Week of January 24, 2000

January 24, 2000

BMW COMMITTED TO ROLLS
GM’S SALES VEEP RETIRES
CHRYSLER, MERCEDES TO SHARE ENGINES
HONDA TO SELL LARGE SUVS
GM EARNINGS FALL
STUDY REAFFIRMS TRUCK POPULARITY
HYBRIDS TO BE 20 PERCENT OF FUTURE SALES
DAEWOO’S FOREIGN, LOCAL CREDITORS COLLIDE
GAS PRICES AT 3 ½ YEAR HIGH
JEEPS, DURANGOS RECALLED
NOKIA CHIEF JOINS FORD BOARD
HYUNDAI MAY SEPARATE TRUCKS, ISSUES INCENTIVES
FORD TO CONSOLIDATE LUXURY DEALERS
ROVER NOT COMING OVER
BLUE OVAL WINS THIS ROUND
CAR BAN IN MILAN

 

BMW COMMITTED TO ROLLS Board member Dr. Wolfgang Ziebart said that it would continue to produce the VW-designed Rolls-Royces when it receives the Rolls-Royce name in 2003. In a speech to the Automotive News World Congress in Detroit, Ziebart added that even though BMW has its own design team dedicated to manufacturing its own Rolls-Royce, there was a "good chance" that it will also sell VW-manufactured Rolls-Royces. Ziebart further proclaimed that the manufacturer was committed to remaining an independent automaker.

 

GM’S SALES VEEP RETIRES Roy Roberts, vice president of GM’s North American sales, announced he will retire from his position to realize his dream of starting his own business. He will be replaced by William Lovejoy, the vice president of GM Service Parts Operations, who has been with the company for 29 years. Roberts, 61, is a 22-year GM veteran and is its highest-ranking black executive. Beginning February 1, the pair will work in tandem, both with the VP of sales title, until Roberts retires on April 1.

For more on Roberts’ retirement, click here

 

CHRYSLER, MERCEDES TO SHARE ENGINES Chrysler and Mercedes divisions will share parts, including engines, but will not share vehicle platforms, according to DaimlerChrysler U.S. president James Holden. "At some point, you may see a diesel engine developed by Mercedes-Benz show up in a Chrysler group vehicle. Or, an electric powerplant developed by a Chrysler in a Mercedes vehicle," said Holden.

 

HONDA TO SELL LARGE SUVS Honda is planning to produce and sell large SUVs in the U.S. in 2002, according to the Nihon Keizai newspaper. The Japanese financial daily reported the vehicle as the MD-X, the SUV that was introduced by Acura, Honda's luxury brand, at the Detroit Auto Show. Production reportedly will begin in 2002, with about 120,000 vehicles being made annually. The paper names Honda’s new Alabama plant as the site for production.

 

GM EARNINGS FALL Fourth-quarter earnings for General Motors dropped 34 percent, but still exceeded the expectations of Wall Street analysts. Despite the end of the year drop, 1999 profits were up 82 percent to $5.6 billion. J. Michael Losh, GM’s CFO, told TheCarConnection.com that one of the reasons for the drop was a decrease in retail prices, falling about $60 per vehicle in the fourth quarter, and that he "expects to see more of the same" declines in 2000. Losh also said that it was too soon to consider spinning off GM’s OnStar communications unit.

 

STUDY REAFFIRMS TRUCK POPULARITY The family car is no longer a car, but a truck, according to a new study released by The Polk Company. Of vehicle owners with children, minivans were the preference, with 53.6 percent owning one. Sport-utes ran a close second, with 44.7 percent owning a SUV.

 

HYBRIDS TO BE 20 PERCENT OF FUTURE SALES Hybrid vehicles, running on electricity and other fuels, will make up 20 percent of vehicle sales by 2010, predicted Ford chairman, William Clay Ford, Jr. Although hybrids make up only a small percentage of the global market, Ford said, "In the near term, hybrids will make the first substantial inroads into the market." Ford said that its new Th!nk brand will be used to introduce alterative-fueled engines and vehicles.

