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Subdued Detroit auto show to focus on going green
2009-01-11
DETROIT, Michigan, (AFP) - With sales tanking and General Motors and Chrysler struggling for their very survival, the Detroit auto show promises to be a subdued and tense affair as automakers launch new models to compete for an ever-dwindling number of customers. Some 58 new models -- including 44 worldwide debuts -- will be introduced in the coming days as the manufacturers vie for the attention of nearly 7,000 journalists from over 60 countries at press previews. Mercedes was the first to launch its latest high-ticket vehicle, its E-class luxury sedan, at an invitation-only cocktail reception at a posh downtown hotel Saturday night. Prominent among the new offerings are a host of ready-for-market hybrids and experimental electric vehicles which will be zipping around a tree-lined track set up in the basement of the Detroit convention center beginning Sunday. The testing track surrounds two ponds with waterfalls and will showcase zero-emission electric prototypes by GM, Ford, Toyota, Honda, Mitsubishi and Tesla. Ford will also be introducing two new hybrids which it says get better fuel economy than Toyota's popular Prius. Refusing to be upstaged, Toyota will launch an improved version of its Prius and a new dedicated hybrid for its luxury Lexus brand. And Honda will unveil its reintroduced dedicated hybrid, the Insight hatchback. But in a sign of the troubled times, the Japanese automaker canceled a press conference for the Insight, which will make its worldwide debut without fanfare in the Honda booth when the show opens Sunday. A number of automakers decided to skip the show altogether this year, including Nissan, Suzuki, Porsche, Ferrari, and Land Rover. "Beyond the products and the lights and the glitz, everyone is in a holding pattern," said Karl Brauer, editor-in-chief of the automotive website Edmunds.com. "Uncertainty is the underlying tension." A financial crisis, credit crunch and deepening recession pushed 2008 US sales down 18 percent in the steepest decline in 29 years and to the lowest level since 1992. This year is expected to be even worse, with US auto sales forecast to fall by another one or two million vehicles to around 11 to 12 million vehicles. Sales have not been below 12 million since the recession of 1982 when the United States had 74 million fewer people than today. While nearly every automaker posted significant losses and has announced major production cuts last year, Detroit's Big Three were the hardest hit and saw their combined US market share fall below 50 percent for the first time. Their US market share topped 60 percent as recently as 2004 and was 71.2 percent just 10 years ago, according to Ward's Auto. Despite years of painful restructuring which had the trio on the road to recovery, the US government was forced to extend billions in loans to cash-strapped GM and Chrysler last month after sales dropped off precipitously in September. Analysts warn that the loans could simply serve to postpone a collapse if the automakers can't lure more buyers into their showrooms. "What we're looking for is some kind of stabilization," said Rebecca Lindland of IHS Global Insight. "It's not just about how many cars you can sell. It's about how many cars you can sell at a profit." The real question, she said, is if GM, Ford and Chrysler are able to learn to operate profitably at a lower market share level and get "some positive results from the opportunity to reorganize." "If they continue to get support from the federal government as we expect, we would also expect to see an improvement in their balance sheet," she told AFP. The North American International Auto show opens in Detroit with a press preview Sunday, and some 700,000 people are expected to attend by the time it closes on January 25.
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