Will The Auto Show Be Just That...A Show?
Monday, January 12, 2009PAUL KANGAS: The future of the auto industry is on display in Detroit this week. Manufacturers from around the world are rolling out new vehicles they hope will roll into showrooms over the next few years. But financial trouble at General Motors and Chrysler, along with slumping sales, have many experts wondering if these products will ever appear on dealer lots. Diane Eastabrook has the latest from Detroit.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Chrysler turned heads at the North American international auto show with two bold electric concept cars: the Circuit and the C200 sedan. But after getting a $4 billion government bailout last month, many industry watchers question if Chrysler even has a future. CEO Robert Nardelli says it does.
ROBERT NARDELLI, CEO, CHRYSLER CORPORATION: I think we're doing all the right things. It isn't that we haven't made some mistakes over the 83 years. You know, people who do things make mistakes. They never make the biggest mistake of all, doing nothing. And so we're doing a lot to try to cement our viability for the future.
EASTABROOK: The North American international auto show is the industry's debutante ball for new products, but slumping global sales are taking the glitz out of this gala. Veteran auto analyst John Casesa says also taking the shine off this event is the prospect of Chrysler and GM needing another round of government aid.
JOHN CASESA, MANAGING PARTNER, CASESA SHAPIRO GROUP: For the most part people are waiting to figure out what the government will do next because that's really the story of the industry in the near term.
EASTABROOK: Bowing to government demands for more fuel efficient products, GM introduced the subcompact Spark, which it says will get 40 miles per gallon and the electric Cadillac Converj concept. Chairman and CEO Rick Wagoner thinks going green is the right thing for GM to do, even if oil prices are currently cheap.
RICHARD WAGONER, CHMN. & CEO, GENERAL MOTORS: We believe based on our best look that over time oil prices will resume their increase and oil is going to be more expensive in the future than it has been in the past. So, we think it's a prudent thing to do from a business perspective.
EASTABROOK: Meanwhile, Ford is bringing back an old standard: a newly designed Taurus. Mark Fields, Ford's president of the Americas, thinks reintroducing the Taurus later this year is a good bet in a troubled economy.
MARK FIELDS, PRESIDENT OF AMERICAS, FORD MOTOR CO.: We feel we have a best in class product here that looks great and is going to represent a really good value to customers.
EASTABROOK: Toyota is also sticking to a standby. It rolled out the third generation Prius hybrid. While hybrid sales slumped in the U.S. late last year, Toyota Motors' Senior Vice President Donald Esmond thinks they'll rebound in the second half of this year.
DONALD ESMOND, SR. V.P., TOYOTA MOTORS: There is a future for Prius. There is a future for hybrids and again we just have to get over this little bump, this recession bump that we're going through, but we think there's a very good market for Prius.
EASTABROOK: Another sign of the times at this year's North American international auto show is who isn't here. Six manufacturers, including Nissan and Suzuki, didn't even bother to come. Hyundai is here, but isn't rolling out any new production or concept vehicles. Instead, Hyundai Motor America CEO John Krafcik is promoting the company's new assurance program. It lets buyers return new vehicles during the first year of purchase if they lose their jobs.
JOHN KRAFCIK, CEO, HYUNDAI MOTOR AMERICA: We are hearing from customers, from dealers. This is an amazingly creative program and you are responding to a real consumer fear and we appreciate that.
EASTABROOK: Industry watchers are optimistic about many of the fuel saving technologies and smaller cars rolled out at this year's show. They only wish they could be as optimistic about the industry's prospects for the next year. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Detroit.
