Feature Story

UPDATE 14: SIX-WEEKS OF AUTO DOINGS

by Bob Hagin

June 26, 1998

Six weeks isn't really such a long time, but lots of things can happen in the auto world during that period. So when recap time rolls around in the scheduling of my columns, I look forward seeing what's up in the auto world. Here are some news items that grabbed my attention this time:

EVERYBODY WANTS TO GET INTO THE ACT - There are several other sides to the Budget Group, Inc. Besides renting you a late-model car when you land at your destination airport, for several years the company has operated used car dealerships under the Budget Car Sales banner. They provide retail outlets for vehicles that come out of its rental fleet after their rental life is over. Now the company has bought some new car dealerships in Florida and Indiana. The purpose is ostensibly to streamline and save money by combining management roles and to provide better access to fleet purchases from Ford and Chrysler, as those are the featured marques at the dealerships Budget has bought. Budget seems to be following the national trend of nationwide conglomerates gobbling up many family-owned new car dealerships and operating them as one big operation.

COMPROMISE BETWEEN TOYOTA AND FORD - A new full-sized pickup truck was introduced at the Chicago auto show earlier this year. It was big, V-8 powered and carried the label "T150." If that sounds to you like it might be a new version of a pickup wearing a Blue Oval on the hood, Ford thought so too, since its own venerated F-150 pickup has worn the moniker for several decades. Needless to say, this similarity upset the pubahs at Ford, who immediately sent emissaries to the Toyota headquarters in Torrance, CA to register a complaint. Without threats of legal saber-rattling, Toyota was persuaded to drop the T150 label for its newest "personal" hauler and to begin a quick search for a new name. Time is tight: the now-nameless pickup is due in showrooms in the Spring of '99 - just in time for the NASCAR Craftsman pickup truck racing season. Then Toyota can really go at it with Ford as well as Chevrolet and Dodge - in the pickup arena. We'll keep you posted on this one.

INDIAN AUTO INDUSTRY IN NUCLEAR SOUP - In 1990, India was a prime market for the auto industry: a middle-class that was estimated at 350 million, most with rising incomes. Foreign automakers lined up to go into joint ventures with Indian manufacturers and spent lots of money to gear up. But it didn't work out quite as expected and the auto makers found that Indians were more canny buyers than they thought. Then just as the conglomerates began to restructure their vehicle mixes to appeal to more buyers, the government dropped a bomb - literally. Last month it exploded an atom bomb that not only got the attention of arch-enemy Pakistan, but of the U.S. and other governments as well. Our laws say that a country that contributes to nuclear arms proliferation must face trade and business embargoes and Ford and General Motors are both involved with Indian partners. India and the U.S. have enjoyed a congenial business atmosphere - until now.

G.M. ON LINE AGAIN WITH CHINA - On the other hand, General Motors has apparently ironed out its production troubles with the its Chinese partner FAW-Jinbie. The joint-venture factory stopped production some time ago on the production of S-10 pickups when it was belatedly learned that Chinese customers were willing to buy, but the great majority would only go for a four-seater crew-cab version. A single bench seat that could only accommodate three up front (and only in a pinch at that) wasn't in the cards. The total Chinese/American investment involved almost $250 million and the assembly of the trucks in the Shenyang plant has been shut down since 1995. The switch-over will begin immediately and lead to the production of other G.M. products.

SPORT/UTILITY VEHICLES IN THE DOG HOUSE - Their drivers are rude, they pollute too much, they destroy low-slung sedans they crash into and they have a propensity to roll over. At least that's what critics say about our beloved sport/utility vehicles. The popular press is rife with horror stories of the inherent evils of the popular four-wheel-drivers and the National Highway Traffic Safety Administration is trying to legislate "something" to come to grips with the brouhaha. Now these not-so gentle giants are being beaten up by environmentalists over the additional pollution that they put out since SUV's are officially designated as trucks and not subject to the same pollution laws as passenger cars. The Greens even have several internet sites (www.suv.org among others) to spread the gospel to potential buyers.

MERCEDES DRIVE-THROUGH SERVICE - It isn't as fast a McDonald's or Jiffy Lube, but Mercedes-Benz has opened three of its proposed string of stand-alone routine service shops. They're small (six or seven stalls) and don't do anything other than the "quicky" stuff. The reason is simple: Mercedes wants owners to stay loyal to the company after their warranties have expired but many owners switch to independent shops because the feel that dealership prices for simple services are too high. These new shops are located some distance from dealerships, and if serious problems are noted, the owner is directed to the "home" dealership. It appears that this could be a service wave of the future.

Things happen fast in the car business. Check back with us in six weeks and we'll tell you more.