Feature Story

UPDATE 16: NEW NAMES, LEADERS AND RESURRECTIONS

by Bob Hagin

November 21, 1998

No one has ever accused the automobile industry of being placid or staid. Maybe that's why I've enjoyed it for so many years - it's so dynamic. As usual, we've been watching the industry for the past six weeks and have come up with a half-dozen or so items that are of interest to us:

AAMA SAYS GOODBYE - Nearly 100 years ago, American auto makers joined together to form an association "...for the common good," and they called it the Motor Vehicle Manufacturer's Association (MVMA) of the United States. As the industry shook itself out over the years, it got to the point where is was, in reality, the Big Three Club and was more or less the exclusive bailiwick of Ford, Chrysler and General Motors. Its purpose was to set industry-wide corporate policy and present a united front to the U.S. government and its people. All the vehicles represented were manufactured in North America and it was a cozy group. But then Honda began making cars here and became a "domestic" brand, which qualified it for membership. Eventually, this rubbed somebody the wrong way, and Honda was booted out of the organization in '92. The club then became the American Automobile Manufacturer's Association (AAMA). It was the right crowd with no crowding. But as we all know, Daimler and Chrysler are now one, and Daimler is on top, so the membership rules had to change. A new group is being formed and it will open its doors to those former "undesirables" like Volkswagen, Toyota and Volvo. The new name of this multi-national group hasn't been settled yet, and while most of the overseas brands are expected to sign up, only Honda has turned up its corporate nose. The company must still be smarting from being shouldered out of the club a half-dozen years ago.

DC NEW AUTOMOTIVE ACRONYM - Well, that's not exactly right either, but the auto world is going to have to get used to those initials. They stand for DaimlerChrysler, of course, the company formed by the merger of those two manufacturing giants. The amalgamation is now complete and the hierarchy of the two firms are still figuring out who will be reporting to whom, but it looks like the language of choice is German. Daimler officials state that they want to have a low-end presence in Europe (like putting at least one Neon in every European garage), while Chrysler admits that its products can use a dose of Daimler quality control. For now, DaimlerChrysler will be a corporate holding company, according to reports, but that may soon change. Reports are that a number of Chrysler executives are moving to Stuttgart at the beginning of '99. To cure the acronym problem, some auto journalists have suggested that since some G.M. (General Motors) trucks are affectionately known as a "Jimmy," perhaps the same colloquial familiarity can be used and a DC product could be called a "Dickey."

LINCOLN LUXURY LEADER - It hasn't happened since the late '30s but it just may be that Lincoln will ace out Cadillac in sales for '98 as the best selling luxury brand in the U.S. The final numbers aren't in yet, but in September, Lincoln outsold its cross-town rival by almost 10,000 units. Ford's big-ticket marque made an end-run when it put its Navigator label on an upscale version of the Explorer to cash in on the carriage-trade end of the sport/utility vehicle market. Cadillac has recently begun playing catch-up by putting its own Escalade logo on a fancy version of the Chevrolet Tahoe/GMC Yukon but it's too late for this year. Technically, both the Navigator and the Escalade are trucks, but then so is the Lexus LX 470, Infiniti QX4, Mercedes-Benz ML430 and Range Rover. And they all look good in the country club parking lot. Parenthetically, both Lincoln and Cadillac were runners-up in sales to Packard before World War II.

HYUNDAI A WINNER OR LOSER WITH KIA - Neither Hyundai nor Kia are smashing sales figures in the U.S., and now that Hyundai has bought out its Korean rival, it has a sales problem to face: the companies have vehicles that overlap and are in direct competition here. The only ace- in-the-hole that Kia had was its cute little Sportage sport/utility vehicle but now that Hyundai is coming out with its own SUV, that advantage will disappear. Hyundai beat out Ford in an auction bidding for the heavily-debted Kia company and has to figure out how to paying off the staggering corporate debt that finally pushed Kia to the brink of bankruptcy.

ANOTHER BRIT RESURRECTED - A while back we commented that San Francisco's Qvale family is reintroducing the De Tomaso name on an all-new Ford-based high-ticket sports car that is undergoing testing as we speak. Kjell Qvale pioneered British cars in this country in the late '40s through his San Francisco-based company and at one time rescued the undercapitalized Jensen Car Company, only to have it fold a few years later. Now the British consortium that acquired the name a couple of years ago is going on line with its own Ford-based specialized sports tourer that will be known as the Jensen-Healey. If this retro-car trend keeps up, perhaps Lincoln and Cadillac will again have to contend with Packard in the luxury car field.

Keep your eyes glued to these pages and in another couple of months we'll bring you more tidbits from the ever-changing world of automobiles.