Week of August 16, 1999

August 16, 1999





FIAT SAYS ‘NO COMMENT" TO TCC REPORT Fiat has declined comment on a report in last week’s issue of The Car Connection on a possible partnership with General Motors. "We do not comment on press rumours," a Fiat spokesman told Reuters.

Last week’s TCC reported that Fiat had approached GM about a partnership that might have ranged from technology swapping to an eventual merger of their automotive operations. According to our sources, GM insiders say the Fiat deal isn’t going to happen. Last month, Fiat Chairman Paolo Fresco was quoted as saying the group must first strengthen itself "on its own" before considering any possible alliances "from a strong position."
Read all about the GM/Fiat talks by clicking here



GAS PRICES HIT 22-MONTH HIGH What would summer vacation be without higher gas prices? Last week, U.S. retail gasoline prices rose for the sixth week in a row, bringing fuel prices to a 22-month high of $1.206 a gallon. The Department of Energy says today’s prices are the highest since the week ending October 6, 1997. In February, before fuel-producing nations cut production, gas prices averaged 90.7 cents a gallon, the lowest since the DOE surveys began in 1994.



SENTRA WILL BE "SULEV" The next Nissan Sentra, due out early next year, may be certified as the world’s first super ultra-low emissions vehicle (SULEV), Nissan trumpeted last week. The SULEV engine, a 1.8-liter four-cylinder, is expected to emit about one-fourth of the unburned hydrocarbon and one-tenth of the oxides of nitrogen (NOx) emissions of the cleanest gasoline-powered car sold now in California.

"As a point of comparison, a person will be able to drive this new 2000 model Sentra with the 1.8-liter engine 10 miles to work, return home and have the vehicle emit less than a typical new car parked in a driveway all day with its engine shut off," said Robert Strassburger, Nissan North America’s director for government and technical affairs. The Sentra will debut at the North American International Auto Show in Detroit in January and go into production February in Aguascalientes, Mexico.





FORD, HARLEY CRUISE TOGETHER Ford and Harley-Davidson last week showed reporters gathered in South Dakota their newest baby, the Harley-Davidson F-150. The 2000-model truck is the first product from a five-year alliance the two companies announced in March. The pickup, which will be available next spring, will be built in Oakville, Ontario, and will be an all-black, two-wheel-drive SuperCab with the flareside body. Orange pinstriping and extra chrome flesh out the newest Hog. No pricing has been announced yet; look for a full report next week here at The Car Connection.



GM, TOYOTA TO BUILD UTES? Both strapped for truck production in the U.S., GM and Toyota are talking about converting their California joint-venture plant into a sport-utility vehicle plant. Reports from various Japanese and American news wires suggest the companies will switch over the Fremont, Calif., plant that builds Toyota Corollas and Chevrolet Prizms to sport-utility vehicle production by 2001. The reports also suggest Chevrolet will drop the slow-selling Prizm at that time, and Toyota will move Corolla production to another North American facility. The joint-venture plant, known as New United Motor Manufacturing, Inc., (NUMMI) was founded in 1984.



BEETLE IS BEST FOR FRONT PASSENGER What’s the best compact car for front-passenger safety? The ever-perky VW Beetle, says the National Highway Traffic Safety Administration (NHTSA). The Beetle won a five-star rating for the passenger safety and a three-star rating for backseat riders, in NHTSA’s final round of 1999 testing.

A five-star rating represents a 5 percent or less chance of serious injury, NHTSA said. Three stars equal an 11-20 percent chance of serious injury. The Beetle is also the only one of 16 small cars to earn an overall "good" rating from the Insurance Institute for Highway Safety.





COBRA STANG RECALL? We’re checking this item out with Ford sources, but in the meantime we thought you’d like to know about this tip sent in by a TCC reader: "Effective immediately, all dealers must discontinue the sale of all 1999 SVT Mustang Cobra vehicles. Ford's Special Vehicle Team recently completed an investigation into a customer concern regarding a shortfall in engine power on the 1999 SVT Mustang Cobra. The investigation has confirmed the 1999 SVT Cobra is not achieving its horsepower rating of 320hp. We are preparing a communication to all 1999 SVT Cobra owners advising them of this concern, and informing them that they will be contacted when parts to complete the service action are available. " We can’t claim for the veracity of this report, but we’ll let you know as soon as we get an official word from SVT.



