In contrast to the razzle-dazzle and boosterism of years past, the atmosphere at the North American International Auto Show in Detroit this week is a somber one. With U.S. automakers battling to survive and to avoid bankruptcy, a worsening economy, and some major manufacturers bypassing the show altogether, there is a worry that public attendance will be much lower than in past years.
Even with all the bad news, most auto companies are taking the attitude that the show must go on. And for host companies General Motors (GM), Ford (F), and Chrysler, it is expected to be a show with little in the way of bombastic presentations or crazy vehicles that look as if they are destined more for video games than showrooms. Instead, it's meat-and-potatoes time, with Detroit automakers concentrating almost entirely on electric vehicles and newly designed cars and crossovers aimed at their fastest-growing categories, meant to sell in large numbers and cut into the market shares of Asian rivals.
General Motors, which has to prove "financial viability" to the U.S. government in order to keep the $13.4 billion loan it is receiving to stay afloat, is not expected to show any 1,000-horsepower concept cars. Instead, one of the highlights is a redesigned Chevrolet Equinox compact crossover SUV. Despite this category being the fastest-growing over the past eight years, the old Equinox was a poor entry. "No question that we could have and should have done better," says Ed Peper, Chevy brand chief for GM. "Our margin for mistakes or launching vehicles that aren't 100% competitive is zero."
The headline on the new Equinox, which arrives in showrooms in mid-2009, is that GM expects the new 4-cylinder, 2.4-liter direct-injection engine to earn a government fuel economy rating of 30 mpg/highway. That is a 25% improvement over the V6 engine, which was the only one offered in the current Equinox, and 2 to 3 mpg better than the current Toyota (TM) and Honda (HMC) offerings. A 3.0-liter V6 is also available. "The compact crossover SUV category is crucial because it draws buyers from every age, and that Chevy has been a minor player has been a crime," says independent marketing consultant Dennis Keene.
The current Equinox, with 2008 sales of just 67,000 compared with 287,000 Honda CRVs and 173,000 Ford Escapes, has also been criticized for a bland exterior, a cheapish interior, and too few standard features. The new one attacks all fronts with a more stylish exterior, six standard airbags, four-wheel disc brakes, StabiliTrak electronic stability control and traction control, as well as standard OnStar. The interior plastics are higher grade, and the new layout of the instrument panel has a much more premium feel. "They seem to have fixed everything that was wrong with the old one," says Rebecca Lindland, an analyst with IHS Global Insight.
GM also is delivering a new Buick LaCrosse sedan the likes of which few Realtors and suburban bank officers (Buick's traditional buyers) have seen before. Having sold just 37,000 LaCrosses last year, many would think the car isn't that important. But it represents a global design that GM will sell from the Chinatown sections of San Francisco and New York and all points in between, as well as China itself, where the Buick brand remains robust.
To modernize the design with the hope of lowering the average age of buyers in the U.S. from 63, GM turned to some of its youngest lead designers. "The designs that stand out today, here, as well as in China, are the cars that make people stop and say, 'Wow, what is that?'" says Justin Thompson, 33, who designed the exterior of the sedan.
"A Huge Step Forward"
The outside of the car looks more contoured than we have seen from Detroit in decades. Inside, the car is all about comfort, with rich leather seats, a walnut-trimmed console, and video screens in the front-seat headrests for rear passengers. "It takes the brand and this particular model a huge step forward, but the brand still means 'old' in the U.S.," says James Hall of auto consultancy 2953 Analytics.
Rounding out GM's offerings is a newly redesigned Cadillac SRX crossover SUV. Again, this car represents "steak" for GM, as an upgrade of their entry into one of the most important segments in the industry—luxury crossover priced between $35,000 and $50,000. The 2010 model, on sale later this year, is quite an improvement over the current one, which appeared tall and ungainly. The new offering is more than six inches shorter and two inches wider. In keeping with a trend to smaller engines and more fuel economy, the new SRX only comes with a choice of V6 engines—one a 3.0-liter, the other a 2.8-liter.