 

DAEWOO’S FOREIGN, LOCAL CREDITORS COLLIDE The South Korean government said that it will help local creditors who are short on cash, by purchasing Daewoo Group bonds at a big discount, potentially forcing foreign creditors into a reduced settlement. Negotiations are in the final stage and local and foreign creditors are slated to meet in Hong Kong soon to finalize an agreement. The Koreans expect the buy out to be settled at about 40 cents on the dollar.

 

GAS PRICES AT 3 ½ YEAR HIGH As crude oil prices rose to the highest since 1991, U.S. retail gas prices jumped to $1.277 a gallon in the last week. The average price of regular self-serve gasoline climbed 1.3 cents, the highest prices since June 1996. Crude oil prices for February delivery rose today to $28.85, a three-percent increase over last week.

 

JEEPS, DURANGOS RECALLED DaimlerChrysler recalled 652,000 Jeep Cherokees, Grand Cherokees, and Dodge Durangos for the 1992-1999 model years. Recalled Jeeps were sold in 15 northern states where use of road salt may cause brake rotors to corrode or crack. Some 1992-1995 Cherokees and 1994-1995 Grand Cherokees are affected; 1998-1999 Durangos were recalled due to weak fuel tank straps and rear brake tubes that could wear down after rubbing against the vehicle’s underbody. No accidents or injuries have been reported resulting from either recall.

 

NOKIA CHIEF JOINS FORD BOARD The chairman and CEO of telecommunications giant Nokia was elected to Ford's board of directors. Jorma Illila, 49, was chosen in part for his efforts which made Nokia a pioneer in wireless technology and the Internet, according to chairman Bill Ford. Like many other automakers, Ford is working on many projects involving wireless communication and the use of the Internet in automobiles.

 

HYUNDAI MAY SEPARATE TRUCKS, ISSUES INCENTIVES Hyundai announced a Valued Owner Incentive Program that offers $1000 cash back to registered owners of 2000 Sonatas. Prospective buyers can apply the incentive as a down payment on a new Sonata. Separately, Hyundai said it was contemplating dividing its large truck division from its main car operations. Chief spokesman Choi Han-young said that the discussions did not include integrating it with Kia’s commercial operations, nor did it mean that Hyundai’s truck unit would be spun off.

 

FORD TO CONSOLIDATE LUXURY DEALERS Ford is slated to work with dealers to consolidate its Lincoln, Volvo and Jaguar dealerships in an effort to improve customer handling, according to an article in Automotive News. Ideally, the three brands will reside in separate dealerships in a single location. It is expected that the top-performing dealer in a market will be offered other franchises as they become available.

 

ROVER NOT COMING OVER BMW spokesman Richard Gaul denied reports that it was talking with Volkswagen about providing the platform for the next Rover small cars. Reports by Der Spiegel magazine said that in return BMW would receive the brand rights for Rolls-Royce. Gaul indicated that the only talks BMW was having with VW were regarding VW's Bentley, which BMW provides engines and other components.

 

BLUE OVAL WINS THIS ROUND Blue Oval News (www.blueovalnews.com) the Internet site that has been publishing leaked and confidential documents on Ford's business strategies and products, seems to have won this round of the fight with the automaker. Ford indicated that it would not appeal a U.S. District Court Judge's ruling that allows publisher Robert Lane to write articles and use data pulled from confidential documents. Ford spokesman Jim Cain said that Ford has stopped the fight because Lane had stopped using the company's logos on his site, although Internet publishing experts said the company probably dropped the case in an effort to minimize publicity about the lawsuit.

 

CAR BAN IN MILAN Earlier this week, residents in Milan, Italy spent the day on bicycles, skates, their feet or public transportation as the city marked its first day-long car ban. The Italian city is the first of several to hold carless Sundays once a month to promote public transportation and reduce pollution levels. Traffic police monitored the streets to make sure that the only drivers out were those who were among the exceptions, such as doctors and diplomats.

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