Week of May 10, 1999

May 10, 1999







CAR SALES STAY HOT IN APRIL The latest showroom numbers have car industry sales as a whole up, car sales by 4.4 percent and truck sales by 4.0 percent. Among the big winners:

Ford, which saw its sales climb 7 percent. Reporting Volvo sales for the first time along with its car and truck brands, Ford's car sales jumped 5 percent to 141,311 and trucks rose 8 percent to 204,361;

Honda, which has set a new monthly sales record each month of this year. CR-V sales are up 41 percent over last year, and Odyssey sales more than tripled over the old version to 4,246 in April;

DaimlerChrysler cars. DC sales rose 1.8 percent in the month of April, but sales of the LH lineup of cars -- LHS, Concorde, Intrepid and 300M -- rose 47 percent;

Toyota’s sales rose 9.6 percent to 118,833, egged on by a 21 percent increase in Camry sales. But sales at Lexus soared 24 percent to 15,362, sparked by a nearly 80-percent increase in sales of the RX300.

Volkswagen charted its best April sales since 1980, rising 30 percent over last year to 26,626, 10,948 of which were its new Jetta sedan.

GM sales rose three percent in the first quarter, but in April its cars slid back 4.5 percent and trucks fell 3.9 percent.




CADDY ADMITS TO FUDGING SALES NUMBERS In an embarrassing public announcement, General Motors admitted Wednesday that it miscalculated December sales for Cadillac by 4,773 units -- a margin that seemed to give Cadillac last year's luxury-car sales crown. In January, Cadillac announced it has retained the luxury-car title, which it had held for 48 years by a slim margin of 222 units. An internal audit this year revealed that Cadillac had shifted expected sales from 1999 to December of 1998 to keep the crown from Lincoln, riding high on sales of its Navigator sport-ute. The revised totals for 1998: Lincoln 187,121, Cadillac 182,570. GM issued an apology to Ford and says it will discipline those involved in the overzealous reporting.





HONDA PLANS ALABAMA PLANT Honda Motor Co., the fifth-largest automaker in the U.S., announced last week that it will become the second automaker to build an assembly plant in Alabama. The Honda plant follows the Mercedes-Benz M-Class assembly facility in the state. Honda plans a manufacturing and assembly plant near Lincoln, about 40 miles to the east of Birmingham, where sport-utility vehicles or the Odyssey minivan will be produced, along with 3.0-liter V-6 engines. Honda expects to employ between 1200 and 1800 workers, and to begin producing about 100,000 vehicles annually in 2001. It's expected that the plant will build a new SUV off the Odyssey platform for Acura, as well as some Honda Odysseys.





GM MOVES FORWARD IN LANSING General Motors pushed ahead with plans to build an all-new plant for rear-drive luxury cars last week when its board of directors gave conditional support to the plan. The GM board gave an amber light to the 2000-worker plant, to be located on an Oldsmobile site in Lansing, for the assembly of the replacement for the Cadillac Catera and a possible all-activity vehicle for Cadillac and Buick. The plant would begin producing vehicles in 2001. The plant would be the first new GM facility in Michigan since Cadillac's Hamtramck plant, which builds the Seville, broke ground in 1982. GM spokespeople say the plant's final approval is contingent on work agreements with the UAW.

For more on the brewing Cadillac plant, click here





FORD FACES $4 BILLION SUIT Ford says it will face one of the largest class-action lawsuits ever later this month as it goes to trial in a $4 billion lawsuit. Some three million plaintiffs in California are suing Ford for alleged faulty ignition modules in 1.7 million 1983-95 cars and trucks that could cause the vehicles to stall. Ford spokesman Jim Cain told Reuters the $4 billion figure represented the estimated damages that Ford could face if it lost on all counts. Federal safety regulators have conducted three preliminary investigations into stalling complaints, Ford said. Each time, the agency found no conclusive safety defect and closed the investigations without taking action.





SPORT-UTES GET GORED Vice President Al Gore is pushing automakers to make sport-utility vehicles three times more fuel-efficient, the AP reports. Gore's plan would expand to sport-utility vehicles a joint venture by U.S. automakers and the government to design super-mileage cars. Gore hopes to make SUVs achieve 60 mpg. That goal would dramatically alter a venture originally designed only for cars. The addition of SUVs to a far-reaching "supercar" partnership for 80-mpg cars between carmakers and the government comes only days after President Clinton announced tough new tailpipe standards that require trucks and sport-utility vehicles to emit no more pollution than cars by 2007.




SEERGY LEAVES NISSAN Nissan North America says Mike Seergy, vice president and general manager of Nissan division, will resign to pursue other opportunities, joining the wave of changes at Nissan that crested last week with the appointment of a new president. Seergy had been vice president and general manager of the Nissan division for the United States, Canada and Mexico since February 1998. He joined the Japanese automaker’s Infiniti luxury division in April 1990, and held several positions before he took over Nissan operations. Seergy, who lives in New York, is said to be considering a career on Wall Street as an auto analyst.





