Week of July 12, 1999

July 12, 1999

M-CLASS, RX300 GET TOP CRASH HONORS
NHTSA LEAVES DC MINIVANS ALONE
GM SAYS CRASH TESTS SHOULDN’T APPLY
GM SOCKED WITH $5 BILLION VERDICT
RECALL ROUNDUP
VW TO TAKE ON BENZ, BMW, AUDI?
FIAT, MITSU TO BUILD SUV
BENZ SLR GETS GREEN LIGHT
GM, ISUZU DO A DIESEL FOR TRUCKS
BENZ SUED OVER V-6 HEADS
GM DRIVERSITE HAS SUSPENDED LICENSE
DOOLAN LEAVES BMW FOR FORD
DC LOOKING AT VOLVO TRUCKS?
VOLVO ADMITS PRICE FIXING
INAKI SURFACES AGAIN
 
 
 
 

rx300

rx300

M-CLASS, RX300 GET TOP CRASH HONORS The latest rankings from the Insurance Institute for Highway Safety (IIHS) put the 1999 Mercedes-Benz M-Class and Lexus RX 300 at the top of the midsize sport-ute crash list. Both scored "good" ratings in a 40-mph barrier crash test. Sliding down the scale, the Land Rover Discovery Series II and Dodge Durango earned "acceptable" ratings, while the Jeep Grand Cherokee was deemed "marginal" and the Mitsubishi Montero Sport "poor." "There's a huge difference between the best and worst performers," said the institute's president, Brian O'Neill, in a release issued with the results.
MClass

MClass


  
  
  
 

NHTSA LEAVES DC MINIVANS ALONE The Feds, meanwhile, have decided not to investigate DaimlerChrysler’s minivans for side-airbag defects. The National Highway Traffic Safety Administration won’t probe further into the vans’ safety, according to a report in the Washington Post, because the agency decided the 12 deaths attributed to the vans’ airbags weren’t out of line with other vans. Two consumer groups, Public Citizen and Parents for Safer Air Bags, had demanded that DaimlerChrysler recall its 1994-97 Dodge Caravan, Plymouth Voyager and Chrysler Town & Country minivans, saying that the vehicles posed a great risk to small adults and children.

GM SAYS CRASH TEST SHOULDN’T APPLY GM is seeking an exemption from a NHTSA crash test that could trigger the recall of about 279,000 1999 Chevrolet Tahoe, GMC Yukon, Cadillac Escalade and Chevrolet Suburban sport-utility vehicles. During NHTSA testing earlier this year, the vehicles’ airbags allowed a crash-test dummy’s neck to extend slightly beyond the allowed parameters. The airbags are part of the current generation of "de-powered" airbags that inflate with less force, to protect smaller passengers. GM calls the results "inconsequential'' to safety; if NHTSA declines the request, the company will be forced to recall the vehicles and install new airbags.


  
  
 

gm1

gm1

GM SOCKED WITH $5 BILLION VERDICT GM must pay $4.9 billion to six people burned when their 1979 Chevrolet Malibu was hit from the rear and caught fire, according to Reuters. Last week, a jury found GM liable for the fire and awarded

Patricia Anderson, her four children, and family friend Jo Tigner $107 million in compensatory damages and $4.8 billion in punitive damages for injuries they suffered during the 1993 accident. The group was traveling home from church services on Christmas Eve when the car was struck from behind and exploded. A GM spokesperson said the verdict will be appealed.


  
  
  
 

RECALL ROUNDUP It’s a week of recalls, Japanese-style. In four separate recalls issued last week, the following carmakers are bringing the indicated vehicles back for warranty fixes: Honda, for 935,000 1996-98 Civic small cars to fix sliding driver-side floor mats that could interfere with the accelerator pedal; Mazda, for the brand-new 2000 MPV minivan to fix the lower intake manifold assembly, which could leak fuel or cause the vehicle to idle roughly; Infiniti, Nissan’s luxury division, for 16,735 Q45 and I30 cars from model-years 1997-98 because damaged alternator diodes can cause engine fires; and Subaru, for 95,000 of its 1994-95 Imprezas and 1995-96 Legacys because front tow hooks can accidentally cause the airbags to inflate.

VW TO TAKE ON BENZ, BMW, AUDI? A German newspaper reports that Volkswagen has firmed up its plans to take on Mercedes-Benz and BMW — a move many insiders have questioned in light of the existence of VW’s own luxury Audi brand. Germany’s Auto Zeitung says that two cars, known inside VW as D1 and Passat Plus, are under development for release in the next two years. According to the paper, the D1, will be an S-Class competitor, powered by a V-12 engine and priced substantially below the Benz’s $77,000 price tag. The Passat Plus, meanwhile, will be a stretched version of today’s Passat sedan with a more powerful engine, designed to go head-to-head with the Benz E-Class and BMW 5-Series. Lastly, the paper says the New Beetle convertible, which VW has said it is thinking about building, would go on sale in late 2001.

For more on a Beetle Convertible available right now, click here

FIAT, MITSU TO BUILD SUV On a much smaller scale than had been rumored, Japan’s Mitsubishi and Italy’s Fiat are combining car-making efforts. The joint venture will build a new generation of sport-utility vehicles in Pininfarina facilities in Turin, Italy, beginning in 2001. Fiat will design the interior and exterior of the three-door and five-door vehicles, while Mitsubishi will supply the chassis and four-wheel-drive system. Fiat had been seeking a partnership to enter the SUV realm, while Mitsubishi had been searching for a way to cut its own development costs. The two companies foresee sales of 65,000 units per year for the vehicle; export plans haven’t been announced. Last week, Mitsu President Katsuhiko Kawasoe also said his company’s partnership with Volvo in the Dutch NedCar program may be scrapped if the new Volvo owners at Ford decide to cancel the successors to vehicles produced in the Netherlands.