Why is SRX so important? GM's Mark McNabb, who oversees Cadillac, says the category "is going to continue to win over people who previously bought bigger, heavier SUVs like the Cadillac Escalade." Caddy is also selling a wagon version of its popular CTS because it sees so much potential for the segment in the U.S., as well as in Europe where both cars will sell.
While the car looks terrific, one issue may be some loss of cachet when the hard-core Caddy fans start talking about the fact that it isn't built off the same platform as the Cadillac CTS, but the platform underpinning the Chevy Equinox/Pontiac Torrent.
For Ford, its meat and potatoes is a newly redesigned Taurus sedan and a Lincoln MKT crossover.
Ford is hoping the public will give it a do-over on the Taurus. First, Ford botched the redesign in the mid-1990s, making it look like a football on four wheels. It milked that mistake until 2006 and announced the Taurus name would go away. Then, finding that its Five Hundred sedan wasn't grabbing any attention, it rechristened the car the Taurus, while it renamed the Ford Freestyle crossover the Taurus X. Confused? Join the club.
The 2010 Taurus, though, should be enough to wipe out the memory banks. The sedan, though built on the same very good engineering platform that underpins the current Taurus, Ford Flex, and Lincoln MKS, resembles Ford's European Mondeo sedan more than it maintains any connection to the Taurus in showrooms today.
"This puts Taurus back where it belongs," says Ford Chief of Design J Mays. If the bulbous arced roofline of the Taurus gave it an almost comically appliance-like look, as if manufactured for people over 6 feet 7 inches to fit, the redesign carries the look of a well-cut off-the-rack suit. Indeed, Moray Callum, director of Ford's car and crossover design, says it is not so much a "family car," which he says is still the minivan and SUV, but rather a "me car" that he reckons will appeal to people who like a four-door sedan with "presence," whether the buyer is 30 or 60. "If this design doesn't restore Taurus in the buyer's mind, I don't know what will," says Callum.
It's hard to recall that Taurus was once the best-selling car in the U.S. back in the early 1990s. But the company only sold 53,000 Taurus sedans last year, and a big chunk of them were rental cars. The automaker would like to see at least 75,000 retail customers in the car's first full year on sale, in 2010. To draw them in, the Taurus sports a refined interior one might expect to see in a Lexus or Mercedes (DAI) and an array of options including push-button start, steering wheel-mounted paddle shifters, keyless entry, rain-sensing wipers, adaptive cruise control, heated and cooled seats, all-wheel-drive, and lumbar seat supports that change automatically on long trips to help the driver's circulation.
The Lincoln MKT crossover that goes on sale later this year is very close to the concept car Ford brought to the show a year ago. It's an important model for Lincoln as Ford continues to rebuild the brand's image after selling off its European luxe brands Jaguar, Land Rover, and Aston Martin. Like the concept, the MKT sports three rows of seats and all the bells and whistles, such as adaptive cruise control, park assist (automatic parallel parking), as well a 3.7-liter V6 or 3.5-liter EcoBoost (direct-injection turbocharged) engine. More a wagon than an SUV, the MKT seems a legitimate rival to models like the Mercedes R Class and Cadillac SRX.
Chrysler is having a terrible time convincing anyone that it will still be in business as a standalone company by yearend. But for the automaker to have breakup value to GM, said to want to buy certain Chrysler assets, the company is shoring up two of its most valuable models with redesigns: the Chrysler 300/Dodge Charger sedans and the Jeep Grand Cherokee. Those designs won't be shown to the public, though, until the Chicago Auto Show in February and the New York Auto Show in March. In Detroit, visitors will see electric versions of the Town & Country minivan and Jeep Wrangler, which have a small backup gasoline engine to recharge the battery after about 40 miles when the plug-in charge is used up, as well as an all-electric Dodge sports car called the EV. It has only a lithium-ion battery with a range of about 150 miles before it must be recharged externally.
Even with gas prices below $2 per gallon, the industry and the U.S. government believe that electric and hybrid vehicles are the future of driving in the U.S. And since the government is now de facto part owner of the companies, Uncle Sam has a loud voice in the boardrooms.
Kiley is a senior correspondent in BusinessWeek's Detroit bureau.