European Stars And Stripes (Newspaper) - March 19, 1989, Darmstadt, Hesse                                Page 18 the stars and stripes Dollar watch by Randy Mcclain business writer Eccl Roland Scharff treasurer of the Hes Sishc land Bank in Frankfurt West Germany. He s got Good news and bad news about the Dollar. The had news is that Scharff his Bank s for eign Exchange expert thinks the Dollar is bound to Drill lower in the next few Days after spending the past week heading up. The Good news is that he thinks there s a Hance the Buck could be As High As 2 Marks before year s end. First the bad news. I Sec the Dollar calming in he neighbourhood of 1.80 Marks in the next couple of weeks Scharf said. As he was being interviewed Fri Day the Buck was trading in Frankfurt at 1.8680 Marks. The military Exchange rate which will apply to Community banking transactions through monday was set Friday afternoon at1.85 Marks for a Dollar. Schafts message enjoy this while it lasts. The Dollar has been going up recently it risen by More than 2vi pfennig in the past two weeks because of a belief on the world s foreign Exchange markets that the . Economy is growing too fast and that the Federal Reserve will have to increase interest rates further to rein it in. High interest rates in the United states lend to attract foreign investors Money to Dollar denominated investments and that props up the Buck. The trouble is Scharitz does t think inflation is the big threat that Many other economists do. I think this fear of inflation is a Little bit overdone he said. Those people who were expecting another round of interest rate tighten ing Well it s not going to come in my eyes. Scharitz instead sees moderate growth in the United states and interest rate stability for at least the next two months. That he said mean the Dollar will Drift lower. A change May come however by june or ? Scharff Points to the West German vacation Factor. In Midsummer Wisl germans hit the Rodin great numbers and Exchange billions in Marks for dollars and other foreign currencies so they Llave vacation Money. That tends to depress the Mark s value and Aid the other currencies. While the vacation Factor May seem insignificant Al first Scharf said it should help push the Buck above 1.90 Marks. And from there even 2marks becomes a possibility Scharff said especially if . Interest rates fool him and Edge updater in the year. One concern though. If interest rates go up Loo far. Too fast he said it could Lead to recession. That would bring us All together Europe and the United slates in a big  the sure ind sir pct business news Chrysler tops list at cafes for 2nd Strong sales year  Bureau Munich West Germany  As signed to Europe May have porsche tastes but they re shopping for new cars on a Chrysler budget. The weak Dollar coupled with acc cd up marketing has resulted in a second straight Strong year for cafes new car sales and Chrysler products Are leading the Way. Sales of new cars were up 27.3 percent last year an that comes on the heels of a 25 percent increase in sales volume in 1987. A total of 16,295 new cars we resold in 1988, and 12,797 in 1987. Exchange officials said sales Revenue amounted to $21.2 million in 1988,compared with $16 million in 1987. Chrysler products accounted for More than half of1988 sales in numbers of cars sold. Dale Woodward manager of new cars sales for army and air Force exchanges in Europe said the Low value of the Dollar has placed most new european cars out of the average service member s Price Range which has caused americans to turn to american products. But Woodward thinks it s More than economic Factor contributing to his Agency s successful sales performance. We be got better locations an increased emphasis by cafes on the new car program and a product that s continuing to improve Woodward  s a lot to be said for american cars. They really arc improving in  the Exchange service s marketing approach include upgrading showrooms and opening new ones. Six new or upgraded facilities opened last year and 12 More Are planned for this year. Eventually about 30 new facilities will be opened including locations in smaller military communities. Woodward said availability of automobiles  be a problem in the year ahead. Manufacturers plan to More than double the number of new Model being shipped Over in an Effort to build a Large Pool of unsold vehicles that can be delivered to buyers immediately. In 1988. Autos available for immediate delivery numbered about 4,000 at any one time. That i expected to jump to about 10,000 vehicles this year Woodward said. The emphasis on increasing the Slock of cars is response to customers buying habits he said. For years about 60 percent of the cars and trucks sold Bya Afes were ordered for delivery to the United states. In the last five years however that has , 60 percent of the cars sold arc delivered within Europe. For the second year in a Row Chrysler products hot wheels 1988 cafes Europe new car sales Chrysler Ford Volkswagen pm jeep Eagle 51.4% 21.4% 9.9% 7.3% 6.7% percentages Are shares of total sales. Source cafes europes�3 a Sabin fld topped the sales list with 51.4 percent