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Monday, January 20, 2003 |
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| SIGNIFICANT NEWS |
A Compendium of News for Fleet Managers from
January 13 -- 17, 2003 |
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| 1) |
Michelin Develops Radio Frequency Tire Identification Technology |
11) |
Crash-Scene Research Network Links Hospitals For Detailed Analysis Of Injury Patterns, Safety Issues |
| 2) |
Detroit Challenged By Rush Of New Import Pickups |
12) |
US EPA Unlikely To Approve NY Request For Exemption To Reformulated Gasoline Mandates |
| 3) |
Nissan Tops Wavemakers In New Products, Stock Gain |
13) |
ChevronTexaco Begins Phase-out of Toxic MTBE Gasoline Additive In California |
| 4) |
Beware of SUVs, Dr. Runge Warns - NHTSA Chief 'Astounded' By 2001 Rollovers |
14) |
OPEC To Raise Oil Production But Excess Capacity Insufficient To Cover Venezuela's Shortfall |
| 5) |
SUV Safe if Seatbelts Used, Automakers Tell NHTSA Chief |
15) |
US Oil Stocks Near Lower Operational Limit - Price Hits $33 Barrel |
| 6) |
FCC Cites Body Shop For Telemarketing Violations |
16) |
California Headed for Price Spikes As Switch To Summer Gasoline Blends Complicated By Ethanol Addition |
| 7) |
Vicarious Liability Laws May Force GMAC Out of NY, CT And RI |
17) |
Rosy Auto Picture Painted by Bill Ford, Battenbert, But Analysts Raise Doubts |
| 8) |
Used Car Industry Continues To Face Challenges - Analysts Upbeat, But War Threat, Consumer Confidence Still Concerns |
18) |
"Golden Age" Dawns for Auto Industry, Lutz Proclaims |
| 9) |
Honda Tries to Reinvent Itself as Safety Leader |
19) |
Dealerships May Still Be A Man's World, But The Scarce Women Owners Are Successful |
| 10) |
Safety Advocates Concerned About High-Tech Devices In Vehicles, Seek Government Regulation |
20) |
Economy Show Signs of Recovery, But Auto Sales will be Down or Flat |
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| 1) Michelin Develops Radio Frequency Tire Identification Technology |
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Situation
- Michelin developed radio frequency identification transponder in tire that stores vital information
- Tire ID number can now be associated with VIN making tires uniquely identifiable
- Stores data such as when and where made, maximum inflation pressure, tire size, etc.
- Consists of antenna and integrated circuit with higher data capacity than bar code
Significant Points
- RFID technology most likely to be introduced through OEM market
- Could soon be feasible for replacement tires as well
- In future, electronics in tires will be able to communicate tire pressure, etc. to vehicle’s computers
- At least one OEM working with Michelin to bring RFID to market as option in model year 2005
Web Source
Sourced from: Collision Week, January 15, 2003
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| 2) Detroit Challenged By Rush Of New Import Pickups |
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Situation
- First it was cars, then SUVs, US automakers must stem rush of competitors for pickup trucks
- US automakers find themselves distracted by rash of overseas competitors
- Nissan pulls cloak off its full-size pickup this month; Toyota 1st import to enter segment in 1998
- Imports' reputation for quality, durability may help defuse loyalty of buy American customers
- Import nameplates will make additional inroads w/ appearance buyers
- US automakers adding pizzazz to traditional light trucks; more power, amenities, technology
Significant Points
- Market share eroded by imports, 1st in cars, then in SUVs
- In near-term, observers assert, overall threat from imports is small, but growing
- Imports have grabbed 1/2 of the 6% growth in truck and SUV segments since mid-1990s
- Much of recent growth in truck sales comes from import dominated crossovers
- Ad spending on trucks has dropped, just like in most categories
- US automakers increased ad spending on trucks this past fall
Web Source
Sourced from: Brand Week, January 6, 2003, page 20
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| 3) Nissan Tops Wavemakers In New Products, Stock Gain |
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Situation
- Carlos Ghosn reaps accolades for bevy of new Nissan and Infiniti products
- Praise heaped on Nissan Motor CEO by GM vice-chair and product czar Robert A. Lutz -- who forecast doom when Renault took on Nissan albatross 3 years ago
- Lutz: "I was wrong. Ghosn is a helluva car guy"
- Show-stealer Nissan surprises Detroit with fullsize Titan pickup -- plus restyled Maxima and Altima, Quest minivan, 350Z sportster, prize-winning Infiniti G35 sedan and coupe
- Bold lines on new models, including innovations and high-powered V-6 on Titan, remind GM styling exec Anne Asenzio of Renault's daring moves in mid-1990s
- Still coming: SUV spinoff of Titan, to be unveiled at Chicago show next month
