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The Automotive News Week in Review - November 20, 2009

Benjamin Hunting
by Benjamin Hunting
November 20, 2009

There is no question that the Ford Crown Victoria Police Interceptor occupies a unique niche in the automotive market. Although the vehicle's platform, which dates back almost 30 years, has been deemed too archaic to remain a part of Ford's consumer lineup, it still represents a strong income stream in the form of fleet sales - particularly to police departments. It turns out that the Ford Crown Victoria's ancient body-on-frame design gives law enforcement the reliability and ease of repair they need from a vehicle that sees significant miles and abuse over the course of its service life.

All good things must come to an end, however, and every indication was given that when the Ford Crown Victoria rode off into the sunset in the near future, the company would no longer be in the position to accommodate police fleets. It was only after the announcement that General Motors, sensing an opportunity to leap back into a more significant law enforcement role, would release a fleet-only edition of its overseas market Chevrolet Caprice that decision-makers at Ford admitted that it too would produce a specialty police vehicle to replace its venerable warrior.

Slated for sale in 2011, details on the new Ford Police Interceptor are still vague, but it will follow a rear-wheel drive, V8 design along with many optional police upgrades including bullet-resistant door panels, heavy duty accessories and a fire suppression system. The company plans on the new Ford Police Interceptor helping it to maintain the nearly 75 percent market share it currently enjoys in terms of sales to police departments.

It seems that hardly a week has gone by this fall season without yet another sweeping recall being ordered by a beleaguered car company responding to a serious safety issue. Perhaps the only solace that automobile owners can take is that the blame has been spread around to so many different brands, making it hard for anyone to escape a dealership visit.

The latest vehicles to be affected by the recall bonanza include those manufactured by Jeep and Mitsubishi. Specifically, 161,000 Jeep Wranglers fitted with automatic transmissions are missing a system designed to monitor the temperature of transmission fluid, which could theoretically become hot enough to boil and eventually start a fire. Jeep's solution is to have those vehicles fitted with a warning chime and gauge that indicates overheated fluid, giving Wrangler owners the chance to park and wait things out. The recall is targeted at vehicles built in the 2007-2008 model years.

Mitsubishi's recall is slightly less dramatic, but could have equally hazardous effects on the health of drivers. 29,353 Mitsubishi Lancer and Lancer Evolutions built in 2008 and 2009 may have issues related to the corrosion of their front-impact sensors. The problem is restricted to vehicles which have been sold or are registered in the so-called 'rust belt,' that unfortunate grouping of states which deal with serious winter conditions involving the use of road salt. The sensors are sensitive to becoming coated with salt and water and then corroding to the point where they are no longer capable of properly deploying airbags in time. Mitsubishi is installing upgraded impact sensors on all affected vehicles.

In an announcement sure to warm the hearts of taxpayers, General Motors softened the blow related to news that the company had lost $1.15 billion in the third quarter of 2009 by simultaneously stating that it will start the repayment process associated with the government bailout it received earlier in the year. Total federal investment in GM has reach $50 billion, with the loans themselves representing $6.7 billion of that total.

While the company's reported losses might seem staggering, they are composed largely of payments related to restructuring costs and the cost Delphi's bankruptcy. The bright side of the equation is an almost $5 billion revenue increase compared to the second quarter of 2009, along with a surge in global sales numbers. GM's decision to begin making loan payments now is well ahead of the scheduled due date in 2015.

Continuously-variable automatic transmissions (CVTs) are an order of magnitude more expensive to repair than their traditional automatic cousins. This is due to the fact that the mechanical innards of these devices must replicate a theoretically infinite number of gear ratios, versus the simple four to seven found in most other autos.

Nissan is a brand which has been pushing the use of CVTs quite hard across almost its entire product lineup, and as a result it has recently made a fairly bold move to extend the warranties on all of its CVTs from five years / 60,000 miles to ten years / 120,000 miles. Not only that, but the company will actually reimburse any current Nissan owner for their documented repair expenses related to any CVT work performed out of warranty and prior to the extension. This act of good will should not only generate positive vibes for Nissan amongst its existing customer base, but it will most likely also encourage more than a few potential buyers to take a chance on a continuously-variable transmission in a future Nissan purchase.

Hummer's sales are currently experiencing the full extent of the anti-SUV backlash, with 64 percent fewer vehicles sold thus far in 2009 compared to 2008. That hasn't discouraged the off-road brand's new ownership group, Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd. from forging ahead with plans to flesh out the current Hummer lineup with some fresh blood. The company hopes to more than triple sales in 2010 with the addition of a more compact, two-door H4 model intended to appeal to lone wolf outdoor adventure types currently served by the Jeep Wrangler, and another smaller model dubbed the H5, which would be positioned as the company's fuel saver.


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