  
  
  
  
  
 

SLR

SLR

BENZ SLR GETS GREEN LIGHT Hold onto your handbrakes: DaimlerChrysler says it’s going to build the hot Benz SLR we told you about a month ago ("Mercedes-Benz SLR," June 6, 1999). The SLR will be built in England with the help of McLaren Cars Ltd. Expected in 2003, the new SLR will sport a carbon-fiber body and a 544-hp supercharged V-8 engine. In a return to styling hallmarks, the SLR will also sport gull-wing doors and Benz’s four-eyed headlamps. The project will cost an estimated $200 million as it takes shape in Woking, England. Stay tuned for more SLR news and pictures as they surface.

GM, ISUZU DO A DIESEL FOR TRUCKS Already cooperating on a new range of compact pickups, GM and Isuzu now say they’ll jointly build a new diesel V-8 engine for commercial use. The direct-injection Duramax 6600 V-8 engine, designed by Isuzu and developed with GM, will be built in a new 650,000-square-foot plant in Moraine, Ohio, beginning next summer. The 6.6-liter turbocharged engine will be optional in the Chevrolet Silverado 2500 and 3500 series models and the GMC Sierra model, starting in the 2001 model-year. Last December, GM spent $456 million to up its stake in Isuzu from 37.5 to 49 percent.


  
  
  
 

BENZ SUED OVER V-6 HEADS Mercedes-Benz USA has been slapped with a lawsuit charging the heads on its V-6 engine are pirated from another design. Feuling Advanced Technologies Inc. says that Mercedes-Benz copied its emissions-friendly three-valve engine technology in some 360,000 cars and M-Class SUVs since 1997. The Ventura, California, company filed the suit in U.S. District Court in San Diego. A Mercedes-Benz spokesman says the suit is baseless.

GM DRIVERSITE HAS SUSPENDED LICENSE GM’s attempt to sell its own used cars itself has hit a legal snag. The state of Texas has denied the General a license to sell used cars directly to customers in the Houston area, saying that the state doesn’t allow car companies to own or control dealerships. According to Automotive News, GM's DriverSite program was denied a license to transfer titles for used vehicles in a June 29 letter from the Texas Department of Transportation's Motor Vehicle Division licensing section to Ross Hendrix, GM's director of used-car retail operations. DriverSite allows customers to buy off-lease GM vehicles via the Internet and take delivery from two or three company-owned sites in Houston. GM has leased the sites for the stores and had prepared one storefront for the venture.


  
  
  
 

DOOLAN LEAVES BMW FOR FORD Continuing the exodus from BMW, the company’s U.S. president, Victor Doolan, resigned last week to join former BMW product chief Wolfgang Reitzle’s new Ford luxury-car team. Doolan, 58, will serve as executive director of North America marketing and distribution strategy for the Premier Automotive Group, which oversees Ford's Jaguar, Lincoln, Volvo and Aston Martin brands. He will report to Reitzle, the head of the London-based group. Doolan, a 22-year BMW veteran, had been president of BMW of North America Inc. since 1993, and is credited with pushing the X5 sport-ute and Z3 roadster. BMW said Tom Purves, 50, will run the business on an interim basis until a successor is named. Purves is chairman and chief executive of BMW U.S. Holding Corp.


  
 

DC LOOKING AT VOLVO TRUCKS? News reports from Sweden say that Volvo AB, the truck company left in the wake of Ford’s purchase of Volvo’s car-making unit, and DaimlerChrysler AG are considering a merger and are negotiating the price. The Swedish business daily Dagens Industri wrote on Friday that the companies are haggling over price: DaimlerChrysler has reportedly offered about $17 billion for the Swedish company's truck, bus, heavy equipment, marine, aviation and other divisions; Volvo is said to be holding out for $21 billion. Both companies declined comment.


  
  
  
  
  
 

VOLVO ADMITS PRICE FIXING Volvo’s British sales unit admitted last week that it conspired to fix car prices in Great Britain. The British Office of Fair Trading (OFT) said the government had evidence that dealers were forced to follow a set discount level; those falling out of line were denied bonuses. The probe covered the period between March 1995 and April 1996, before Volvo came to be a part of the Ford empire. Volvo said on Friday it has already taken steps to avoid further price-fixing.


  
  
  
  
 

INAKI SURFACES AGAIN Wacky former Volkswagen board member Jose Ignacio Lopez de Arriortua is at it again. Last week, the Detroit News detailed Inaki’s plans for four automobile models under his planned "Lora'' brand. In Madrid, Lopez said there would be a Pilar hatchback, a Begona seven-seat sport-utility vehicle, a Carmen sport sedan and a Lourdes convertible. Lopez plans to sell the Loras for $9,600 to $15,800 through department stores instead of dealerships but as of yet does not have financing or production capacity lined up for the vehicles. You might remember that Lopez, who resigned from VW in 1996, was investigated for corporate espionage when he left his job as GM’s purchasing czar at Opel in 1993.

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