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Ring the bell: auto school is back in session. With Labor Day and the flip of the calendar, manufacturers and dealers are turning away from sometimes painful summer incentives toward new models, which will be—they hope—more exciting to consumers and easier to sell. That's right, the 2007s are coming to town.
The volume of new cars and significantly redesigned vehicles is higher than ever in all segments from ultraluxury supercars to the smallest, most affordable consumer fare. But some notable trends stand out from the fall's new cars and trucks.
As consumers bail out of the midsize-SUV market for vehicles with better fuel economy, domestic manufacturers are looking desperately to crossover vehicles for relief. To varying degrees, crossovers provide the utilitarian benefits of traditional SUVs, like four-wheel-drive and increased passenger and cargo room, with the fuel economy of smaller sedans, on which their platforms are commonly based.
Ford (F), for one, is desperate for its upcoming Edge to help stop the hemorrhaging caused by the rapid decline in sales of its once popular but thirsty Explorer SUV (see BusinessWeek.com, MM/DD/YY, ). Sales of that vehicle have tanked, dipping more than 50% between June and July this year. That's creating a lot of pressure for the new, pump-friendly models.
Luckily, Ford affiliate Mazda is already selling a similar vehicle, the CX-7, which combines the stance and volume of an SUV with the fuel economy of a car. That model has garnered considerable amounts of critical approval but it's too early to tell if it'll hit the mark in a big way with customers.
General Motors (GM), meanwhile, is preparing three new, greatly anticipated crossovers. The GMC Acadia, Buick Enclave, and Saturn Outlook will take on similar-size import vehicles. (see BusinessWeek.com, 8/16/06, "GM's Hot Models") Analysts expect these cars to begin competing at last with Japanese vehicles like the Honda Pilot and Toyota Highlander.
Surprising to some, DaimlerChrysler (DCX) is planting its crossover flag most firmly in its Jeep family of products. Skeptics point out that Jeeps have always featured the most robust four-wheel drive, a possible point of discord with underlying crossover platforms. But the upcoming Patriot crossover—the design of which harkens back to one of the company's most popular vehicles ever, the Cherokee—still manages to earn the company's coveted Trail Rated badge.
Hybrid powertrains continue to branch out into new vehicle classes at widely diverging price points. If anything, 2007 could be a test of hybrid technology's popularity once it moves out of small niche markets like the one occupied by the seminal Toyota Prius (see BusinessWeek.com, 1/9/06, "Invasion of the Hybrids")
Hybrid sales leaders Toyota (TM) and Honda (
>HMC) have already introduced mainstream versions of their Camry and Accord sedans that are now available to the public at large. But Toyota has been aggressively pushing hybrid technology. The company projects that sales of the hybrid version will eventually make up 15% of all Camry sales, an important target for the country's most popular family sedan.
Toyota's Lexus luxury division is also selling the most expensive hybrid vehicle yet, the GS 450h. The sedan costs $55,595 and seems to make no compromises to be green. Its 3.5-liter V6 pumps out 340 horses and zips from zero to 60 in a blistering 5.2 seconds. Still, will customers pay a premium for the whiz-bang technology underneath?
At the opposite end of the spectrum, GM is toting the Saturn Vue Green Line, which it says is the least expensive hybrid SUV on the market at less than $23,000. Although that model doesn't yet don the restyling of the Sky, Aura, and Outlook, it does provide combined fuel economy of nearly 30 miles per gallon, about 20% better than the standard gasoline version.
While Mercedes-Benz has partnered up with BMW and GM to produce advanced two-mode hybrids eventually, it continues to push clean diesel technologies. The new E320 BLUETEC sedan is being heralded as the cleanest diesel ever.
Unfortunately, the model isn't, as the maker had hoped, eligible for sale in all 50 states. Mercedes says it's working on a solution to that problem and that the E320 will still go on sale in the meantime.(see BusinessWeek.com, 6/29/06, "Distinguished Diesel")
Of course, all-new vehicles are common attention grabbers as well. Volkswagen's Eos convertible nabbed gobs of attention when it was shown as a concept three years ago. Now the production version is creating a stir with its retractable, folding hard top like those in more expensive luxury drop-tops but for under $30,000.
Slightly more mundane, if still important, Acura's new RDX and Saturn's Aura fill important roles for those companies' lineups. The RDX will go up against BMW's X3 small, premium crossover and upcoming challengers from Land Rover and Audi. The Aura, meanwhile, is tasked with re-engaging potential Saturn customers who've been turned off by years of clunky design.
Performance Still Matters.
As important as mainstream sedans and crossovers are, the market for luxury, performance vehicles continues to grow. Manufacturers commonly provide larger engines or boost performance when a model is doing well. This year is no different.
In the small, performance-sedan segment, Nissan's (NSANY) Infiniti division is getting ready to launch a redesigned G35 sedan to take on German fare like the dominant BMW 3-Series. BMW itself is busy preparing a convertible version of its speed-demon M6 sedan. And VW's Bentley über-brand is also readying a lusciously appointed convertible version of the stately Continental.
Despite the overall shift towards smaller, more fuel-efficient vehicles, it appears there are still gains to be had from making certain models bigger. Chrysler, for one, will stretch the popular 300 sedan by six inches, creating a Long Wheelbase version that may help continue the model's momentum. Expect a spate of 300 mini-limos and specialty taxis shortly after it goes on sale.
Jeep and Toyota are also working on larger versions of popular models. Jeep is expanding the Wrangler, upscaling the model with two additional doors. Taking a page from domestic manufacturers, Toyota is busy supersizing the next version of the Tundra pickup truck, preparing it to do battle with Ford and GM's larger, more powerful offerings (see BusinessWeek.com, 2/9/06, "Toyota's Tundra Thunders In")
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