Week of May 31, 1999

May 31, 1999



CARS MORE AFFORDABLE IN FIRST QUARTER According to Comerica Bank’s quarterly Auto Affordability Index, the purchase of an average-priced new vehicle during the first quarter of this year required 23.7 weeks of median family income before taxes, compared to 24.2 weeks in the fourth quarter of 1998. Detroit-based Comerica also figures the average vehicle price in the first quarter was $20,611. "Vehicles now are at their most affordable level in 19 years," said David L. Littmann, Comerica chief economist. "Not since the second quarter of 1980 have cars been this affordable, when you consider all the variables that go into a vehicle purchase." The principal factors leading to improved auto affordability in the first quarter were rapid income gains and lower financing rates, Littmann said. The bank’s Auto Affordability Index is compiled from Commerce Department and Federal Reserve data.








NHTSA WARNS ON DC MINIVANS Officials at the National Highway Transportation Safety Administration (NHTSA) say that recent tests show inflating air bags in some DaimlerChrysler minivans could seriously injure or kill short female passengers. On Tuesday, NHTSA announced they had tested four different types of dummies in eleven tests; in six of those tests, the airbags impacted the dummies with enough force to injure seriously or to kill a comparable small adult passenger. DaimlerChrysler officials strongly disputed the results, saying that the tests caught the dummies in a way that real passengers never would be found. NHTSA officials have not started the formal investigative process required of the minivans, or any other vehicle, before they would request any recall.




FORD TRUCKS TO GO LOW (EMISSIONS) Ford plans to make all of its trucks low-emission vehicles, starting with the 2000 F-Series, company officials announced last week, to bolster the company’s new environmental bent. The decision will involve more than 800,000 F-series pickup trucks and 360,000 Ranger compact pickup trucks annually; the Ranger pickups are scheduled to be low-emission vehicles by the 2001 model year. Last year, Ford said it would convert its sport-utility vehicles and Windstar minivans to low-emission powerplants. Ford says the reductions in pollution as a result of this action will be equal to eliminating emissions from 350,000 full-sized pickup trucks. Ford also says that the costs of cleaning up the emissions, will not be passed on to customers in the form of higher prices.






DEVILLE DEFROCKED Against Cadillac’s quoted August 1 press embargo, the first picture of the 2000 DeVille squeaked into a handful of small publications last week (maybe you’ve read them: The Wall Street Journal, Automotive News, AutoWeek). So we’re joining the fray with this photo of the DeVille, which sports a Northstar V-8 powertrain and shares its new chassis with the Seville. The DeVille will offer Cadillac’s Night Vision infrared sensor system when it goes on sale close to the end of summer. We’ll give you a full wrap-up on the Caddy – including more pictures – in our August 2 issue.



LICENSE INFO FIGHT GOES TO SUPREME COURT The Supreme Court will decide if states have the right to sell information given on driver-license applications, the AP reports. The justices will use a dispute from South Carolina to decide, sometime in 2000, whether Congress unlawfully usurped state governments' authority when it enacted the Driver's Privacy Protection Act of 1994. The law, which took effect in most states in 1997, bars states and their employees from releasing most "personal information'' about drivers gathered in the licensing process including names, addresses, telephone numbers, and Social Security numbers. Before the federal law banning the information sale was enacted, some 34 states made motor vehicle records public. The law exempts disclosures made to law enforcement officials, courts, governmental agencies and private investigators, but no exemption is included for the news media, moving some open-record advocates to contend that the law violates the First Amendment's free-press guarantee.






NISSAN SETS MAXIMA, XTERRA PRICING Nissan says its 2000 Maxima sedan will sticker at $21,049, $450 less than the previous version, and announced the Xterra sport-utility vehicle will begin at $17,349. The most expensive Maxima GLE will cost $26,249. The Xterra, Nissan's new sport-ute, will top out at $25,549. Most are expected to sell in the $19,000-$23,000 range.

Prices do not include delivery fees of $520. Nissan also announced that the Xterra on-sale date has been moved up 10 days to May 25, to avoid a possible vehicle-hauler strike and to meet shopping demand over Memorial Day weekend.







FORD RECALLS VIC AND MARQUIS Ford Motor Co. will recall about 279,000 full-size sedans to replace a cruise-control switch that could short-circuit and create a fire, the company announced last week. The recall affects the 1992 and '93 Lincoln Town Car, Mercury Grand Marquis and Ford Crown Victoria sedans equipped with factory-installed cruise control. About 10,900 of the recalled cars are in Canada. There have been 147 reports of fires and two reported injuries attributed to the defect, Ford spokeswoman Karen Shaughnessy said. No deaths have been reported. Ford said in a statement that a potentially defective cruise control deactivation switch could short-circuit, which in turn could overheat and catch fire. A short also could disable the cruise control system and blow the brake light fuse. The automaker said it is in the process of acquiring replacement switches; until then, customers will be asked by mail to take their cars to their dealer to have the cruise control disabled pending repair. The repairs will be made for free.




