SPEED KILLS, AND
MORE SPEED KILLS MORE SPEED KILLS, AND MORE SPEED KILLS
MORE— A study by the Insurance Institute of Highway Safety said
highway deaths have increased by roughly 15 percent since Congress did away with
the national 55-mph limit in 1995. Notably, deaths in states that kept the old
limit have remained constant. The institute's findings echo a similar report by
the National Highway Traffic Safety Administration last year. An earlier
institute report found that highway deaths increased about 12 percent in the
first 12 states to raise speed limits. At the same time, the National Motorists
Association, a Wisconsin-based drivers group that fought for the increase in
speed limit, said the number of deaths has not increased in proportion to
increased driving contributed by low gas prices and a strong economy. A NEW NICHE FOR GM? Long the auto
industry's productivity laggard, General Motors intends to build three new
plants in the U.S., with groundbreaking scheduled for later this year. Project
Yellowstone will rely on suppliers to provide the new plants with 15 key
"modules," parts and component clusters that can be put together with a fraction
of the normal effort. Look for savings of $1,500 or more a vehicle — or 20
percent of the cost of building a small car — according to Yellowstone's project
director, GM Vice President Mark Hogan. The new plants will be so lean and
efficient, according to Hogan, that GM will be able to build a variety of
"niche" products in volumes as low as 1,000 to 5,000 units. Such numbers would
have ensured huge losses in the past. What vehicles might GM have in mind? The
Cadillac Evoq concept car is one example of GM's niche aspirations, and the
Chevrolet Nomad concept truck may be another. Stay tuned. DAIMLERCHRYSLER KEEPS ON
TRUCKING— DaimlerChrysler AG sold nearly half a million commercial
trucks worldwide in 1998, a 17 percent increase over the previous year's volume.
Coincidentally, the newly formed company increased its revenue in that division
by the same percentage. Profit also took off: DaimlerChrysler Commercial
Vehicles posted an operating profit of $837 million for the period from January
to September 1998 compared with just $287.5 million for the entire 1997 year.
Its North America-based Freightliner division had its best year ever, selling
116,000 units, four times what it sold a decade ago. The company made the
announcement at the International Commercial Vehicles Show in Brussels and will
publish final figures in its March 31 annual report. THE ULTIMATE COMMUTE? With no
direct commercial flights between DaimlerChrysler's dual headquarters in Germany
and the U.S., the company apparently plans to rent a 60-passenger Airbus jet and
launch its own shuttle service, perhaps flying three times a week and eventually
outfitting a plane with larger fuel tanks to handle nonstop flights. The company
does have private jets, but the sheer volume of executives makes the bigger
aircraft a more attractive proposition. TOYOTA TAKES AIM AT EUROPE,
JAPAN— Targeting the domestic Japanese and European markets, Toyota
has taken the wraps off its Yaris hatchback, a small passenger car to be built
in France and Japan. The company hopes to sell 250,000 of the 1-liter
four-cylinder vehicles, 110,000 of them in Japan. The vehicle, to be badged the
Vitz in Japan, is to be priced at 830,000 yen ($7,477 at 111 yen to the $) for
the three-door model. While the car is not much bigger than Japanese minicars,
Toyota President Hiroshi Okuda said he felt the superior performance and roomier
interior of the Yaris/Vitz would make it competitive with the minis, even though
that category of vehicle enjoys preferential tax treatment. NEW ALLIANCE OF AUTOMAKERS— A new
trade group, the Alliance of Automobile Manufacturers, with nine member
companies, will replace the old American Automobile Manufacturers Association.
The AAMA, which consisted only of the Big Three, broke apart when Chrysler Corp.