OPEL LOSES $440 MILLION Wonder where the holes are in the GM dam? Adam Opel AG, the German subsidiary of General Motors Corp., lost some $439.5 million in 1998, according to the German business daily Handelsblatt. The losses came even as Opel won back market share in Germany, rising to 15.1 percent from 13.4 percent thirteen months ago; according to the paper, Opel has said it may not return to profit this year as competition in the market intensifies. General Motors last month said second-quarter earnings climbed to a record $1.73 billion from $350 million a year earlier as its market share in Europe rose. However, GM previously announced it had lost money in Europe but declined to name the amount.



FORD TESTING CONCIERGE SERVICE Is Ford getting into a hotelier state of mind? According to Automotive News, the world’s second-largest automaker is testing an automotive concierge service in Chicago and Los Angeles, which offers to arrange car washes and oil changes on your behalf. Ford has been on a customer-service tear as of late, buying up Automobile Protection Corp., an Atlanta-based seller of extended-service contracts, and Kwik-Fit Holdings Plc, Europe's largest independently owned car-service chain. Last week, Ford also announced an investment in Carclub.com, an automotive owner Internet site.



FOCUS GOES LIVE Striking out to tackle the twenty-something demographic, Ford will air a series of live TV commercials as it rolls out the Focus subcompact this fall.  The 64 commercials will feature comedian and actress Annabelle Gurwitch, host of cable TV’s "Dinner and a Movie." For more buzz, Ford will loan customized Focuses (foci?) to what the automaker describes as "120 trendy people'' — club DJs, concert promoters and such — in New York, Los Angeles, San Francisco, Miami and Chicago. The live ads begin Sept. 9, during the MTV Video Music Awards show.



GM GOES ONLINE FOR FUTURE General Motors Corp. says it plans to move more aggressively to use the Internet in all facets of its operations, from manufacturing through online sales and in-car electronic services. By combining its various electronic services and creating new ones, GM intends to speed up the product development cycle, reduce the time it takes to get customized cars to customers, simplify the sales process by selling online, and then add billions in new business through a range of electronic subscription services that could keep revenues flowing long after customers pay off their car loans.
For more on e-GM, click here



CHRYSLER GOES ORGANIC DaimlerChrysler says it has retained Organic, Inc., a San Francisco Web design shop, to shore up and integrate the company’s online presence.  DaimlerChrysler is in the midst of a technology push that created a system of Web sites for its Dodge, Chrysler, Plymouth and Jeep brands, with funding of $500 million, Reuters reports; dubbed its "Customer Connect" initiative and under way since 1997, it will integrate all dealer and factory systems. Organic's work sheet will include developing a unified interactive strategy, building and managing customer relationships, Web design and architecture and technical enhancements to the existing sites. A team of 100 Organic staffers has been in Detroit for several months working on refreshing Web sites for the year 2000 models that will be launched in September.





EBAY TO SELL NEW CARS? eBay is musing a new category of merchandise to auction alongside Fiesta ware and Elvisiana — automobiles. Fueling the new direction: eBay's purchase of Kruse International, an auctioneer of collectible cars. Recently, eBay's site has been plagued with system failures, including one that lasted more than nine hours last week and a 21- hour shutdown in June.
For more on the online buying experience, click here
For this month’s Digital Autobahn column, click here



AUTOWEB TO SELL NEW CARS Autoweb.com Inc., an online car-shopping site, will add direct sales of new cars to its dealer-referral service in an effort to counter competition from AutoNation Inc. and CarsDirect.com, Reuters reports. Autoweb.com said it plans to begin testing the service this month in several states. A customer will select a model from the company's site, then Autoweb.com will call the customer with a price. The customer then commits to a purchase with a deposit and receives the vehicle from one of Autoweb.com's 5,000 dealers, said Dean Debiase, president and chief executive.
For more on the online buying experience, click here
For this month’s Digital Autobahn column, click here


AN EGGPLANT-SHAPED CAR? Toyota has spaced us out before with MR2s that look like Ferraris, but now Japan’s number-one carmaker is going to the garden for inspiration. Japan’s Nihon Keizai newspaper says the company will introduce a vehicle shaped like an eggplant at this fall’s Tokyo Motor Show. The aubergine-inspired vehicle is the first model developed by a special design division established by Toyota Chairman Hiroshi Okuda himself when he was Toyota's president. Okuda said he expects to sell only about 100 of the cars per month, while retail salespeople have forecast monthly sales of about 3,000 units, the report said. It is unknown if the vehicle will only be produced in purple.

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