Week of April 3, 2000

April 3, 2000

 

DC, MITSU MARRIAGE TO INVOLVE CARS, NOT TRUCKS
GM SETS SUBARU PLANS
GAP NARROWS BETWEEN RENAULT, SAMSUNG
U.K. TRIES TO STOP ROVER DEPARTURE
NEW Z WILL HAVE SIX-CYLINDER
SIDE AIRBAGS DON’T EQUAL TOP CRASH SCORE
VW ACQUIRES STAKE IN HEAVY TRUCK INDUSTRY
MAZDA RECALLS MPV MINIVANS
OPEC UPS OIL OUTPUT
NEW PROGRAM FOR HIGH MILEAGE TRUCKS CRITICIZED
BUMPERS FOLD IN CRASH TESTS
SAAB EXEC GETS GREENLIGHT

 

DC, MITSU MARRIAGE TO INVOLVE CARS, NOT TRUCKS As expected, DaimlerChrysler paid $2.1 billion for a 34 percent stake in Mitsubishi. According to DC chief Juergen Schrempp, the company will use Mitsubishi’s plant and experience in the small car industry to broaden its spectrum of small cars. The deal, which gives DC a controlling interest, makes it the world’s third largest carmaker. Saying that the deal will allow Mitsu to remain "essentially independent," president Katsuhiko Kawasoe said that the CEO and COO positions will remain in its control. Another senior exec at Mitsu said the CFO position would stay with the Japanese as well. After stating previously that DaimlerChrysler would consider partnering with another manufacturer to produce trucks for the Asian market, DC chief Juergen Schrempp recanted and stated that the company would enter the new market with its own products.

Schrempp told the Wall Street Journal that the company was done with making major acquisitions, saying that the Mitsu deal gives them access to the Asian market as well as provides the expertise they need to boost its small-car program in Europe. The chairman did admit that it was talking to Hyundai about a smaller alliance, but said that a deal with Nissan’s heavy-truck division was no longer of interest.

 

GM SETS SUBARU PLANS General Motors has announced that it will purchase shares of Fuji Heavy Industries, the manufacturer of the Subaru brand, as part of a plan to get a 20-percent stake in Subaru, according to the Wall Street Journal. To facilitate the plan, GM will purchase 25.4 million shares owned by Nissan as well as 131.9 million newly issued shares next month. Separately, a spokesperson for GM’s Opel subsidiary said that GM may still try to acquire Land Rover by outbidding Ford, whose offer was accepted by BMW last week.

 

GAP NARROWS BETWEEN RENAULT, SAMSUNG After another round of talks stalled, Renault upped its bid for Samsung Motor by $100 million. The new proposed price brings the two companies the closest yet in negotiations with an offer of $550 million and an asking price of $627.5 million. If Renault succeeds in its purchase of Samsung, it will be the first foreign automaker to gain a presence in the Korean market. If the two companies don’t reach an agreement, Samsung’s creditors said they would sell the company in an international auction.

 

U.K. TRIES TO STOP ROVER DEPARTURE After BMW announced that the deal to sell its Rover unit to Alchemy Partners would be complete in six to eight weeks, officials from the U.K. trade union said it still intended to convince BMW to consider other offers. U.K. officials are trying to clear a path for entrepreneur businessman John Hemming who has said he has five backers who are willing to join him in a bid for Rover. Separately, BMW said it invested $4.4 billion total in the Rover unit since its purchase.

 

NEW Z WILL HAVE SIX-CYLINDER Nissan’s new Z car, slated to debut in the middle of 2002, will feature a six-cylinder engine and be priced at under $30,000, according to Diane Allen, Z project leader, and Jerry Hirshberg, president of Nissan’s California design studio. The pair told Automotive News that the next Z will not feature the retro styling of the ‘70s version of the car, nor will it look like a made-over 240Z or 300ZX. Allen described the new Z as "trim and athletic, but aggressive and beautiful."

 

SIDE AIRBAGS DON’T EQUAL TOP CRASH SCORE Testing by the National Highway Traffic Safety Administration (NHTSA) revealed that the presence of a side-impact airbag does not necessarily mean the vehicle will get the government’s top rating in side-impact crash tests. A report in Automotive News said that NHTSA side-impact tested eight vehicles in the latest round of testing and only two received the five-star rating. Neither the Honda Odyssey nor the Mercury Villager had side airbags, yet both received five stars. The vehicles with side-airbags, the Ford Taurus, Volkswagen Jetta, Toyota Avalon and Buick LeSabre, all received four stars.

 

VW ACQUIRES STAKE IN HEAVY TRUCK INDUSTRY Volkswagen has purchased a 34 percent stake in truckmaker Scania AB for $1.6 billion. The move allows VW to reach its goal of becoming a player in the heavy truck business. The deal became possible when the European Union refused to approve a proposed merger between Volvo AB and Scania AB.

 

MAZDA RECALLS MPV MINIVANS Mazda will recall 2000 model year MPV minivans due to a programming problem with the powertrain control module. The company is also requesting all 2000 model year MPV owners to bring their vehicles in to reinforce the bumpers. MPVs built between March 31, 1999 and November 28, 1999 need to have the module reprogrammed because it violates federal onboard diagnostic requirements. The front bumpers are being replaced due to an independent agency's finding that they don't meet low-speed crash expectations.

 

OPEC UPS OIL OUTPUT The Organization of Petroleum Exporting Countries (OPEC) has agreed to boost output by 1.45 million barrels restoring the production levels of about a year ago. Despite the agreement, analysts said that there won’t be a tremendous drop in oil prices. President Clinton urged the oil companies to drop prices at the pump "as quickly as possible," to help provide some relief to the transportation industry and American drivers. Separately, the American Trucking Association stated that the increase was not large enough to provide the relief they needed, and requested that President Clinton release the oil in the nation’s reserve.

 

NEW PROGRAM FOR HIGH MILEAGE TRUCKS CRITICIZED Vice President Al Gore announced a new program that encourages automakers to build light trucks that get up to 50 miles per gallon. The initiative, an expansion of the Partnership for a New Generation of Vehicles (PNGV) a program designed to create super fuel-efficient family sedans, was described as a "step backward" by the American Council for an Energy-Efficient Economy (ACEEE). "Promises to begin putting some advanced vehicles on the road in three to four years will do little to reverse the growth in oil dependence and global pollution from under-regulated light trucks throughout the market," said John DeCicco, ACEEE transportation program director in a statement.

 

 

BUMPERS FOLD IN CRASH TESTS The Insurance Institute for Highway Safety’s (IIHS) recent 5 mph bumper test of a selection of sedans showed the Volvo S80, Cadillac Catera and Mazda MPV with the most damage. Of the vehicles tested, the 2000 S80 ranked the worst, with over $8,000 in damage because the air bags deployed during the front-bumper crash. Company officials said they were reviewing the S80’s test results and also indicated that it had no reports of air bag deployment at slow speeds in real world crashes. The 2000 Saturn LS fared the best of the vehicles tested with just $823 in damage.

 

 

SAAB EXEC GETS GREENLIGHT Former Saab Cars USA CEO Joel Manby has been named president of Greenlight.com (www.greenlight.com), an online new car buying site. The move makes him one of the highest ranking automotive executives to go to an Internet-based company. Manby was with Saab for four years and prior to that was with Saturn since 1985.

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