Week of October 25, 1999

October 25, 1999


MITSU’S ON THE MARKET
NISSAN MAY DITCH SUBARU STAKE
RENAULT MAY BOOST NISSAN HOLDINGS
DC NOT TALKING TO ANYONE
EATON’S RETIREMENT SEEN SOON
GM SLASHES DEVELOPMENT TIME
GM GETS USED-CAR STORE, FINALLY
ISUZU GIVES LONGEST WARRANTY
PIRELLI DENIES CONTI MERGER
FORD, MAZDA PLAN ON 250K UTES
PAILLART DITCHES FORD CREDIT
NISSAN UPS INVESTMENT IN ENGLAND
DAEWOO HAS WORLD’S MOST EFFICIENT PLANT

 

MITSU’S ON THE MARKET The word from the top at Mitsubishi is "share and share alike." At the Tokyo show, Mitsubishi Motors Corp. President Katsuhiko Kawasoe made it clear that his company is looking for a partner to share costs of developing future passenger cars. Kawasoe told the Wall Street Journal that he's "traveled worldwide chatting with business people showing the technology we have to sell." Mitsubishi’s search is being given extra impetus, since Ford CEO Jac Nasser and Volvo officials have indicated that future Volvos will share platforms with Ford vehicles — which leaves Mitsu’s joint venture with Volvo in the Netherlands up the dike without a paddle.

For our Tokyo Motor Show extravaganza, click here

 

 

NISSAN MAY DITCH SUBARU STAKE While Mitsu is partnering, Nissan is looking to divest itself of nonprofitable ventures. One of those may be its 4-percent stake in Fuji Heavy, the company that builds Subaru passenger cars. Renault Chairman Louis Schweitzer, apparently now running the show in Tokyo, says that Nissan will hold onto four core subsidies as a part of its restructuring — and that its Fuji stake was not among the four. "It's part of the 1,300 plus other holdings that merit study from a strategic standpoint," he told reporters. Renault bought a 36.8-percent stake in Nissan in May for $5.4 billion.

For more on Nissan’s restructuring, click here

 

For our Tokyo Motor Show extravaganza, click here

 

 

RENAULT MAY BOOST NISSAN HOLDINGS Meanwhile, on the Parisian side of town, Renault’s Schweitzer reminded audiences that Renault has an option to extend its holdings from 36.8 percent to 44.4 percent — an option it’s likely to exercise in about four years, when the option comes due. Schweitzer also indicated that as Nissan and Renault merge platforms, some Renault products will make their way into the United States badged as Nissan vehicles. Schweitzer also stressed that the relationship between the companies was an alliance, not a merger: "We do not want to try to merge the French culture and the Japanese culture,'' he observed sagely.

 

 

 

DC NOT TALKING TO ANYONE At DaimlerChrysler, where they’re still trying to digest each other and become a global powerhouse, rumors of impending mergers are being scoffed at. DC now says it is not in serious talks to acquire anybody, despite rumors linking it to Fiat and Peugeot-Citroen. "The fact is, we're having no serious talks at the moment with anybody," said DC passenger-car guru Juergen Hubbert. PSA Peugeot-Citroen Chairman Jean-Martin Folz also threw water on the prospect of DC acquiring the French maker: "[We’re] talking to everyone about projects, and we're talking with DaimlerChrysler about platforms for the Smart. Period."

 

 

EATON’S RETIREMENT SEEN SOON The retirement of DC Co-Chair Robert Eaton next year is seen as increasingly likely, according to analysts. Last week, the Detroit News reported that Eaton would announce his official retirement date next summer. The paper also offers that Eaton has set the date several times before but has been egged on to stay by Co-Chair Juergen Schrempp. When the companies merged in November 1998, Eaton said he would retire within three years, after the integration of the companies was complete.

 

 

GM SLASHES DEVELOPMENT TIME GM is catching up to the Japanese when it comes to developing vehicles. Wayne Cherry, VP of design at GM, says his company will take only 24 months to develop vehicles it’s working on now, about half as long as it took just a few years ago. Cherry made the comments on "Autoline Detroit," a public-television program airing yesterday. Cherry also promised that the company would show more concept vehicles at Detroit — aside from those we showed you last week — that haven’t been seen outside the company.

Want to see those concepts again? Click here.

