Week of November 22, 1999

November 22, 1999

GAS PRICES DOWN FOR THANKSGIVING
AUTO AFFORDABILITY IMPROVES AGAIN
WORST TRAFFIC IN U.S. CITIES CITED
CHINA OPEN TO WORLD TRADE
FORD STALLING SUIT ENDS IN MISTRIAL
FORD TOPS SALES MARK EARLY
24-7 CUSTOMER SERVICE FOR FORD
LEXUS ADS SELL SAFETY
NAME ISUZU’S NEXT SUV
KIA RECALLS SEPHIA
SAAB TO DOUBLE MODEL RANGE
HYUNDAI’S BROWN BAG GROWS
CARBON MONOXIDE DETECTORS FOR YOUR CAR
GM’S SMITH NAMED LEADER OF THE YEAR
HOLLAND & HOLLAND RANGE ROVER FOR 2000
BENZ OPENS ALABAMA OFF-ROAD COURSE

 

GAS PRICES DOWN FOR THANKSGIVING The American Automobile Association reported that the average retail price of gasoline in the United States dropped to $1.282 a gallon this month, the first decline in 22 months, while the number of Thanksgiving holiday travelers is projected to increase by about 200,000 over last year. The Western United States has the most expensive gas prices at $1.398 per gallon, while the least expensive gasoline was in the Southeast at $1.196 per gallon. Not surprisingly, AAA estimates that the highest volume of motorists will come from the Southeastern states, with an estimated 7 million travelers during this Thanksgiving holiday.

 

 

AUTO AFFORDABILITY IMPROVES AGAIN Think the cost of today’s vehicles is too high? According to Detroit-based Comerica Bank, cars and light trucks are the most affordable they’ve been in the last 20 years. Comerica’s Auto Affordability Index, compiled every quarter, shows that the purchase of an average-priced new vehicle during 1999’s third quarter required 23.4 weeks of median family income, before taxes, rivaling the 23.1 week average recorded in the first quarter of 1980. According to David L. Littman, chief economist at Comerica, vehicles are more affordable because personal incomes grew by 1.2 percent, while auto prices were unchanged.

 

 

WORST TRAFFIC IN U.S. CITIES CITED The Texas Transportation Institute has released its annual study based on state and federal commuting figures of 68 U.S. cities. It found that while several of the worst cities for traffic (including San Francisco and Los Angeles) saw little or no increase, traffic problems have spread to smaller cities like Indianapolis, which saw a 225-percent increase in the average amount of time spent in traffic over the last five years. Overall, the institute found that the average driver in the 35 most congested areas uses four extra tanks of gasoline sitting in traffic per year.

 

 

 

CHINA OPEN TO WORLD TRADE In a trade agreement reached Monday, China will now enter the World Trade Organization, opening the country of 1.3 billion people to competition from foreign markets, including America. As part of the agreement, China will reduce its tariffs on imports by 23 percent and will open many of the markets formerly declared off-limits to foreign competitors. Within the automotive industry, tariffs on imported automobiles, which currently range from 80 to 100 percent, will be reduced to 25 percent by 2006. American auto finance companies will also gain access to China’s auto market for the first time. John Smith Jr., GM’s chairman, said it was "in everyone’s best interest" to bring China into the "mainstream of the trading community."

 

 

 

FORD STALLING SUIT ENDS IN MISTRIAL A mistrial was declared in a class-action lawsuit against Ford Motor Co. after jurors remained deadlocked following 12 days of deliberations. The lawsuit accused Ford of a design defect that made millions of vehicles prone to stalling. Jurors deadlocked 7-5 and 8-4 in favor of the consumers on two key questions of liability; nine votes are needed for a verdict in civil cases. The lawsuit, on behalf of 3.5 million current and former California owners of Ford vehicles in model years 1983-95, contends the vehicles stalled because an ignition device was mounted in the wrong place. Ford denied any defects, saying its vehicles were no more prone to stalling than any others and posed no safety hazard. Complaints prompted Ford to recall 1.1 million 1984-85 vehicles in 1987 to repair their ignition devices. The National Highway Traffic Safety Administration investigated in 1984, 1985 and 1987 and found no safety defects.

 

 

FORD TOPS SALES MARK EARLY Ford’s U.S. sales of new cars and trucks surpassed the 3 million mark on Tuesday — the earliest date that they’ve ever passed that milestone. The top-selling American brand of cars and trucks for the last 13 years, Ford’s sales have topped 3 million every year since 1993.


 

 

24-7 CUSTOMER SERVICE FOR FORD As part of its global campaign, Ford has joined with TeleTech, a provider of e-commerce-based customer relationship management services, to provide customer service 24 hours a day, seven days a week. The joint venture, which is expected to be formed in early 2000, will mean that customers will be able to contact Ford by phone, as well as e-mail, fax and letter, at any time of the day or night. Furthermore, customer service will have access to all information relating to that customer’s sales, service or ownership, allowing all questions to be addressed in a single call. "Ultimately, the system will provide consumers with a direct method of connecting with Ford engineers and other company personnel," said Brian Kelley, vice president of Ford Motor Co. and president of Ford Consumer Connect, the group that will oversee the program.

