BOTH GENERAL MOTORS AND CHRYSLER HIKE THE PRICE OF '79s... as the incremental price increase policy rolls on. Fleet administrators returned from the holidays to be greeted by average price increases of $137 for GM products and $85 for Chrysler vehicles. The average GM boost amounted to 1.7-percetn, or an average of $474 per car over 1978 models. Prices on GM light-and medium-duty trucks were also increased an average of 1.7-percent. The average $85 boost at Chrysler, representing a 1.2-percent increase, is also the third for the automaker which followed GM's lead in boosting optional engine prices as well as announcing an initial price bike at model introduction. Chrysler's average price bike was kept below GM's because it didn't change sticker prices on the Omni/Horizon, but the company boosted prices about $109 on the LeBaron series and $244 on the New Yorker.

AMERICAN MOTORS ENTERS PACT WITH RENAULT... almost 10 months after the two carmakers agreed to enter joint automotive sales activities. The formal agreement now clears the way for AMC and the French auto and truck manufacturer to begin selling each other's products, notably the LeCar in the U.S. at AMC stores and Jeep products at Renault points in parts of Europe and South America. During 1980, franchised AMC/Renault dealers in the U.S. and Canada will sell and service the new front-wheel-drive Renault 18 sedan and station wagon models imported from France by AMC. The agreement also provides for further study of adapting Renault products for manufacture in the U.S. The automotive sales and distribution divisions of Renault's U.S. subsidiary, Renault USA, now located in New Jersey, will be combined with American Motors at its Southfield, Michigan headquarters with AMC becoming the sole importer for Renault vehicles in the U.S.

EPA PROPOSES TIGHT RESTRICTIONS ON DIESEL PARTICULATE MATTER.... And the major auto manufacturers call the standards unreasonable. Under the EPA proposed ruling, diesel particulate matter would be limited to 6 gram or less of particulate matter for each mile driven for diesel cars and light trucks manufactured during 1981 and 1982. Vehicles produced in 1983 and thereafter would be restricted to 2 gram or less per mile. Current diesel models emit between. 23 gram for the Rabit diesel to 84 gram per mile for the Oldsmobile. GM labeled the ruling unreasonable within the given time frame. Industry sources feel the ruling would require diesels to be equipped with turbochargers or other exotic equipment not yet available in order to meet the standards. The EPA claims the particulate matter is a potential health hazard, although no conclusive proof of such a hazard has been substantiated.

AUTOMOBILE ENGINE ADJUSTMENTS WILL BE LIMITED... as a result of still more regulations promulgated by the EPA. The government agency's regulations limit engine-timing and richness adjustments choke can be adjusted prior to emission testing. The following year, idle speed and timing spark will fall under the requirements. The EPA has made it clear that to be certified a car must be successfully tested anywhere within its physically adjustable range. This will cause the manufacturers to limit the amount of adjustments that can be made to an engine.

SHORT TAKES.... Toyota again tops U.S. imports by selling 536,682 cars and light trucks during 1978. It also marks the second year in a row that the Japanese car maker has stopped the half-million mark in sales. Top company officials are predicting that 1979 will be another 500,000 plus year....Vale Labs has done research on air bag repairs and found that although Detroit will refine the systems that will become common on most cars in the next decade, most service shops and dealers are either unprepared or unwilling to fix damaged vehicles with air bag systems. According to James Wasylik, Vale's director or research, "Vale Labs believes they (airbags) pose a significant inflationary threat to auto damage claims costs." ... Runzheimer & Co. reports that it would cost $23,400 to build a $5,097 car from replacement parts alone. That figure does not include the cost of labor.