"The Road Ahead"-Auto Showroom Sneak Preview
Tuesday, July 08, 2008SUSIE GHARIB: American auto makers are bracing for what may be the worst fall season for auto sales in more than a decade. Rising gasoline prices and the credit crunch have delayed the launch of some vehicles and canceled future designs. Over the next two nights, we'll take a look at how the auto industry is confronting its future in our series, "The Road Ahead." Tonight, Diane Eastabrook takes us to Detroit for a preview of what auto makers are putting in their dealer showrooms this year.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: At Chrysler's test track near Detroit, reporters recently got a chance to snap pictures, rev engines and test-drive new products rolling into Chrysler and Dodge showrooms in the coming months. While smaller, fuel-efficient cars are all the rage this summer, Chrysler has two new muscle cars hitting dealer lots this fall -- the Dodge Challenger SE, with a V-6 engine, and the Challenger RT, with a more powerful hemi V-8 engine. Both were in the pipeline for a few years before fuel economy became an issue. But Chrysler is casting an eye toward fuel economy as its first hybrids hit the roads this fall. I got behind the wheel of the aspen hybrid and checked out the Dodge Durango hybrid with Glenn Denomme, chief engineer for Chrysler's hybrid power train program. Both the Aspen and Durango are powered by two-mode hybrid engines. The engines use electric power at low speeds, and a combination of gas and electric power at high speeds. Denomme says the two-mode system helps extend mileage for larger hybrids.
GLENN DENOMME, CHIEF ENGINEER, HYBRIDS, CHRYSLER: In the city, we get 46 percent improvement in the city fuel economy, and we get an 11 percent improvement in the highway, and overall combined is about a 26 percent improvement in fuel economy.
EASTABROOK: Still, with gasoline prices topping $4 a gallon, "Motor Trend's" Todd Lassa questions if hybrids are enough to jumpstart sluggish sport utility sales.
TODD LASSA, DETROIT EDITOR, MOTOR TREND: I think this is kind of almost a last gasp. The hybrid will help extend their life a little bit, and that hybrid is important also in perhaps extending the life of the Chrysler 300 and the Dodge Charger.
EASTABROOK: Domestic and foreign auto makers count on new products to drive sales. But the new vehicles heading to showrooms could be a tough sell to consumers in a tough economy where credit is tight. Still, Ford is hoping for a home run with its Flex. The new crossover could appeal to consumers who want the roominess of a sport utility, but not the high fuel costs. The boxy vehicle, arriving at dealerships now, seats up to seven people. Ford says it will get about 30 percent better fuel economy than full-size SUVs. Competing with the Flex is Toyota's Venza. It hits showrooms this fall. The Venza is slicker than the Flex, but smaller. General Motors has perhaps the broadest assortment of new products coming out between now and the end of the year -- 12 new vehicles, including hybrids, a crossover, and even a muscle car, will be rolling into dealer showrooms. Look for the Corvette ZR-1 later this summer. In the fall comes a high performance Cadillac, the CTS V sedan. The fall will also bring another crossover to showrooms, Chevrolet's Traverse. At the end of the year or early next year comes the GMC Sierra pickup. It's powered by a two-mode hybrid engine, like Chrysler's new hybrids. Mark Laneve, VP of General Motors North America, says he's optimistic about GM's entire vehicle line-up, but admits to some reservations.
MARK LANEVE, V.P NORTH AMERICA OF SALES, GENERAL MOTORS: What is more volatile right now and hard to pin down is what is going on in the truck market. It's still a big part of the market -- full-size pickups, full- size utilities -- but it has certainly been under a lot of pressure, and what can we expect from that market moving forward.
EASTABROOK: Many industry watchers are disappointed there aren't more fuel-efficient, smaller cars coming out this year. But Jeff Schuster, head of automotive forecasting for JD Power and Associates, thinks more are in the works.
JEFFREY SCHUSTER, EXEC. DIR., AUTO FORECASTING, J.D. POWER & ASSOC.: When you look at some of the planning going on, some of the discussions, everyone is scrambling to get small cars here and get enough volume here if it's not built here. And I think if you tie that into future trends, such as new CAFE standards, this is a good start or a good indication of what's more to come.
EASTABROOK: Tomorrow, we'll look at how U.S. auto companies are racing to get consumers behind the wheels of smaller, more energy-efficient vehicles. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Detroit.