merged with Daimler-Benz. The new AAM will lobby for the entire industry, rather
than just the traditional domestic automakers. AAM will focus on environmental
and safety issues, avoiding the more contentious issues such as trade. Ford Vice
Chairman Peter Pestillo is to be chair of the association, which counts Ford,
GM, DaimlerChrysler, Volkswagen, Toyota and Nissan among members with full
voting rights. Volvo, BMW, and Mazda will be associate members. Honda was
invited to join the new group but declined, preferring to retain its membership
in the Association for International Automobile Manufacturers, a spokesperson
said. SATURN SKIDS— For the first time
since 1993, Saturn Corp., a division of GM, has lost money, an estimated $25
million, according to a United Auto Workers leader. The company refused to
confirm the actual number, but GM Vice President Mark Hogan has acknowledged the
company is losing money. "A lot of it has to do with volume," Hogan said. Saturn
sold 231,786 cars in 1998, down from 251,099 in 1997. But industry analyst
George Peterson, of AutoPacific Inc. in Santa Ana, California, said the
resilience of the company is to be commended. "Saturn has been able to hold its
own in a tough year," he said. The company is expected to produce a
sport-utility vehicle in 2001, a move UAW leader Mike Bennett said is long
overdue. "If we had been able to have the SUV two or three years ago, instead of
GM saying 'No', we'd have been in much better shape. But we'll work it
out." CRUIZIN' Once again showing that
it can squeeze the time from concept car to production vehicle, DaimlerChrysler
announced it will produce the PT Cruizer, a vehicle the company sees as a
"segment buster," creating its own category. The front-wheel-drive vehicle,
shorter than a Neon, looks like a cross between a milk truck, sleek 1950s
cruiser and station wagon. DaimlerChrysler Co-Chairman Robert Eaton said the
vehicle, to be priced significantly under $20,000, will "really capture the
emotions of a wide demographics in every country." Both left- and
right-hand-drive versions of the PT Cruizer will be made at the company's
Toluca, Mexico, plant, with sales beginning in 2000. Volumes were not
discussed. ARE THEY CARS? OR TRUCKS? YES At
last year's North American International Auto Show, GM's Signia proved a hit. So
the company has repeated itself — three times over. Three of the five concept
cars GM presented at the same show this year are so-called "crossover" vehicles,
looking something like a truck and something like a car. GM Chairman Jack Smith
hinted that more of these design hybrids would be finding their way into
showrooms before long. "We have made very significant improvements in reducing
time and cost in the process of bringing vehicles from idea stage to the
market," Smith said. "On average, we will introduce one new product every month
between now and the middle of the decade in the U.S. market alone. More than
half of those will be innovative concepts aimed at redefining existing product
segments and creating new segments." YOU'VE GOT MAIL— General Motors
has invested heavily in computer styling and engineering technology, and it's
paying off with lower design and production costs. Now, the world's largest
automaker hopes to make money by loading its cars up with the latest in
electronic gear. In an exclusive interview with The Car Connection, GM Chairman
Jack Smith said his company plans to offer a range of in-car services, including
e-mail, digital radio and movies, and real-time traffic alerts. Industry experts
believe GM is well-positioned to become a leader in the new field, dubbed
"Telematics," and may start giving away in-car hardware, such as navigation
computers, to spur the growth. Even if it doesn't, hardware prices are expected
to fall, much as has happened with the PC computer market. The real dollars,
said Smith, will be earned through monthly subscription fees. Thanks to its
Hughes Electronics subsidiary, GM already is one of the largest players in the
satellite-to-home TV business. A NISSAN/DAIMLERCHRYSLER MERGER?
DaimlerChrysler Co-Chairman Juergen Schrempp has come closer than ever to
acknowledging the possibility of buying a piece of ailing Nissan Motor Co.
Schrempp told reporters in Detroit last week that he "would not exclude" a stake
in Asia's second-largest car company. After being rebuffed by Ford Motor Co.'s
reported refusal to take a 20 percent interest in the company, Nissan made the
same offer to DaimlerChrysler, which had been considering the purchase of
Nissan's diesel truck subsidiary. Nissan President Yoshikazu Hanawa told Japan's
Kyodo News agency the company would seriously consider a DaimlerChrysler
proposal. FORD INTERESTED IN ACQUISITION, BUT WHO'S
SELLING? With $23 billion in cash on hand, Ford Motor is looking for
bargains. Maybe that's the trouble. The attractive ones don't want to sell, and
the willing sellers aren't what the automaker is looking for. With Volvo being
most often mentioned as a Ford takeover target, analysts are saying Ford is more
interested in BMW or Honda. Ford and Volvo have acknowledged the companies have
talked about a marriage but left it at that. Ford is in no hurry to spend its
cash, said Ford President and CEO Jac Nasser last week. Indeed, the company
walked away from buying South Korean automaker Kia Motors in December, when the
purchase price and Kia's debt failed to add up to a viable business case. FORD FOCUSED— Ford's replacement
for the Escort is getting high marks in Europe, including the inaugural Scottish
Car of the Year award, the European CoTY title and the BBC Top Gear. While the
bold styling may not be for everyone (one critic called it the Ford Fiasco), it
can't be accused of being another look-alike Eurohatch. It's also not a
skin-deep makeover for the Escort. There are virtually no shared components
between the two. BIG QUESTIONS ABOUT
SMALL BMW— BMW chief executive Bernd Pischetsrieder has
apparently told his senior managers of his intention to develop two small cars
to compete with the Volkswagen Golf and Polo models. Not everyone is happy with
the scheme, which would be handled in association with the company's Rover
division in the U.K. and built at Longbridge. Pischetsrieder expects Rover to
sell at least half a million of the new cars each year. Internal critics say the
boss's expression of confidence in Rover may be the company's undoing. An
internal BMW report reportedly recommended the British subsidiary cease
production on all models except the Mini and the Land Rover. But BMW board
members fear that rejecting the chief executive's ideas will see him go
elsewhere.
A NEW NICHE
FOR GM?
DAIMLERCHRYSLER KEEPS ON
TRUCKING
THE ULTIMATE
COMMUTE?
TOYOTA TAKES
AIM
NEW ALLIANCE OF
AUTOMAKERS
SATURN
SKIDS
CRUIZIN'
ARE THEY CARS? OR TRUCKS? YES
YOU'VE GOT MAIL
A NISSAN/DAIMLERCHRYSLER MERGER?
FORD INTERESTED IN ACQUISITION
FORD FOCUSED
BIG
QUESTIONS ABOUT SMALL BMW
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January 18, 1999
2020
The Car Connection
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