J.D. POWER GIVES TOYOTA, GM KUDOS Cars significantly outpace light trucks in initial quality despite a growing customer trend of replacing cars with light trucks, according to the J.D. Power and Associates 1999 Initial Quality Study 2(SM) (IQS2) released last week. "Many new light-truck owners expect to experience car-like quality in heir new vehicles, specifically in the SUV segment," said Jacques daCosta, senior manager of product research at J.D. Power and Associates. "The challenge for vehicle manufacturers is to take lessons learned in car quality and apply them to light trucks as more and more car owners migrate to light trucks." After stalling for two years, initial vehicle quality within the automotive industry improved this year by 5 percent compared to 1998 study results. The top cars and trucks, by segment:

Car Segments

Compact Car
Best: Toyota Corolla
Saturn SW Wagon
Nissan Sentra

Entry Midsize Car
Best: Nissan Altima
Plymouth Breeze
Dodge Stratus

Premium Midsize Car
Best: Chevrolet Lumina
Buick LeSabre
Buick Century

Sporty Car*
Best: Acura Integra
Honda Prelude
Mazda Miata

Entry Luxury Car
Best: Infiniti I 30
Saab 9-5
Mercedes-Benz C-Class

Premium Luxury Car*
Best: Lexus LS 400
Acura RL
Mercedes-Benz S-Class

Sports Car
Best: Mercedes-Benz SLK
Chevrolet Corvette
Porsche Boxster

Truck Segments

Compact Pickup
Best: Dodge Dakota
Mazda B-Series
Ford Ranger

Full-Size Pickup
Best: Ford F-Series Light Duty
Dodge Ram Pickup
Ford F-250 Super Duty

Mini Sport Utility Vehicle
Best: Honda CR-V
Subaru Forester
Toyota RAV4

Compact Sport Utility Vehicle
Best: Toyota 4Runner
Dodge Durango
Ford Explorer

Full-Size Sport Utility Vehicle
Best: Toyota Land Cruiser
Chevrolet Tahoe
Ford Expedition

Luxury Sport Utility Vehicle
Best: Lexus LX 470
Infiniti QX4
Lexus RX 300

Compact Van
Best: Toyota Sienna
Chrysler Town & Country
Plymouth Voyager



FORD NAMES SUPERCREW Ford's full-size, four-door pickup truck has a name -- SuperCrew. The name, given to the truck shown at this year's Detroit auto show, denotes the full-size F150 with a pickup bed and the interior room of the Ford Expedition SUV. The new F150 SuperCrew will be the same overall length as Ford's current F150 SuperCab -- 225.9 inches, or about 19 feet -- but with its expanded cabin and shortened 5.5-foot bed, it will hold six adults. The SuperCrew enters production a few months after another new version of the Ford pickup -- the Explorer Sport Trac, which mates a 4.5-foot pickup bed to the Explorer's cabin. The Sport Trac comes to life in the spring of 2000; the SuperCrew, to be built at Ford's Kansas City assembly plant, will be available in mid-2000 as a 2001 model.




FORD RECALLING EXPEDITIONS, NAVIGATORS Ford Motor Co. is recalling about 57,200 of its 1999 Expeditions and Navigators because of a problem that could cause the wheels to fall off, the company said last week in a statement. "We're aware of one accident with two minor injuries," Ford spokeswoman Karen Shaughnessy told Reuters on Tuesday. The recall of the two sport-utility vehicles affects models with optional 17-inch chrome-finished steel wheels. Ford said some wheels might not have enough contact with the hub, which could cause vibration or result in the wheel and tire falling off. Dealers will tighten the wheels and install a label with tightening instructions on each wheel at no expense to owners.



FORD TO REVAMP ROUGE Ford will begin an "environmental and aesthetic revitalization" of its Rouge River manufacturing complex, chairman William Clay Ford Jr. told reporters on Monday. The Ford plan will refurbish many buildings on the 1100-acre site, razing some and incorporating public areas, including a revitalized waterfront.

The project will include a full environmental assessment of the site; removal of buildings and equipment no longer in use; waterfront restoration; greater public access to historically significant areas; and new green areas around the complex. The Rouge complex, once an 80,000-person facility, now employs 8000 workers and production of the Ford Mustang. In February, an explosion at Rouge killed six workers.




GM A GO IN BRAZIL Officials from Brazil's Rio Grande do Sul state and General Motors say they've reached an agreement for GM to open an assembly plant now under construction in the state. A month ago, the state government announced it would suspend $519 million in loans and incentives to GM and Ford to build factories. With Brazil stil reeling from financial crisis, a new government canceled the agreement. Last week Ford canceled its plans to build in the state and said it would look elsewhere in the country. GM says has reached an agreement with the state to continue construction of the plant, which will now open six months late in mid-2000, rather than the end of this year.




VW SUED FOR WWII CHILD DEATHS Lawyers claiming to represent Russian and Polish slave laborers during World War II filed a class-action lawsuit Wednesday against German automaker Volkswagen, seeking reparations for the deaths of up to 400

Children, the AP reports. The lawsuit says that children of forced slave laborers at the company's auto plants died from malnutrition and poor treatment. The lawsuit, filed in U.S. District Court in Milwaukee, accuses the company of genocide and war crimes. Volkswagen AG responded by reissuing a statement first released in November after CBS News aired a report on the nursery. The children's death at the nursery "is a tragic chapter from one of the darkest times of modern history," the statement said. "The widespread practice of forcing infants and children to be taken from their mothers and placed in special children's homes throughout Germany was another manifestation of the inhumanity of the Third Reich in World War II," it said.




TEEN PARKING SPOT CAUSES FLAK Srinu Yeshwant got his wish when he got a truck to drive to high school. But when the school's renovations cut down on parking, his parents came up with a novel solution so Srinu wouldn't have to rise early to fight for a parking spot for said truck. They simply bought him a house next to his high school in Barrington, Ill. The AP reports Yeshwant uses the $180,000 house's driveway to park his car next to school so he won't have to wake up at 6 a.m. to find a spot before the school's first bell at 7:25 a.m. The Yeshwants live in nearby South Barrington. "I don't like getting up at 6 a.m.," said Yeshwant, 17. No one lives at the driveway - er, house - about 30 miles from downtown Chicago: Srinu and five of his friends simply use the driveway to park their cars, avoiding the early trek.

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