Significant Points
- Segment once 'owned' by Detroit now drawing serious competition from Japan, as Nissan joins Toyota in 2003 and Honda will add midsize pickup in 2005
- Ironically, Titan designed by several ace Ford stylists who jumped over to Nissan studio in Farmington Hills, MI in late 1990s
- Ford defectors brought Titan bucket seats front and rear, doors that swing back flush to body, raked A-pillar for aero profile
- Fullsize bed, 9,400-lb towability forcing Toyota to enlarge Tundra for 2004 from midsize to fullsize
- Nissan keeping pace on car side, as formerly plain-jane Quest, flagship Maxima, Infiniti G35 inherit snazzy style cues
- Investors couldn't be happier, Nissan stock jumping 102% since 1999, 49% since 2001
Web Source
Sourced from: Automotive News, January 13, 2003, Pages 1, 47
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| 4) Beware of SUVs, Dr. Runge Warns - NHTSA Chief 'Astounded' By 2001 Rollovers |
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Situation
- Dr. Jeffrey W. Runge, NHTSA administrator, issues blunt SUV warning at World Congress
- If SUV safety not strengthened and more head-protecting airbags installed, NHTSA could mandate changes
- Emergency-room physician Runge quotes 2001 data as "astounding" -- rollovers account for 3% of all vehicle accidents, 1/3 of all fatalities
- Single-vehicle flipovers caused 8,400 of 42,116 highway crash deaths, mostly from SUVs, pickups
- Runge calls rollover prevention, occupant retention key to "greatest safety benefits"
- GM says it would like to equip all vehicles w/ head airbags (Saturn L-series, Cadillac CTS now have) but balks until competitors go along -- Ford opposes NHTSA mandate
Significant Points
- Automakers worldwide working on rollover sensing technologies, side curtains (head bags)
- Vehicle compatibility also being addressed to prevent override collisions
- Runge lighting firestorm certain to sweep industry
Web Source
Sourced from: Wall Street Journal, January 12, 2003, Page A1
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| 5) SUV Safe if Seatbelts Used, Automakers Tell NHTSA Chief |
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Situation
- SUV safety defended by automakers after NHTSA Chief Dr Jeffrey Runge's indictment
- Fatality bulge in SUV rollovers could be slashed if drivers wore seatbelts, say defenders
- GM declares NHTSA data show SUVs 2-3 times more protective of occupants in crashes
- Crashes account to 97.5% of SUV injuries, deaths, far outnumbering overturns
- Ford reminds SUV drivers not to expect handling like cars
- Anti-SUV crusade could be fanned by Runge's outcry, leading to picketing at future shows or NADA convention Feb 1-4 in San Francisco
Significant Points
- Runge's call to arms at World Congress, of all places, hits automakers in solar plexus
- SUVs among biggest profit producers and among most thronged attractions in Detroit, LA and Miami shows
- Market watchers think full-size and midsize entries could slow down if hubbub from protest crowd persists
- What also could resonate is advisory by former emergency-room physician Runge that inexperienced or teenage drivers not operate SUVs
Web Source
Sourced from: Detroit Free Press, January 16, 2003, Page 1B
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| 6) FCC Cites Body Shop For Telemarketing Violations |
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Situation
- FCC released report for 4th quarter citations issued for violations of telemarketing practices
- Violations issued to 13 companies, including Accurate Collision Repair Inc., an Ohio collision repairer
- Most violations involved charges of placing unsolicited commercial prerecorded messages to residences
- Others included violations of do-not-call requests or fax solicitation rules
Significant Points
- While no fines were disclosed, FCC can impose fines up to $11,000 for each violation
Web Source
Sourced from: Collision Week, January 14, 2003
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| 7) Vicarious Liability Laws May Force GMAC Out of NY, CT And RI |
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Situation
- GMAC to quit buying leases in NY, CT and RI later this year unless vicarious liability laws changed
- GMAC hiked acquisition fees by $405 in those states, effective Mar 1 — cost passed to consumers
- Leasing companies liable for damages in accident since its name is on title
- GMAC and Ford Motor credit offering balloon notes — similar to leases, but customer’s name on title
Significant Points
- Laws unlikely to change since leasing companies have been lobbying against for at least a decade
- Vicarious liability lawsuits are bigger and more frequent, insurance against it expensive or unavailable
- Hundreds of lawsuits have piled up in past 3 years alone, representing $1.6B+ in potential damages