of new car sales Woodward said. Chrysler s nearest competitor was Ford which captured a 21.4 percent share of last year sales. Volkswagen was third with 9.9 percent of the Market and general motors followed with a 7.3 per cent Market share. Jeep Eagle products represented 6.7 percent of Sale Sand Harley Davidson 3.4 percent. Volkswagen cars will disappear from exchanges inlay. The company closed its . Manufacturing operations last year but the cafes Europe contractor stockpiled some 1989 models. The company will continue to make Volkswagen at a Plant in Mexico but those May not be sold under the Exchange program since sales Are limited to cars manufactured in the United states. Vehicles that Woodward describes As fun cars continue to account for about a third of All sales. These include minivans pickup trucks off the Road vehicles and sports models. It s a Market that s growing for us and we re going to push that Woodward said. Woodward predicted cafes car sales would show another healthy increase at the end of 1989. It May not be in the 25 percent Range but the growth will continue he said. West taking closer look at soviet Trade by David Tarran staff writer Brussels Belgium soviet foreign Trade atone time the concern of mainly the Mink and caviar set has More recently absorbed the attention of a much wider audience. From nato Secretary general Manfred Worner who thinks successful soviet economic reforms could Lead to better relations with the West to the Illinois tool manufacturer looking for a new Busi Ness Market the potential is suddenly Vodka Clear. That potential however has been overshadowed by a drastic plunge in soviet Trade with the West in the last two years. And last week about 100 International economists met at nato Headquarters seeking answers to the same question soviet president Mikhail Gorbachev is probably asking what went wrong since taking control of the soviet Union i March 1985, Gorbachev has instituted fundamental and far reaching reforms to revitalize the nation Economy idling products to Western markets was consid ered a key to redirecting the soviet Economy according to discussions at the nato forum and papers presented by several participants. Such foreign Trade was to provide the soviet with the advanced engineering equipment and tools essential to economic modernization wrote Daniel Thorniley. A soviet and East european analyst at business International in Vienna Austria. Ultimately the Exchange was to improve the Quality of soviet products for Export. But recent Trade figures have raised doubts about Gorbachev s ability to pull off the economic Turna round. Soviet Trade with the West declined by 38 percent in 1986, 5 percent in 1987 and 13 percent in the first half of 1988, according to Thorniley. Much of that slide can be blamed on the collapse of world Oil prices and the fall of the . Dollar. However the decline has shown to any remaining sceptics that the soviet Union can no longer Cush Ion its stagnating inefficient Economy by relying on High world prices for its raw materials Thorniley wrote. And doubts persist about the Domestic soviet Economy despite Many Reform initiatives. One speaker said the most important segment of private economic activity in the soviet Union today is the underground Economy flourishing in the face of harsh new Laws to fight it. Such activity is not limited to illegal alcohol sales a Market driven mostly underground by g9r Bachch s anti alcohol Campaign the speaker  laundering and other racketeering activities associated with organized crime also Are Preva Lent. One Way in which the soviets have gained a legitimate toehold in world markets has been through joint business ventures with the West. The ventures offer Western companies Access to soviet markets while introducing Western technologies and management techniques to the East. Until recently such partnerships required 51 per cent soviet ownership and a soviet citizen As chief executive. However a Law that look effect in de Cember eased those requirements allowing Western companies to have More than a 49 percent share of the company and allowing Western Bosses. Still the numbers remain Small with Only 252east-West ventures As of feb. 15, according to one speaker. Most arc Small scale enterprises and 40percent arc in service Fields rather than manufacturing. The risks facing these ventures Are daunting. For example rubles the soviet currency cannot be convened on the world Market forcing Western companies to buy other soviet products in rubles for Export. And Laws governing the joint ventures arc still vague. According to one speaker the soviets say it May take 10 years before they perfect them. In the meantime the Laws will have gaps and Progress will be evolutionary. Although scepticism about the effectiveness of soviet Reform remains Strong most speakers agreed there has been a fundamental change in tone wit the Gorbachev regime. Changing and adapting to the world Economy arc now a priority. It s a matter of survival of the soviet Union Asan important socialist country one speaker said. But whether the changes arc enough to ensure economic Success remains far from certain