Japan’s Ministry of Economy, Trade and Industry says it will amend its “cash-for-clunkers” program to make more U.S. brand vehicles eligible, reversing an initial stance that prompted an outcry from American automakers and politicians.

U.S. lawmakers called the original incentive unfair and protested to the Japanese government, scheduled hearings and threatened international trade lawsuits. They note that during the U.S. government’s $3 billion “cash-for-clunkers” program last summer, Japanese automakers sold 319,300 vehicles—nearly half of all vehicles sold under the scheme.

Japan’s program gives a 250,000 yen ($2,740) tax credit to buyers who trade vehicles that are at least 13 years old for models that meet the country’s 2010 emissions standards. Buyers without trade-ins get a 100,000 yen ($1,100) credit if their new vehicle beats emissions standards by at least 15%.

Tokyo had planned to exclude the roughly 25% of vehicles from Chrysler, Ford and General Motors that are imported under an expedited process that doesn’t require certification of compliance with Japan’s fuel economy standards. Japan now says it will accept the U.S. Environmental Protection Agency fuel economy ratings for those vehicles and use those as the basis for estimating emissions levels.

The auto trade victory is more symbolic than substantive, because American automakers sell only a tiny number of vehicles in Japan—8,700 last year. Tokyo says its new ruling will make about 700 additional vehicles eligible for the clunkers program.

Visteon Corp. says it is considering a proposal from its unsecured creditors that would allow them to recoup some of their claims in the company’s bankruptcy reorganization.

Under Visteon’s existing reorganization plan, secured lenders would get a 96% equity stake in the post-bankruptcy company. The Pension Benefit Guarantee Corp. would get a 4% equity stake to cover some liabilities of the Visteon pension plan it would assume. Bondholders and other unsecured creditors would get nothing.

Bloomberg News, citing an unidentified source, says the alternative plan would repay secured lenders in full, possibly using a combination of cash and new stock. Unsecured creditors would be paid with an equity stake or rights to buy stock. The unsecured creditors agreed last week to delay their requests to investigate the company’s finances while the parties discuss alternatives to the existing reorganization plan.

If Visteon agrees, the company would amend the reorganization plan and could avoid a court showdown with creditors. It would still face opposition from retirees who object to the company’s plan to transfer its pension plan to the PBGC.

A federal bankruptcy hearing to move the reorganization plan forward has been postponed from Jan. 28 to Feb. 18 to allow Visteon time to study the alternative proposal.

General Motors Co., which is eager to find a viable buyer for Saab Automobile or completely liquidate the unit, says talks with potential buyers could continue until mid-February, Reuters reports.

The company tells the news service that financing for a Saab sale must still be arranged. The two most visible prospective buyers—Dutch performance car maker Spyker Cars NV and a consortium led by Luxembourg-based Genii Capital—say they remain optimistic about reaching a deal.

Confidence among homebuilders in the U.S. fell this month to the lowest level since June as interest from potential buyers slid to a 10-month low, dampening hopes that a gradual housing recovery is under way, according the National Assn. of Home Builders.

The Washington, D.C.-based trade group’s index of builder confidence dropped from 16 in December to 15, indicating that only 15% of builders think this is a good market for new single-family homes. A reading above 50 is considered positive, a level that hasn’t been achieved since April 2006.

NAHB says home buyers are waiting for significant signs of improvement in employment. Increasing foreclosures and distressed sales are adding to the inventory of existing homes, which compete with new homes for buyers. Lenders are expected to repossess a record 3 million U.S. homes this year, up from 2.8 million in 2009, according to the latest forecast from RealtyTrac Inc.

Chrysler Group LLC says it has appointed Robert Libertore, its former group vice president for external public policy, as a special interim adviser to CEO Sergio Marchionne on external affairs.

Chrysler says Libertore will serve until the company finds a permanent replacement for John Bozzella, the senior vice president for external affairs who stepped down last month. He joined hedge fund Cerberus Capital Management LP, Chrysler’s former owner.

Libertore joined Chrysler in 1985 after 10 years as a staffer in the U.S. Senate. He left in 2007 to join Daimler AG when the German company sold Chrysler. He retired as Daimler’s head of global external affairs and public policy in 2008 and joined the German Marshall Fund as a senior transatlantic fellow.

Hybrid Kinetic Motors Corp., a Chinese-American auto startup, has hired Italdesign Giugiaro to design and engineer vehicles for production at a future assembly plant in Bay Minette, Ala. Italdesign says the contract is worth $500 million.

Pasadena, Calif.-based HK Motors expects to open the Alabama factory—first announced in September—in 2013 with capacity to make 300,000 units.

The stunningly optimistic company aims to introduce eight models, including sedans, crossover vehicles, minivans, SUVs and light commercial vehicles. HK Motors says it plans to power the lineup with a variety of hybrid systems that combine a battery with gasoline, ethanol or compressed natural gas. It also claims it will invest $20 billion to produce 6 million vehicles per year by 2018, half in the U.S. and half in China.

The would-be automaker is focusing for the moment on lining up $1.5 billion for the first phase of its plans. It hopes to lure Chinese investors under a U.S. visa program that allows foreign nationals who invest $1 million—or $500,000 in areas with high unemployment rates such as Bay Minette—to qualify for a permanent resident green card.

HK Motors’ chairman is Yung “Benjamin” Yeung, former chairman of Brilliance China Automotive Holdings Co., where he previously worked with Italdesign. Yeung, formerly known as Yang Rong, was ousted from Brilliance in a dispute with the Chinese government and fled to the U.S. in 2002 after he was accused of economic crimes.

Ford Motor Co. plans to produce a chassis-cab version of the next-generation Transit van at its plant in Southampton, U.K., to maintain production volumes and avert a possible plant closing, says Bloomberg News, quoting Joe Greenwell, chairman of Ford’s U.K. unit.

The Southampton plant, which makes the current-model Transit van, laid off half its workforce of 1,000 last year as demand for commercial vehicles plummeted. Some Transit production was transferred to a lower-cost Ford plant in Turkey. The chassis-cab Transit is used for conversion to ambulances, motorhomes and other specialty vehicles.

PSA Peugeot Citroen says it has eliminated 5,700 jobs in France through a buyout program that had targeted 3,500 departures. The offer will expire on March 31. PSA’s job cuts are part of a plan to cut €3.3 billion ($4.7 billion) of costs by 2012.

Zhejiang Geely Holding Group Co. says it will invest 2 billion yuan ($293 million) to hike production at its Lanzhou assembly plant in western China from 50,000 now to 120,000 vehicles per year by 2012. The factory reportedly built 18,000 vehicles last year.

In addition to making vehicles for the local market, the plant will be Geely’s production base for exports to Ukraine and central Asian countries, the company says. Geely’s Ningbo plant near Shanghai will produce vehicles for China and Southeast Asia.

Geely says it aims to produce and sell 2 million vehicles by 2015, half in China and half abroad. The China Daily says the company sold 344,400 vehicles worldwide last year. By 2015 Geely plans to have 15 overseas plants. It currently has factories in Indonesia, Russia and Ukraine and expects to begin production in Malaysia soon.

Some of Geely’s expansion plans include the Volvo brand. Ford Motor Co. chose Geely as the preferred bidder for its Volvo Cars unit in October and has said it hopes to complete a final agreement this quarter. Geely still needs to arrange financing and obtain Chinese government approval for the acquisition. Ford has said it expects the deal to be completed in the second quarter of this year.