 

 

LEXUS ADS SELLS SAFETY Based on research that Lexus owners seem to be worried about fellow drivers' bad habits while on the road, Lexus has created a television advertising campaign featuring a humorous look of the bad habits (such as eating, changing a shirt or talking on a cellular phone) of "other" drivers. "The Other Guy" television ads, which will begin appearing Nov.29, emphasize Lexus’ safety features and point viewers to a new safety-oriented Web site, LexusSafety.com. The site focuses on Lexus’ safety features, offers driving tips, and provides links to other safety sites, such as NHTSA.

 

 

NAME ISUZU’S NEXT SUV This past week, Isuzu launched the first Internet-driven contest to name a vehicle. The Isuzu Ultimate Naming Challenge invites contestants to name its newest concept SUV. The winner of the contest, which ends Dec.15, will receive his or her choice of a new SUV from Isuzu. "Our marketing slogan tells consumers that we ‘Go Farther’ in all we do. … Even the cherished launching of a new concept model is fair game," explained Bob Reilly, Isuzu’s senior vice president.

 

 

KIA RECALLS SEPHIA Kia last week recalled 83,403 of its Sephia cars to repair the windshield wipers. Kia will replace a faulty wiper link, which could disengage from the wiper motor and cause the wipers to stop functioning. The recall includes 1998 and 1999 models. Owners will be notified by mail, and dealers will replace the link for free, Kia said.


 

SAAB TO DOUBLE MODEL RANGE Saab Automobile AB plans to double the number of models it makes from five to 10, as part of a sales offensive in the next five years, Robert Hendry, the company's president, told the Wall Street Journal Europe. The company, jointly owned by Sweden's Investor AB and General Motors Corp., needs a bigger product range and intends to build cars with a common chassis, transmission and key electronics, he said, indicating Saab may develop a sport-utility vehicle, and wants to double its output within five years. Hendry, who is also the chairman of GM's Adam Opel AG unit, said he hopes GM will decide by the end of the year whether to increase its 50-percent stake in Saab Auto or take full control, the WSJ said.


 

 

 

HYUNDAI’S BROWN BAG GROWS Apparently, Hyundai’s unscientific market research project, the Hyundai Brown Bag Challenge, which compared its flagship Sonata to the Toyota Camry, yielded yummy results. Nearly 600 consumers participated in the challenge at a mall in Escondido, California, test-driving both vehicles (which were wrapped in brown bags to conceal the manufacturer) and then choosing Car A or B as their preference. With 73 percent selecting the Sonata, Hyundai public relations manager Donna Kane says the company is thrilled with the results and plans on expanding it to other cities.

 

 

CARBON MONOXIDE DETECTORS FOR YOUR CAR Building on the Journal of the American Medical Association’s study that 57 percent of the unintentional deaths caused by carbon monoxide (CO) were from vehicle exhaust, a company has developed a CO detector for motor vehicles. Quantum Group Inc., a leading manufacturer of sensors for CO home detectors, has developed the COSTAR Model P-1. The CO detector, which is about the size of a garage door opener and is designed to clip to the sun visor, will be marketed to consumers.


 

 

GM’S SMITH NAMED LEADER OF THE YEAR John "Jack" Smith Jr., chairman and CEO of General Motors Corp., was named the 1999 Automotive Industry Leader of the Year by the Automotive Hall of Fame in Dearborn, Michigan. The award is presented to the individual that contributes the most to the advancement of the automotive industry. Smith was cited for his work on several major GM initiatives. Among the reasons were his leadership for the collaboration with Toyota to develop alternative vehicle propulsion technologies, the spinoff Delphi Automotive Systems, and the creation of e-GM, the company’s new business group.


 

 

HOLLAND & HOLLAND RANGE ROVER FOR 2000 Land Rover announced collaboration with Holland & Holland, a company famous for its handcrafted firearms and sporting apparel, to create the 2000 Holland & Holland Range Rover. Production, which is scheduled to begin in December, will entail only 400 units, with just 125 slated for American retailers. The Holland & Holland Range Rover’s interior will echo the classic design of the company’s firearms. Walnut veneer on the doors will be inlaid with metal to simulate engraving, while the interior trim design will be reminiscent of its signature blue/black chrome metal.


 

 

BENZ OPENS ALABAMA OFF-ROAD COURSE M-Class customers taking delivery in Tuscaloosa, Alabama, as part of the Experience The Source delivery program can now get a demonstration of the vehicle’s off-road capability on a two-mile off-road test track. "A certified driver takes clients for a demonstration ride in an M-Class vehicle through tough terrain that includes steep inclines, water and potholes, gravel, railroad ties, log bridges and water crossings, a stair and rock climb and torsion tests," said Thomas Struthwolf, assistant manager for the Visitor Center. The delivery program, which debuted in February, also includes a factory and museum tour and customized road trips through the Southern United States.


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