NHTSA Launches Probe into Jeep Grand Cherokee Fires

Automotive News reported on Tuesday that federal regulators have launched a probe to investigate a possible fuel tank issue with 1993 to 2004 Jeep Grand Cherokees. The National Highway Traffic Safety Administration is attempting to determine if more than a dozen post-crash fires involving the vehicles are the result of faulty placement of the SUV’s fuel cell. Any problem has the potential to impact more than three million cars currently on the road.

Preliminary information released on Tuesday by the NHTSA suggested that at least 13 deaths in 10 separate crashes were “most likely associated with the alleged defect” in the Grand Cherokees. However, the NHTSA stopped short of blaming the fuel cell’s placement for the fires, stating that the accidents and fires did not necessarily “establish a defect trend” and that a review of early warning data did not find the subject vehicles to be over-represented for post-crash fires.”

The nonprofit Center for Auto Safety petitioned the NHTSA to investigate the fuel tanks in the Grand Cherokee, which they say are improperly positioned to absorb an impact and are known to tear off during crashes. Jeep’s parent company Chrysler Group said it is cooperating with the NHTSA investigation but remained confident that “that a study which considered all factors in all collisions — including rear collisions with fire — would show that the 1993-2004 Jeep Grand Cherokees perform as well as or better than other vehicles in their class.”

Chrysler’s Fiat-Based Sedans Might Hit U.S. in 2011

AutoWeek reports that Chrysler’s Fiat-based compact cars could be coming to America sooner than anticipated. During a conference call on Monday, Chrysler Group CEO Sergio Marchionne said that the cars could potentially be on the market as early as the fourth quarter of 2011. Previous predictions had placed the cars as not being available in the United States until early 2012.

“We’ve run extensive clinics on the first vehicles. We’re 98 percent there on styling,” he said. “My expectation today is we’ll be able to get this car into the market Q4 2011. We continue to work pretty aggressively on timing.”

The Fiat-based cars would help Chrysler become competitive in an area of weakness for it in the American car market: the compact sedan. Marchionne also said that Chrysler Group is planning on addressing one of its other pressing needs before the launch of the Fiat-based compact. According to him, by the end of 2010 Chrysler plans to come out with new versions of its Chrysler Sebring and Dodge Avenger lines.

“We have carried out significant surgery on the architecture of those cars and made significant improvements of the interiors,” he said.

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Ford and GM See Sales Increases in March

Despite what analysts are calling a “rough market” for cars, both GM and Ford showed significant improvements in U.S. sales last month, according to figures calculated by Automotive News. GM’s sales were up 21 percent over the previous month, while Ford saw sales climb by 40 percent.

However, the news wasn’t rosy for all domestic car makers. After posting its first monthly gain in four years in February, Chrysler saw sales dip eight percent last month. Some foreign car makers also saw disappointing numbers despite sales growth. For example, sales of new Hyundais were up 15 percent from the previous month, a number that was far below analysts’ previous estimates of 30 percent growth.

Many of the sales increases were attributed to car dealers being forced to match incentive offers introduced by Toyota in March as a counter measure to the wave of negative press about the company’s global vehicle recalls.

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Protesters Interrupt Speech By Chrysler CEO

The Detroit Free News reports that angry protesters interrupted a speech by Chrysler CEO Sergio Marchionne during the Automotive News World Congress dinner celebration in Detroit on Wednesday night, releasing balloons and passing out fliers critical of the company’s recent handling of labor issues.

The fliers pointed people to www.carbuyersbeware.com, which is a site that protests Fiat’s purchase of Chrysler. One protestor, who identified himself as a member of the Teamster’s strategic campaign division, said that he was protesting the company’s decision to start using nonunionized car haulers, saving the company $10 per car.

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Car Dealers Slated to Close Reject Appeals Process

General Motors and Chrysler offered on Thursday to reconsider closing more than 3,000 car dealerships after pressure from Congress, but according to the Detroit Free-Press, car dealers called the announced plan little more than window dressing.

The auto manufacturers would allow dealers whose stores are slated for closing to appeal their case to an independent panel, which would hear why the dealership decided to reject particular dealerships. However, dealers such as Jeffrey Tamaroff, who was forced to close his family’s Southfield Dodge dealership, say the move will do little to help.

“I want to throw up,” said Tamaroff. “They want us to sit in front of a review panel, all of whom will be sitting there with folded arms waiting for us to finish, then they will say ‘Next.’ It is really cruel.”

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Auto leasing programs on the comeback

Bloomberg reports that auto leasing programs are starting over again as consumers are beginning to look for cheap ways to drive expensive cars. The story reports that both General Motors and Chrysler have restarted their previously-discontinued GMAC Financial Services leasing program, which had been stopped after demand for leasing fell in 2008. In addition, Ford and Toyota are both planning extended marketing pushes and promotions for their existing marketing programs.

“Leasing is really a critical piece of the business because people who lease have much higher loyalty to your brand,” Jim Farley, Ford’s group vice president of marketing, said in an interview. “This is something the dealers have been asking for for a long time.”

“Leasing is coming back,” Jeremy Anwyl, chief executive officer of researcher Edmunds.com of Santa Monica, California, said in an interview yesterday. He predicts the practice will soon account for 20 percent of U.S. auto sales, more than doubling from the first half of 2009. Increased used-car values are “making leasing more attractive,” he said.

Auto supplier consolidation seen in 2010

According to Reuters, panelists at the Reuters Auto Summit in Detroit this week agreed that the excess capacity seen by the major auto suppliers will lead to increased consolidation within the market in 2010.

“There are too many suppliers,” Earl Hesterberg, chief executive of auto retailer Group One said at the summit. “The longer this market stays at 10, 11 even 12 million units, it will put financial pressure on suppliers and drive consolidation.”

Panelists also agreed that the U.S. Government stopped a possible “tsunami” by providing government-assisted bankruptcy protection for General Motors and Chrysler. However, industry experts predict that companies that have been barely able to stay afloat in 2009 might be unable to sustain themselves in 2010 and become targets for consolidation.

Chrylser CEO hopes for profitability by 2011

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As part of a day-long presentation designed to announce the company’s turnaround plan, Chrysler Group LLC CEO Sergio Marchionne said that the company hopes to return to profitability by 2011 and pay back the billions of dollars in loans received from the U.S. Government as part of its bailout plan.

“Today is the first day of a new Chrysler. We have laid out our plans and we have become publicly accountable for the delivery,” said Marchionne.

According to the company’s own projections, Chrysler is looking to make yearly revenue gains of 20% starting this year, leading to the company breaking even in 2011. Some industry analysts question if Chrysler will meet these lofty goals since the company does not have any new models planned to be released within the next year.