- Captive finance companies and banks formed Vicarious Liability Coalition in response to $28M judgment
Web Source
Sourced from: Automotive News, January 15, 2003
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| 8) Used Car Industry Continues To Face Challenges - Analysts Upbeat, But War Threat, Consumer Confidence Still Concerns |
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Situation
- Industry experts agree that aggressive incentives for new and certified used cars will continue in 2003
- Overall, experts concerned about general economy and how it will affect dealers
- Analysts optimistic for economic recovery as leading indicators look hopeful
- But uncertainty of Iraq war and fuel prices could dampen consumer confidence
- ADESA analyst Tom Kontos says businesses needs to increase spending along w/ consumer to begin a sustained recovery
Significant Points
- Some experts feel "incentive fatigue" may prompt automakers to try alternate financing plans, such as balloon payment
- NADA advises dealers to focus on inventory management and move vehicles quickly
- Experts hopeful tax cuts will stimulate more used-car sales
Web Source
Sourced from: Used Car News, January 7, 2003
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| 9) Honda Tries to Reinvent Itself as Safety Leader |
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Situation
- Honda’s Utsunomiya, Japan, crash test center is 1 of world’s most advanced
- Center at forefront of Honda’s efforts to reinvent itself as safety leader
- Pilot SUV and Acura MDX, among others, now considered safest in class in US, Europe and Japan
- Honda’s now packed w/ features other makers ignore, ie improved pedestrian protection
- Honda’s popular even though company has offered fewer incentives than American carmakers
Significant Points
- Some question whether extra effort to emulate less-than-successful Swedish brand worth it
- Crash test dummies alone cost about $1M each, also employs 150 workers at Center
- Though Honda’s share of American market now over 8%, can’t compete on just price and performance if want to keep growing
- Trying to broaden lineup of cars and add features to appeal to broader base of customers
Web Source
Sourced from: The New York Times, January 7, 2003
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| 10) Safety Advocates Concerned About High-Tech Devices In Vehicles, Seek Government Regulation |
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Situation
- New high-tech devices in vehicles may detract from safety, says NHTSA chief Dr. Runge
- Automakers must make sure giving drivers access to email, news, stock quotes doesn't create hazards
- Telematics now available on 90 car models representing 19 brands in N America
- Alliance of Automobile Mfg. developed 23 voluntary principles to limit driver interference
Significant Points
- Safety advocates say guidelines don't go far enough, want federal government to regulate
- NHTSA has no immediate plans to regulate gadgets
- IBM worked w/ some automakers to develop systems that establish conditions where telematics don't work
Web Source
Sourced from: USA Today, January 15, 2003
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| 11) Crash-Scene Research Network Links Hospitals For Detailed Analysis Of Injury Patterns, Safety Issues |
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Situation
- In frantic rush after an auto accident, serious injuries often can go undetected
- Government-supported program linking hospitals seeking to document injury patterns
- Crash Injury Research and Engineering Network links 10 trauma centers by computer network
- Network containing information on crashes, injuries, treatment
- From streetside aid to hospital surgery and long-term follow-up
- CIREN started in 1998, based on research from early 1990s at 4 hospitals
Significant Points
- Goals: help doctors spot hidden injuries, aid engineers in designing safer vehicles
- More recently, CIREN has taken close look at side air bags
- In some vehicles bag only protects driver's or passenger's chest, leaving head exposed
- Network produces detailed analysis of 500 crash victims a year
Web Source
Sourced from: The Detroit News, January 11, 2003
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| 12) US EPA Unlikely To Approve NY Request For Exemption To Reformulated Gasoline Mandates |
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Situation
- Major metropolitan areas w/ ozone air pollution must use gasoline w/ 2% oxygen by weight
- Extra oxygen makes gasoline burn cleanly
- Most refiners blend ethanol or MTBE to meet oxygen requirement
- MTBE contaminates ground water when it leaks from underground tanks
- Ethanol creates more evaporative emissions and expensive to transport from Midwest
Significant Points
- NY Dept of Environ Conservation petitioned US EPA for gasoline oxygenate exemption starting 1/1/04
