Feature

Issue of the week: Signs of life for the auto industry

There was an optimistic note at the North American International Auto Show in Detroit this year.

To gauge the difference between this year’s North American International Auto Show in Detroit and last year’s, just consider the fashions at the charity ball that kicked off the event, said Georgea Kovanis in the Detroit Free Press. Shunning the somber black gowns that dominated at the 2009 gala, the women attending Detroit’s “biggest party of the year” opted for “big, fat, bold, happy colors” that reflected optimism about their city’s once-proud industry. And unlike the ho-hum cars on display at “last year’s decidedly maudlin affair,” there was plenty of “new eye candy” to admire, said David Welch in Bloomberg BusinessWeek. The most popular cars at the auto industry’s annual U.S. showcase were “green, clean, and at a minimum more efficient.” Toyota’s prototype FT-CH Hybrid turned heads with its fastback styling, and crowds gathered around the CR-Z Hybrid, Honda’s latest rival to Toyota’s Prius. “And let’s not forget Tesla Motors’ Model S sedan,” an all-electric “looker” that will compete in the luxury sedan market beginning in 2012.

What a difference a year can make, said Keith Naughton in Bloomberg.com.In a pronounced shift from last year, when the main topics of conversation were evaporating sales, bankruptcy filings, and government bailouts, most auto executives sounded cautiously optimistic. The unquestioned star of the event was Ford CEO Alan Mulally, “whose company gained market share in the U.S. last year while his domestic rivals went bankrupt.” The Focus compact is the linchpin of Mulally’s turnaround plan. If he can convince a large number of Americans to buy the Focus, Ford could become solidly profitable again. That’s a big if, though. Unlike their counterparts in Europe, “U.S. consumers have yet to embrace diminutive models.”

If Ford’s exhibit drew excited crowds, Chrysler’s display mostly stirred puzzlement, said Terry Box in The Dallas Morning News. The company, which last year filed for bankruptcy protection and was acquired by Fiat, opted to showcase a hodgepodge of current Chrysler and Fiat models, with no eye-catching “concept cars” or new models, aside from a Fiat Lancia sedan hastily fitted with a Chrysler badge. That was all according to plan, insisted Chrysler CEO Sergio Marchionne. The company is “hibernating” while it fills its product pipeline, and new models will be ready for next year’s show.

While Chrysler cobbles together a new lineup, other manufacturers are working to “redefine what we drive in the future,” said Tom Krisher in the Associated Press. General Motors has “transformed its cheap and ugly Aveo subcompact” into a five-door hatchback with highway mileage of around 40 mpg. Then there’s the battery-powered Nissan Leaf, which “begins the new era of electric cars.” Powered by a lithium-ion battery, the Leaf can travel 100 miles between charges. Automakers are crossing their fingers that such green vehicles “will appeal to a profit-generating number of U.S. car buyers,” said James Healey in USA Today. After two disastrous years, the industry is betting that its best chance for recovery lies in disproving the old Detroit adage that “small cars equal small profits.”

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