Week of July 24, 2000

July 24, 2000

REPORT SAYS SOME SUVS HIGHLY LIKELY TO ROLL OVER
FORD AND SHELBY GO AFTER REPLICAS
SAAB ROADSTER GETS GO-AHEAD
GM BUYS HONDA ENGINES FOR SATURN
BELVIDERE MAY MAKE CRUISER
NAVIGATION SYSTEMS DISTRACTING
GM EARNINGS UP
DC GOES AHEAD WITH NEXT-GENERATION A-CLASS
FORD POSTS LOSS DESPITE HIGHER REVENUES
DC BUYS DETROIT DIESEL
NISSAN EXPANDS TENNESSEE PLANTS

 

REPORT SAYS SOME SUVS HIGHLY LIKELY TO ROLL OVER A scalding report in USA Today last Monday provided mathematical analysis of U.S.-market sport-utility vehicles, and alleges that some of the SUVs are dangerous due to inherent instabilities. USA Today used the analysis of management consultant Joe Kimmel, called the K Index, to calculate rollover risk for 189 year-2000 vehicles. The Center for Auto Safety has called the system better than what the National Highway Traffic Safety Administration has proposed to calculate rollover risk. Kimmel's analysis, which takes into account the vehicles dimensions and weight, found the Chevrolet Tracker, Suzuki Vitara, and Toyota RAV4 to be most likely to roll, with an expected rollover in four out of every ten accidents. Rollover crashes kill one out of every four people who die in auto accidents.

 

FORD AND SHELBY GO AFTER REPLICAS Ford Motor Company and Shelby American have launched a lawsuit against Massachusetts-based Factory Five Racing. The lawsuit alleges trademark infringement, dilution, and unfair competition, stemming from Factory Five's unlicensed sales of more than 1000 Shelby 427 S/C replicas. Shelby accuses the company of presenting the models as originals, without enough variation from the original model to be considered different. This lawsuit, according to Shelby American, is the first of several aimed at knock-off manufacturers.

 

SAAB ROADSTER GETS GO-AHEAD General Motors has approved a new Saab roadster, says Ward's Auto Reports. The car will probably share its platform, based on the upcoming Epsilon platform, with the next-generation 9-3. Saab's new design head, Michael Mauer, will be responsible for the car's look.

 

GM BUYS HONDA ENGINES FOR SATURN General Motors has signed a powertrain-purchasing agreement with Honda Motor Company. Under the agreement, starting in 2003 Honda will supply GM with 90,000 low-emissions V-6 engines with automatic transmissions per year. Under a previous agreement, in return Honda will purchase diesel engines from Isuzu, a GM affiliate. Honda will reportedly supply the engines to GM for a five-year period. GM plans to use the Honda engines in an upcoming Saturn model.

 

BELVIDERE MAY MAKE CRUISER Ward's Auto World reports that DaimlerChrysler is considering its Belvidere, Illinois, Assembly Plant for additional PT Cruiser production, so that the company can better satisfy demand for the car. The plant currently assembles the Neon, which shares the same basic platform as the PT Cruiser. DC currently assembles all PT Cruisers at its plant in Toluca, Mexico, although next summer its Graz, Austria, plant will start to produce an additional 50,000 units per year.

 

NAVIGATION SYSTEMS DISTRACTING The National Highway Traffic Safety Administration (NHTSA) has spoken out against the use of in-car navigation devices in moving vehicles because the systems are too distracting. The federal agency says that systems with visual displays and keypads are especially dangerous. A study by the agency showed that nearly 90 percent of drivers swerved out of their lane while using keypad-operated navigation systems, as compared to 20 percent while tuning a radio and seven percent while using a cell phone. The NHTSA has recently released figures that attribute about a quarter of all crashes in the U.S. to driver distraction, and the group warns about the distraction hazards of a growing number of in-car, high-technology gadgets.

 

GM EARNINGS UP General Motors posted higher-than-expected earnings for the second quarter. The company earned $1.75 billion, a one-percent increase over the same period a year ago. Earnings from GM's North American auto business fell five percent, to $1.41 billion. Also, yesterday, the automaker tried to stimulate sales and a sliding market share by announcing increased rebates on selected 2000-model-year Pontiac, Oldsmobile, Buick, and Chevrolet models. Later in the week, General Motors also announced $500 incentives and reduced loan rates on selected full-size pickups as inventories piled up.

 

DC GOES AHEAD WITH NEXT-GENERATION A-CLASS Automotive News Europe reports that DaimlerChrysler has recently decided to cancel plans for a small U.S.-developed, Chrysler-brand car for Europe, although the automaker will develop a next-generation Mercedes-Benz A-class. The A-class has shown poor profitability since its introduction, and last month reports surfaced that DC may discontinue the next generation of the car, to be introduced in 2004. In Europe, the automaker intends to round out the small-car lineup with cars from the Smart and Mitsubishi brands, rather than the Chrysler brand.

 

FORD POSTS LOSS DESPITE HIGHER REVENUES Although Ford Motor Company posted revenues up in the second quarter, the automaker reported a loss of $577 million for the period. Company revenues were up to $44.5 billion, versus $41.9 billion in the second quarter of 1999. Restructuring of automotive operations in Europe and the spinoff of Visteon Corporation are partially to blame for the losses.

 

DC BUYS DETROIT DIESEL DaimlerChrysler will purchase all of Detroit Diesel Corporation. DC will pay $23 per share for Penske Corporation's 48.6-percent share of the company and the remaining shares. DC currently owns 21.3 percent of Detroit Diesel. The transaction should be complete by fall.

 

 

NISSAN EXPANDS TENNESSEE PLANTS Nissan plans to expand production capacity at its two plants in Tennessee. According to Automotive News, production at the Smyrna, Tennessee, assembly plant will be increased from 380,000 to 500,000 after 2001, while production at the Decherd, Tennessee, powertrain plant will be expanded to include V-6 and V-8 engine facilities. By 2004, after the changes, Nissan expects to employ as many as 2000 additional employees at the facilities.

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