 

 

 

GM GETS USED-CAR STORE, FINALLY GM’s Internet-based used-car store finally has a real home, in Houston. Earlier this year, GM tried to open a delivery point for a new kind on online used-car store called DriverSite, but Texas lawmakers passed legislation to prevent car companies from selling used cars. GM solved the problem by finding an amicable dealer, George DeMontrond of Houston, who bought the dealership and operates it on behalf of the company. DriverSite is now in business (www.driversite.com)

and may inspire a network of similar stores if the concept takes flight. On the site, shoppers search dealer inventory, set up test drives for a $100 refundable deposit, and can buy for a no-haggle price on the spot.

 

 

ISUZU GIVES LONGEST WARRANTY Isuzu’s latest skirmish in the sales wars gives it the longest warranty in the new-truck business. Buy a new Isuzu, the company says, and you’ll get a new warranty that covers the vehicle's original owner or lessee for 10 years or 120,000 miles — the longest powertrain warranty by any automaker in the United States. The offer covers the engine, transmission, steering assembly, suspension and axles, beginning with 2000 model-year vehicles, Isuzu said. The warranty also can be transferred to immediate family members of the original owner. However, the award for comprehensive warranty coverage still goes to Hyundai, which offers a 10-year/100,000-mile powertrain warranty, five-year/60,000-mile bumper-to-bumper vehicle warranty, five-year roadside assistance protection, and five-year/100,000-mile anti-perforation coverage.

 

 

PIRELLI DENIES CONTI MERGER Pirelli SpA, Italy's largest tiremaker, denied that it's holding merger talks with Germany's Continental AG, the world's fourth-biggest, according to Reuters reports. The denial came after Continental Chief Executive Stephan Kessel said the two companies are natural partners and that an alliance would make financial and strategic sense. He added that Continental would be the dominant partner. There’s some history of note here: Pirelli tried to buy out Conti in 1990 but sold its shares in 1993 for a $210 million profit. Kessel's comments were "a friendly gesture towards Pirelli,'' said Peter Schwerdtmann, a spokesman for Continental.


 

 

FORD, MAZDA PLAN ON 250K UTES As the intros of both their compact SUVs draw nigh, Ford and Mazda say they’re prepared to build some 250,000 of their new shared SUV in Kansas City and Hofu, Japan. The Mazda 626-based vehicle, shown as the Mazda Activehicle at the Tokyo Motor Show, is set to compete against the Honda CR-V, the next-generation Toyota RAV4, and the Nissan Xterra. Ford’s version is said to be named Excape, Escape, or Exscape, depending on which rumored spelling you believe. Ford’s version will make its debut at the Detroit auto show in January.


 

 

 

PAILLART DITCHES FORD CREDIT Just 13 months after he signed on the dotted line as chief of Ford Credit, Philippe Paillart has resigned the Ford post. "Because of our stated objective to focus on automotive products and services, Philippe has decided to leave the company to pursue other opportunities in consumer financial services," Ford CEO Jac Nasser said in a five-paragraph announcement to employees. Paillart, 48, was one of a growing group of execs Nasser recruited from outside Dearborn; he’s also the first of that clique to leave the company. A new head for the world’s largest automotive finance company will be named this year, officials said.

 

 

NISSAN UPS INVESTMENT IN ENGLAND While its fortunes in Japan are down, Nissan is betting on the future in Europe. The company will spend $120 million to revamp its Sunderland, England, plant to produce the next-generation Primera (same as Infiniti G20) sedan. The money will also be used to retrofit Nissan’s Micra production line so that the Renault Clio can be built alongside it. The Sunderland factory, in northeast England, was last month nominated Europe's most efficient car plant for 1998 by the Economist Intelligence Unit.

For more on Nissan’s restructuring, click here


 

 

 

DAEWOO HAS WORLD'S MOST EFFICIENT PLANT Daewoo’s car assembly plant in the southern Korean city of Changwon, which mainly produces compact cars, is the world's most productive car plant, says the Economist Intelligence Unit. The plant, which upped its production to 165 cars per employee last year from 99 cars in 1997, narrowly outperformed the previous year's most productive facility, a Mitsubishi Motors Corp. plant in Mizushima, Japan, which turned out 163 cars per employee, Reuters reports. The remaining top 10 plants this year were Japanese, the EIU said. At the Tokyo show, Daewoo offered that it might sell its automotive assets to GM.


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