Week of March 13, 2000

March 12, 2000

 

DC, MITSU SAY "NO COMMENT" TO MARRIAGE TALK
UP, UP, UP—GAS PRICES WILL RISE WITH SUMMER TEMPERATURES
PT CRUISER A CAR AND TRUCK
FORD EXTENDS WARRANTY, OFFERS BUY BACK ON OVER 700,000 CARS
SUPPLIERS WORRIED ABOUT BIG THREE’S ONLINE PARTS NETWORK
EU AGREES ON PLAN TO MONITOR CAR POLLUTION
"CHEAP, CHEAP" SAYS SAMSUNG OF RENAULT BID
NEW HYUNDAI FOR U.S. MARKET GETS NAME, FALL SALE DATE
SHELL TESTS ROBOTIC PUMP NEAR INDIANAPOLIS
EU REPORT SHOWS IT DOUBTS BMW’S EFFORTS
GM, FORD UP INCENTIVES
CUMMINS ENGINE STAYS, SAYS DODGE
MAZDA UPS ANTE, LOWERS PRICE ON MIATA
OVER-THE-COUNTER ALLERGY PILL CAN CAUSE "DRUNK" DRIVING

 

DC, MITSU SAY "NO COMMENT" TO MARRIAGE TALK After Japan’s Nihon Keizai reported that DaimlerChrysler were in the final stages of securing a stake in Mitsubishi, both automakers declined to comment on a possible joining of the two companies. A Mitsubishi spokesperson who declined comment said, "We are talking with various other companies but we can’t go into specifics." Speculation has recently centered around Ford talking with the Japanese automaker about a possible joint venture with Volvo Cars, one of Ford’s subsidiaries.

 

UP, UP, UP—GAS PRICES WILL RISE WITH SUMMER TEMPERATURES The U.S. Department of Energy said that gasoline prices could go as high as $1.80 per gallon this summer, even if OPEC ups the oil production by one million barrels a day. Private analysts have indicated that prices could go as high as $2.50 a gallon if OPEC does not increase production. In an effort to ease some of the strain motorists are feeling at the pump, some Republican senators have proposed that the tax of 4.3 cents per gallon of gasoline be dropped temporarily, but the idea received lukewarm reception among lawmakers.

 

PT CRUISER A CAR AND TRUCK The Chrysler PT Cruiser, due in showrooms at the end of the month, has been classified as a car by the Environmental Protection Agency (EPA), yet DaimlerChrysler expects federal safety regulators to view the vehicle as a truck. It is the federal safety regulators at the National Highway Traffic Safety Administration that oversee the fuel economy standards. If the vehicle remains classified as a truck by NHTSA, then it will help offset the other gas guzzling trucks in its fleet. The Corporate Average Fuel Economy (CAFE) standards dictate that each manufacturer's light trucks (pickups, SUVs and minivans) must get an average of 20.7 miles per gallon.

 

FORD EXTENDS WARRANTY, OFFERS BUY BACK ON OVER 700,000 CARS Ford will extend the warranties and offer to buy back some of the 717,680 cars and minivans that have a faulty head gasket that can destroy the engine block if it fails. The company will repurchase some of the defective cars for up to $8,375 each and offer a discount of up to $4,000 on a new vehicle for other owners of defective vehicles. The vehicles affected are 1994-1995 Ford Taurus’ and Mercury Sables, 1995 Ford Windstars and 1994 Lincoln Continentals that were equipped with a 3.8-liter V-6 engine.

 

SUPPLIERS WORRIED ABOUT BIG THREE’S ONLINE PARTS NETWORK Automotive suppliers expressed fears about the new online parts supply network recently formed by Ford, General Motors and DaimlerChrysler. Both a lack of say about the network’s operation and being squeezed on prices were concerns at the forefront of suppliers’ minds. The Big Three are planning to organize the new company’s structure, including an initial public offering and make a decision if suppliers can buy an equity stake, within the next three months. Separately, Toyota has said it is studying the network, but has not yet decided if it would join.