- Exemption unlikely to be approved --California request already denied
- Transporting 960M gal/yr of ethanol by barge/rail/truck to Northeast will add cost to gasoline
Web Source
Sourced from: CSP Net, January 16, 2003
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| 13) ChevronTexaco Begins Phase-out of Toxic MTBE Gasoline Additive In California |
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Situation
- California allowing only ethanol as gasoline oxygenate starting '04
- Methyl tertiary-butyl ether (MTBE) is toxic in ground water
- 3rd generation California Cleaner-Burning Gasoline uses ethanol instead of MTBE
Significant Points
- Chevron has completed infrastructure changes to switch Southern CA market from MTBE to ethanol
- MTBE will remove MTBE from Southern CA by May and rest of state by 12/03 deadline
Web Source
Sourced from: The OilSpot News, January 13, 2003
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| 14) OPEC To Raise Oil Production But Excess Capacity Insufficient To Cover Venezuela's Shortfall
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Situation
- OPEC raised production targets 7% (1.5M brrls/day) for 10-member limit of 24.5M brrls/day
- Prorated amount assigned to Venezuela whose labor strike preventing their usual 2M brrls/day production
- Many OPEC members have little/no excess capacity
- OPEC concerned about oil spikes hurting world economy and thereby longer term demand for oil
Significant Points
- Actual increased OPEC production likely <50% of promise due to lack of excess capacity
- Leading producer Saudi Arabia's quick reaction key to any real impact to stave off supply panic
- Oil prices not likely to drop while Venezuela strike continues and Iraq war looms
Web Source
Sourced from: MSNBC, January 12, 2003
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| 15) US Oil Stocks Near Lower Operational Limit - Price Hits $33 Barrel
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Situation
- Lower operational limit for crude oil distribution system defines level below which problems can develop
- Some storage tanks and pipelines cease to function safely below LOL
- LOL for crude oil distribution set in '98 at 270M brrls
- Some experts believe computer control improvements make safe operation now possible below this level
- The Strategic Petroleum Reserve is for emergencies like war or embargo that curtails imports
Significant Points
- US crude stocks fell to 272M brrls approaching LOL
- 2/03 futures contracts jumped to $33.21/barrel
- Tapping SPR not yet warranted to protect distribution system
Web Source
Sourced from: Wall Street Journal On-Line, January 16, 2003
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| 16) California Headed for Price Spikes As Switch To Summer Gasoline Blends Complicated By Ethanol Addition
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Situation
- CA gasoline oxygenate switchover from MTBE to ethanol has begun
- MTBE comprises 11% of gasoline by volume while ethanol comprises 5.7%
- CA refiners already producing at capacity
- Gasoline refiners switch from winter to summer blends April-June
Significant Points
- Switch from MTBE to ethanol in CA gasoline could send price to $2.50-$3/gal April-June when supply is tightest
- Increased gasoline imports likely to double to 100K brrls/day to compensate for volume difference in oxygenates
- The incremental cost of ethanol will account for only 5-10 cents/gal
Web Source
Sourced from: CSP Net, January 13, 2003
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| 17) Rosy Auto Picture Painted by Bill Ford, Battenbert, But Analysts Raise Doubts |
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Situation
- Optimistic vision for auto industry's future presented by CEOs of Ford, Delphi
- Automotive News World Congress hears keynoters William Clay Ford, Jr., J.T. Battenberg III exude confidence
- Ford's uptempo notes challenged by analysts as unrealistic, hinging on late-year debuts of F-150 truck, Windstar minivan
- Ford receptive to hybrid, diesel engine growth if government agencies pave way with tax credit, emissions relief
- Battenberg sees surging auto market if OEMs stick to "fundamentals," wants Delphi to become preferred supplier for "all OEMs worldwide"
- More joint ventures between OEMs, vendors seen by Battenberg -- like Delphi's w/ Calsonic, GM-Toyota at CA plant
Significant Points
- AN's 27th World Congress marked opening salvo in Ford centennial celebration
- How only 3 US automakers have survived since 1903 subtext of Bill Ford's remarks
- Nearly 400 automakers started up after Henry Ford built 1st Model T in 1904, only to fail for lack of sound business plan
- Big-3's problem these days is "fierce" competitive squeeze brought about by global competitors -- here and abroad
- Continuing growth in plant capacity w/ new plants baffles Battenberg: "What are they thinking?"
