US Auto Shows Reflect Industry Doldrums
By DEE-ANN DURBIN – AP
March 21, 2008
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NEW YORK (AP) — Manufacturers were short on new cars at this year's major U.S. auto shows, including the New York International Auto Show this week, but automakers remained upbeat as they showed products they hope will lift the U.S. industry out of its doldrums.
U.S. auto sales are expected to hit their lowest level in at least a decade in 2008, and talk about the economy dominated this year's shows.
"The market is a headwind. We're in choppy waters," Chrysler LLC Vice Chairman and President Jim Press said Wednesday in New York. "But the great thing is that it affects everybody. It rains on all sides of the street."
Vehicles unveiled at auto shows in Detroit, Chicago, Los Angeles and New York have been in the making for many months and even years, but several automakers in New York predicted an upswing in the second half of 2008 as consumer confidence improves.
In the meantime, facing slower sales and tighter budgets, they are putting out fewer fantastic concept vehicles and focusing their product development resources on vehicles that are more likely to be built, according to Jack Nerad, executive market analyst for Irvine, Calif.-based Kelley Blue Book.
Just weeks after showing its Ford Verve as a concept in Detroit, for example, Ford Motor Co. confirmed that the subcompact — now called the Fiesta — will hit U.S. shores in 2010.
"When times aren't flush, the faucet is turned off on out-there concept cars," Nerad said.
One way automakers are trying to raise profits is by competing in new segments. Hyundai Motor Co. introduced its first luxury sedan, the Genesis, in Detroit in January and its first performance-oriented sports car, the Genesis Coupe, in New York. Kia Motor Co. showed its first mid-size sport utility vehicle, the Borrego, in Detroit. General Motors Corp. is inventing a whole new segment with its Pontiac G8 sport truck, a two-door with a six-foot bed that's reminiscent of the Chevrolet El Camino.
But new models were generally in short supply. After an influx of introductions in Detroit, including the 2009 F-150 and Dodge Ram pickups and 2009 Toyota Venza crossover, most automakers seemed to have little left over. Toyota Motor Corp. unveiled no new products at the Chicago auto show in February and introduced only a Scion concept this week. Chrysler got some extra mileage from its Dodge Challenger muscle car, introducing the 2008 model in Chicago and the 2009 model in New York.
Aaron Bragman, an auto analyst with the consulting company Global Insight, said new products could be in short supply in the next few years as auto makers try to figure out how to meet new fuel economy standards that will require a fleet average of 35 miles per gallon by 2020.
"People are still gearing up and trying to figure out what they need to do," he said.
GM was one of few automakers with a constant product offensive at the U.S. shows, Nerad said. The automaker produced strong buzz in Detroit with its elegant Cadillac CTS sedan and concept coupe, introduced the hybrid GMC Sierra hybrid pickup in Chicago and unveiled three new performance-oriented Pontiacs in New York, including the sport truck and a hardtop version of its Solstice convertible.
The rear-wheel-drive, performance-oriented Pontiacs might seem out of touch in an era of high fuel prices, but analysts said there is still a substantial market in the U.S. for those and other high-performance vehicles that got top billing at this year's shows, like the Challenger and the Genesis Coupe.
"That type of car isn't someone's only car, and it's not marketed to 21-year-olds who are worried about gas prices," said Erich Merkle, vice president of auto industry forecasting for the consulting company IRN Inc. in Grand Rapids.
Merkle said it's essential for automakers to build excitement and emotion, and those cars help them do it.
"Ultimately, what sells cars at the end of the day is the emotional response of the consumer," he said. "Automakers can't lose that emotional hook."
But Bragman said this year's shows could be a final gasp for the American muscle car, as automakers try to figure out whether fuel economy standards will force them to compromise on horsepower and whether younger buyers will even be interested in the kind of nostalgic performance cars that are captivating Baby Boomers. He noted that the Genesis Coupe has a V-6 engine — not a V-8 — and that the 2009 Challenger also has a new, optional 3.5-liter V-6 instead of the V-8 that comes standard in the 2008 model.
"We're unlikely to see those in the future, unless there are some miraculous improvements in the technology of the V-8," he said.
The New York show was starting Friday after two days of media previews.
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Print | posted on Friday, March 21, 2008 3:21 PM