 

EU AGREES ON PLAN TO MONITOR CAR POLLUTION The European Union agreed to a scheme that monitors carbon dioxide (CO2) emissions from car manufacturers. The system will be used to check the manufacturer’s voluntary commitments to reduce CO2 emissions and replace them with mandatory rules if necessary. The Union is hoping to reduce the average amount of CO2 emissions in new cars by 35 percent by 2010 at the latest, and preferably by 2005.

 

"CHEAP, CHEAP" SAYS SAMSUNG OF RENAULT BID Samsung’s primary creditor said Renault’s bid was "unreasonably low," but analysts say a deal seems to be in the works. An HSBC Securities analyst told Reuter that the gap between the $450 million Renault offered and the $1 billion "fair" price would soon be narrowed because a merger between the two companies would benefit both. Renault may need to take on some of Samsung’s debt to make the deal worthwhile to creditors.

 

NEW HYUNDAI FOR U.S. MARKET GETS NAME, FALL SALE DATE The four-door sedan Hyundai sells as the XGrandeur in Korea will be available in the U.S. in September. The sedan, which is larger than Hyundai’s Sonata model, will be called the XG300 in the U.S. market. Features on the XG300, introduced at the Detroit Auto Show, will include a 3.0-liter V-6 engine with an adaptive, five-speed auto-manual transmission.

 

SHELL TESTS ROBOTIC PUMP NEAR INDIANAPOLIS The Shell SmartPump, a robotic fuel pump, is now being test-marketed in the Indianapolis suburb of Westfield. The pump, which uses a combination of cameras, sensors and a robotic refueling arm, allows drivers to remain in their vehicles and let the machine refuel their tank. Shell said 1,000 customers have signed up to use the SmartPump, which costs an extra $1 per fill up to use.

 

EU REPORT SHOWS IT DOUBTS BMW’S EFFORTS The European Commission released a report that clearly shows it doubts if BMW seriously considered building the Rover R30 model in Hungary before it applied for state aid to develop the Longbridge plant in the U.K. The Commission questioned if the government was justified in its 152 million pound subsidy to BMW for the Longbridge facility. Industry rivals and others have one month to comment on the report before a decision about the subsidy is made.

 

GM, FORD UP INCENTIVES Both General Motors and Ford upped its incentives in order to keep the momentum from strong February sales moving. GM’s discounts included $2000 on the four-door Chevy Blazer and GMC Jimmy and $1,000 on the Pontiac Grand Prix and the Buick Regal. Ford added a $500 cash-back incentive on its Taurus and upped the incentives on the Crown Victoria and the Econoline van to $1,5000 and $1,000 respectively.

 

 

CUMMINS ENGINE STAYS, SAYS DODGE After an official statement that the Cummins diesel engine used in the Dodge Ram pickup might be replaced with a Mercedes-Benz engine, a Dodge spokesperson said later that Cummins will remain as the engine supplier. The Mercedes engine would only be used if DaimlerChrysler were to build a medium-duty pickup, according to Dodge spokesperson David Elshoff. Automotive News reported this week that three DaimlerChrysler sources, including chairman Juergen Schrempp, said that the Ram’s engine would be replaced with a Mercedes model for the 2003 model year.

 

 

MAZDA UPS ANTE, LOWERS PRICE ON MIATA Hoping to gain more market share, Mazda has added standard features and dropped the price on its 2000 model year Miata. Standard features on the Miata now include air conditioning, fog lights, WindblockerT and floor mats at an MSRP of $20,545, a $700 price reduction. The Miata LS adds air conditioning, fog lights and an appearance package as standard equipment for an MSRP of $23,545, a drop of $450.

 

 

OVER-THE-COUNTER ALLERGY PILL CAN CAUSE "DRUNK" DRIVING The drug found in Benadryl and other over-the-counter allergy medications can cause drivers to be impaired as if they were drunk. A study in the Annals of Internal Medicine found that drivers who took the drug diphenhydramine performed as poor as those who were drunk. Most surprising to researchers was that even drivers who did not feel drowsy and believed their driving was unaffected also performed as low as the drunk drivers.

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