There was a whiff of optimism, albeit of the cautious variety, mixed with the usual scents of rubber, new car and acres of indoor carpet at the Detroit auto show this year. After a brutal 12 months that saw sales plummet across North America and two of the former “Big Three” Detroit carmakers file for bankruptcy, auto executives were understandably eager to put the past behind them and get back to the business of selling cars, trucks and SUVs amid growing evidence of an economic turnaround.
While the show lacked the glitz and glamour of even just a few years ago—no trucks were dropped from the Cobo Center’s ceiling or cattle-herded through downtown Detroit—the cloud that had hung over last year’s displays lifted to reveal an industry that, if not completely transformed, believes that it’s finally found the right mix of smaller and greener cars to survive in the new and more cutthroat automotive landscape.
“You see all these positive signals on the horizon, plus the fact that our new vehicles are so well accepted, plus the fact that we’re seeing a mild economic recovery,” Bob Lutz, GM’s vice-chairman and product czar, told a group of reporters before the company unveiled its five-door Aveo RS concept, a European-style, sporty hatchback. It all translates into “a chance, a reasonable chance” that GM could return to profitability this year, according to Lutz. Which would be no small feat for a company that has lost some US$80 billion over the last four years, took on US$50 billion in taxpayer loans, slashed four of eight vehicle brands, including Saturn and Pontiac, and is now searching for what could be its third new CEO in less than 12 months.
Similarly, GM’s crosstown rival Ford, which unlike GM and Chrysler didn’t file for bankruptcy or take government bailout money, was also in a buoyant mood after taking home a pair of awards for best car and truck of 2009 (for its Fusion hybrid and its Transit Connect van), a period when it managed to increase market share at the expense of its competitors. “I think the turnaround is here, and it is taking hold,” says Ford of Canada president David Mondragon, who sat in a tiny makeshift office overlooking the company’s displays, including Ford’s new Focus compact car—a so-called “world car” that was unveiled earlier in the day amid thumping music and a dazzling light show. “We are starting to see the fruits of many years of labour.” Even Chrysler, which was narrowly rescued from the abyss by a shotgun marriage with Italy’s Fiat, is predicting that it can break even this year and return to profitability by 2011.
But while the industry may no longer be in the emergency ward, it’s far from being truly healed. Sales for this year are expected to be a shadow of what they were before the economy drove off a cliff at the end of 2008. In the key U.S. market, sales hit a low of 10.4 million in 2009—almost three million less than a year earlier. Some analysts are also talking about the possibility of an extended slump. And, as far as the beleaguered North American automakers are concerned, it’s not yet clear whether all the talk about the cars of tomorrow—many of them small and underpinned by yet-to-be-perfected technologies like plug-in electric hybrid motors—will be sufficient to lure people back into showrooms today.
As a result, the Detroit show, once a shrine to fuel-guzzling trucks, cavernous SUVs and throaty muscle cars, now looks more like a collision between a car dealership and a botanical garden. In the Cobo Center’s basement, there is a test track, first erected last year, where “green” vehicles zip quietly past waterfalls, tulip beds and various types of evergreen and leafy trees. Meanwhile, upstairs, a massive section of the convention hall’s main floor was dubbed “Electric Avenue” and devoted solely to electric vehicle concepts, with the “green” imagery once again in full bloom.
Individual automakers also had fuel efficiency front and centre in their blindingly lit displays. Toyota, in particular, appeared to be betting the future of the franchise on so-called alternative powertrains. Giant pictures of trees, birds and flowers flanked its car displays, and its big announcement was a new subcompact plug-in hybrid concept called the FT-CH. The car is aimed at younger buyers, and would sell for less than the company’s Prius hybrid, according to executives. (Plug-in hybrids refer to vehicles that, after being charged, can run for a certain distance on battery power alone before reverting to a regular gasoline engine. Regular hybrids, by contrast, use a mixture of the two while driving.)
Toyota also revealed that it intends to turn the Prius name into a family of hybrid vehicles, building on the car’s growing popularity as a green alternative. “In the next 10 to 20 years, we will see global demand for fuel exceed supply,” Yoichi Tomihara, the CEO of Toyota Canada, explained to a group of reporters at a dinner event on the eve of the auto show, adding that the Japanese automaker intends to offer a hybrid model in every segment in which it competes.
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