- Yet, Bill Ford toasts "next 100 years" of company his great grandfather founded -- still one of few of its size in any industry still controlled by same family
Web Source
Sourced from: Detroit Free Press, January 14, 2003, Page 6C; AD Staff Report
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| 18) "Golden Age" Dawns for Auto Industry, Lutz Proclaims |
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Situation
- Detroit show's profusion of new-vehicle dazzlers lifts curtain on 1st Golden Age of motordom since 1950s, says GM Vice-chairman Robert A. Lutz
- World Congress told by Lutz, 2 ace analysts, new GM sales group VP John F. Smith, "love affair of consumers for vehicles not dead"
- All global automakers unveil world-class-quality production and concept cars in arguably record numbers, delighting Detroit showgoers
- Hardnose analysts David E. Cole, Stephen Girsky see "challenges" ahead, weaker players fading away, but agree new age at hand from product, quality perspectives
- Automakers embracing new values, says Smith, from environmental to safety and advanced-powertrain areas -- if high development costs permit
- Cole expects more joint-venturing, like GM-Ford 6-speed transmission ("couldn't have happened 4 or 5 years ago"), GM-Toyota NUMMI plant
Significant Points
- Wall St analysts less bullish than Lutz, w/ respected Girsky predicting Ford will survive as smaller company as GM momentum rolls on, DC props up Chrysler
- Cole predicts no big swing away from gasoline or natural gas fuel sources, only minor inroads from hybrid, diesel, fuel cell engines
- Smith defines GM priorities as share growth, expanding in Asia/Pacific market (primarily China), keeping improved dealer relations
- Ever-blunt Lutz, says Cadillac superluxo car like new concept Sixteen, symbolizes new Golden Age
- Lutz also took time to praise VW/Audi interiors as "world's best," Nissan CEO Carlos Ghosn as "terrific" car guy
- To think it all started 100 years ago in Piquette St garage in Detroit, home of Model T and FoMoCo -- look for Model U for centennial in June (you read it here first!)
Web Source
Sourced from: Automotive News World Congress; AD Staff Report
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| 19) Dealerships May Still Be A Man's World, But The Scarce Women Owners Are Successful |
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Situation
- Women who own dealerships remain in low totals, but mostly do well
- GM counts 226 women dealers, or 3% of 7,400 in US; Ford, 278, or 5%; Toyota, 33, or 2%
- Even total dealership jobs held by ladies in single-digit percentages -- 7%
- Progress in recruiting women paced by GM, which began dealer development program for them in 2001
- Range of women in dealer employment ranges from 60% in office, 16% in finance and insurance, 2.1% in used-car sales, 1.3% as service techs
Significant Points
- Long-determined women dealers include Kitty Van Bortel, 2 Ford stores, 1 Subaru, Victor, NY and Elsie MacMillan, Toyota store Sierra Vista, AZ
- Van Bortel, 48, daughter of GM dealer, cajoled Subaru into opening point for her in Rochester suburb -- key to her landing Ford franchise
- MacMillan, 55, worked at stores in 4 states before arranging dealer development loan from Toyota
- It was easier for Cathy Ellis, 59, dealer-daughter who took over Atlanta Classic Cars (Mercedes), Decatur, GA and "grew up drag-racing cars"
- Automakers would have more women dealers if they encouraged women managers to take training and helped out with dealership development loans
- But that's the rub -- it's still regarded as "man's business"
Web Source
Sourced from: New York Times, January 13, 2003, Page 4BU
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| 20) Economy Show Signs of Recovery, But Auto Sales will be Down or Flat |
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Situation
- Economist says economy will pick up in 2003 but new-car sales will be down
- David Littmann of Comerica Bank in Detroit says used-car sales will remain flat
Significant Points
- Says economic fundamentals and leading indicators look promising for recovery
- Points to increasing disposable income in 2003
- Doesn't expect used-car market to change materially from 2002
- Says manufacturers will continue w/ incentives, holding used-car prices down
- Says Republican control of Congress will have significant impact to the economy
Web Source
Sourced from: Used Car News, January 7, 2003
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Call us at 856-787-6545 or E-mail at communications@arifleet.com
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