “misunderstanding.”

Last month GM agreed to sell tooling for Saab’s outgoing 9-5 and current 9-3 models to Beijing Automotive Industry Holding Co. for a reported €140 million.

The American company also said it has begun to wind down Saab even as it considers a final round of bids for the company. Previous bids from Koenigsegg Group and Spyker Cars NV collapsed, and GM CEO Ed Whitacre said a week ago that no offer to date was substantial enough to consider seriously.

Demand for passenger vehicles in China zoomed to a record 10.3 million units last year from 6.4 million in 2008, says the China Daily.

Sales of buses and commercial trucks, to be reported today, are expected to add another 3.2 million units. That would push the country’s total vehicle sales to a record 13.5 million, surpassing the U.S. as the world’s largest national market for the first time. Last year Americans bought 10.4 million cars and light-duty trucks. Analysts say that comparing light vehicle sales in the U.S. to total vehicle sales in China is fair, since many Chinese buyers use commercial trucks for personal transportation.

The China Daily, citing figures from the China Association of Automobile Manufacturers, says carmakers in China introduced 221 new or revised models last year and are likely to debut another 100 models in 2010. Foreign brands, including those produced locally through joint ventures, accounted for 70% of the county’s total car sales.

China’s central government predicts vehicle sales this year will grow by a relatively modest 15% to 15.5 million. The country intends to raise its scrappage incentives by as much as threefold but also boost its sales tax by half to 7.5% on the 85% of new vehicles powered by engines that displace 1.6 liters or less.

The Toyota Prius hybrid was Japan’s best-selling passenger car last year, according to the Japan Automobile Dealers Association. It was the first time a hybrid has outsold conventionally powered vehicles for a full year in Japan.

Prius sales totaled 208,900 in Japan last year, three times the volume in 2008. Analysts attribute the surge to the redesigned model introduced by Toyota Motor Corp. in May, coupled with government incentives for purchasers of “green” vehicles.

Japan’s second- and third-best-selling vehicles last year—both of them minivehicles with engines smaller than 660 cc—were the Suzuki WagonR and Daihatsu Move.

Daimler AG says demand for its cars, which totaled 1.1 million last year, will be only slightly higher in 2010. Unit sales for its Mercedes-Benz Cars operation fell 10% from 2008 to 2009.

Daimler says its full-year Mercedes sales surged 14% to 168,000 units in Asia last year but fell 13% to 646,000 units in western Europe and 18% to 205,000 units in the U.S.

Government tax breaks pushed Brazil’s vehicle market to a record 3.14 million sales last year from 2.82 million cars, trucks and buses in 2008, says industry association ANFAVEA. Brazil is the world’s fifth-largest market after China, the U.S., Germany and Japan.

The group says car and light-duty truck sales jumped 13% to 3 million units, but demand for commercial vehicles and buses dropped 12% to 131,700 units. Fiat, which controls 24.5% of the market, sold 737,000 vehicles in Brazil last year. Volkswagen was second with a 22.7% share, followed by General Motors with 19.8%, Ford with 10.1% and Honda with 4.2%.

ANFAVEA says local vehicle production and exports fell 1% and 35%, respectively, last year. The group predicts total vehicle sales will grow by 8% in 2010.

Honda Motor Co. plans to produce 3.6 million units worldwide for the fiscal year that begins 1 April, up from 3.4 million in the previous 12-month period, says Japan’s Asahi.

The newspaper says Honda expects to make 1.3 million vehicles in North America, up by 110,000 units from its output during the current fiscal year. The company’s production in Japan is forecast to expand by 7.7% to 980,000 units during the same period.

PSA Peugeot Citroen says demand for its cars in fast-growth markets such as Brazil and China will make its Peugeot division the world’s seventh-best-selling brand by 2015, up from 10th place today.

Peugeot plans to add 14 new models by 2015, including the RCZ coupe this spring and iOn EV city car in autumn. This year the company also is introducing a small pickup truck in Brazil and its 408 sedan in China.

PSA said in December it intends to more sharply differentiate its Peugeot and Citroen brands. It is positioning Peugeot as a maker of sporty cars and Citroen as a luxury marque.

Renault SA is evaluating a plan to make its next-generation Clio compact car exclusively in Turkey, Reuters reports. The car currently is produced at Renault’s Flins plant outside Paris.

Reuters says Turkey’s Ovak Group is negotiating with Renault to make the new Clio. The French carmaker said previously that in 2012 the Flins plant will begin making as many as 100,000 battery packs per year. It also will begin assembling an electric sedan based on the Zoe Ze supermini concept it showed at last year’s Frankfurt auto show.

Car sales in the Czech Republic will rebound to pre-recession levels late this year, predicts the nation’s Car Importers’ Association. Sales of cars and light-duty trucks fell 11% to 181,000 units last year. The country’s economy, which shrank by 4% last year, is projected to grow 2% in 2010.