MAZDA SEES FIRST BLACK IN SIX YEARS Mazda last week reported its first profit in six years, for the fiscal year that ended March 31, Bloomberg reports. Mazda earned $250 million last year, or 25.25 yen a share. On the verge of bankruptcy when Ford took control in 1996, Mazda has turned itself around by slashing parts costs and offsetting slumping sales in Japan and elsewhere in Asia by boosting exports to Europe and the U.S. The Hiroshima-based automaker is effectively controlled by Ford, which owns 33.4 percent of Mazda. Ford has helped the Japanese automaker cut debt by a fifth since the mid-1990s to about 400 billion yen by slashing engineering and purchased-parts costs.




NISSAN LOSES $281 MIL IN ’98 Japan's second-biggest carmaker, Nissan Motor Corp., posted a loss of $281 million for the latest fiscal year. The company also skipped its customary dividend payment for the first time since its shares were listed in 1951. Nissan expects another loss this year. In March, France's Renault SA acquired a 36.8% stake in the company for $5.18 billion in March, which Nissan plans to use to alleviate some of its estimated $35 billion debt and to finance a new generation of vehicles.




NISSAN, RENAULT GET CLOSER Separately last week, Nissan and Renault announced last week that the next generation of the Renault Megane, due out in 2002-03, will adopt the platform now used by Nissan's Sunny (Sentra in North America). The automakers had previously decided to share a platform between the Nissan Micra and Renault Cleo. Eventually, Renault and Nissan say they will pare their combined 34 platforms to just 10. In a further development, Nissan says it will begin selling the Renault brand in Japan when Renault's current arrangement with France Motors ends in mid-2000.




FORD LOSES DEVINE’S INTERVENTION Ford Executive Vice President and Chief Financial Officer John M. Devine will retire at the end of September, the company said in a press release last week. Devine was named group vice president and chief financial officer in October 1994.

Ford named Vice Chairman W. Wayne Booker to the additional post of chief financial officer, replacing Devine. Vice Chairman and Chief of Staff Pete Pestillo will assume the added responsibility for the oversight of Visteon Automotive Systems, Hertz and Ford Land. The press release also stated that Devine will work with Booker and Pestillo in a transition period for several months.




GM TRANNIES GO TO BALTIMORE GM announced on Thursday that it has chosen a site in Baltimore County, Maryland for a new $250 million transmission plant. Allison Transmission, a GM subsidiary, will build the 400,000-square-foot plant on the 65-acre site of a former gravel quarry near White Plains, Md. The plant initially will employ about 300 workers now employed at GM's Broening Highway plant in Baltimore City. Though no new jobs will be created, the new plant will ensure that 500 autoworkers remain in the area. "This is the first heavy manufacturing plant to be built in Maryland in 30 years,'' Maryland Gov. Parris Glendening said, standing on the future site of the plant.




EIU SAYS TOUGH TIMES AHEAD The global car industry is in for a rough trip over the next few years, with falling sales and numerous plant closures and mergers, according to a forecast released on Thursday by the Economist Intelligence Unit, Reuters reports. Graeme Maxton, associate editor for the market analysis firm, also says that within a few years, the car market will be dominated by eight to 10 companies, versus today's 15 or so. The EIU predicts World car sales will fall six percent this year and three percent next year, following a two percent decline in 1998, to reach their lowest levels since the 1980s. General Motors will lose ground over that period, but will emerge as the world's largest automaker. Ford, even with the addition of Volvo to its portfolio, will lose its standing as second-largest builder to Volkswagen by a narrow margin in 2005, Maxton forecasts. He added that the industry is equipped to build 77 million cars and trucks a year, but 1999 sales were expected to be only 47 million units. "With supply likely to exceed demand even more in 2000, the pressures for carmakers to cut prices, cut costs, merge or close will increase still further," he told Reuters. Likely acquisition targets are Suzuki and Subaru.




MITSU TO LAUNCH STINGIEST CAR Mitsubishi said on Wednesday it will launch a new compact car that will have the highest fuel efficiency among gas-powered automobiles. Mitsu’s high-fueler will use an improved version of its direct gasoline injection (GDI) engine, as well as a system that automatically cuts off the engine at stops. The company hopes the car will be able to run 78 miles on one gallon of gasoline. Suzuki’s Japan-only Alto minicar has the highest fuel efficiency among gasoline cars: the 660-cc minicar can run 68 miles on a gallon of gas. The new compact car under development is expected to be manual transmission and equipped with 1.0-liter engine.





TOYOTA TARTS UP PRIUS Toyota has found a way to bring its environmentally clean hybrid car, the Prius, to attention of readers of British tabloid newspapers with their bare-breasted "weather girls" on Page 3. "Toyota wins car of the year to have sex in!" says the press release. "In Japan, couples keen to get to know each other but frustrated by the lack of private space rent rooms by the hour at so-called Love Hotels," said Toyota. "Which explains why Penthouse Japan declared that Prius was the Mobile Love Hotel for the 21st Century." The Prius won not because of its very low exhaust emissions, but because of the potential of "its free and open front-seat area." The Prius is now on sale in Japan, and it will be exported to the United States and Europe. Although it will be altered for European driving conditions when it arrives in the UK next year, said Toyota, "The front seat will remain usefully unaltered."


The Car Connection
See the winners »
The Car Connection
Commenting is closed for this article
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from The Car Connection. I understand that I can unsubscribe at any time. Privacy Policy.
Thank you! Please check your email for confirmation.