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GM Investigates New Aveo Crashes

DETROIT February 19, 2004; John Porretto writing for the AP reported that five crashes involving the new Chevrolet Aveo prompted General Motors Corp. to temporarily instruct dealers not to sell the cars, but the automaker said Thursday it has determined the car did not cause the wrecks.

GM spokesman Jim Schell, who handles recall and product-safety communications, said the company issued a "stop delivery" notice to dealers late last week but lifted the selling ban Thursday following an internal investigation.

"The crashes captured the attention of General Motors because there were five crashes in a new product," he said. "We halted the delivery to avoid inconveniencing customers. An examination of the circumstances of the crashes and the vehicle involved indicated no vehicle condition was a contributing factor."

GM declined to provide any details about the accidents, other than to say they resulted in injuries but no fatalities.

The Aveo has been on sale in North America for only a few months. GM reported 1,559 Aveo sales in the United States in January.

With a starting price of $10,000, Aveo is designed to give GM a player in a highly competitive segment that includes the Hyundai Accent, Kia Rio and Toyota Echo. Auto executives and analysts say low-priced offerings are important because they often are a consumer's first experience with an automaker.

The Aveo, available as a four-door or five-door sedan, is built overseas by a joint venture called GM Daewoo Automotive & Technology Co., whose investors include Japan's Suzuki Motor Corp.

GM had said it expects to sell between 50,000 and 70,000 Aveos annually, which would place it near the top of the segment with the Accent and Rio.

"The Aveo is really a no-brainer for GM, assuming they can launch it," said Mike Wall, an analyst with the forecasting firm CSM Worldwide. "This is ideally what Daewoo was meant to assist with -- smaller, lower-cost offerings."

GM, the world's largest automaker, has had three recalls this month involving more than 2.5 million vehicles.