Can Detroit Be Relevant?

Can Detroit Be Relevant? http://wheels.blogs.nytimes.com/2008/01/11/can-detroit-be-relevant/?hp
This week, Rick Wagoner, chief executive of General Motors, was at the
Consumer Electronics Show in Las Vegas talking about driverless cars and the Cadillac Provoq, a concept vehicle powered by a fuel cell.
But bigger news came half a world away, at the New Delhi Auto Expo in India. Tata Motors was unveiling the Nano. Nicknamed the Peopleís Car, the Nano is a small $2,500 car that is expected to revolutionize the auto industry, in India, at least. Tata expects to sell 250,000 a year in its home country before export to other emerging markets begin.
Such is the new automotive landscape. Last year, the press made a big deal about Chinese automakers displaying at the Detroit auto show. Twelve months later, the Chinese will be back, but it is now business as usual. The Nano and the overwhelming hype surrounding it underlined a huge shift in the global auto industry. Whether or not the Nano is feasible as a global product isnít the issue. It just seems moreÖ relevant.
It is ironic that the two events Ė G.M.ís keynote in Vegas, which Mr. Wagoner boasted was the first of its kind, and Tataís in New Delhi Ė occurred on top of each other. And it is even more ironic that Tata usurped the hype with a small lo-fi car.
General Motors has long been criticized for its reluctance to build vehicles that are relevant in the world of rising oil prices and overall environmental awareness. G.M. has answered with a string of futuristic fantasies like the Provoq, but as the Nano has shown, the public simply wants small cars.
Some of the most popular cars in the marketplace are the Honda Fit, the Mini, and the Scion xB. This year, Smart starts selling the Fortwo in America. Even BMW is going small with the 1 Series.
But none of the American automakers seem committed to developing a proper small car for the United States, which is to say that they are ceding this entire segment of cars to foreign companies. The Chevrolet Aveo is a rebadged DaihatsuDaewoo. The Cobalt is a size bigger than the Smarts and Scions of the world. The Ford Focus that is sold in America hasnít changed in more than eight years, while those sold in Europe were completely redesigned in 2005. And when Chrysler ended production of the Neon, it didnít replace it with anything; the smallest Dodge, the Caliber, is a size up from the Neon. Detroitís lack of a truly competitive minicar is the elephant in the showroom. And the more Detroit boasts about fuel cell and hybrid S.U.V.ís, the bigger the elephant grows.
None of this is new news. It is just the current state of the automotive world as we approach the North American International Auto Show in Detroit, which opens to the press on Sunday. Although the Detroit auto show is the first in the calendar year, this year it actually arrives on the heels of several major shows going back to last September and the Frankfurt Motor Show, which was followed by Tokyo, Shanghai and now New Delhi. In other words, it has a few tough acts to follow.
So what can we expect?
Light trucks and S.U.V.ís will be plentiful. Ford, which will hold the first press conference on Sunday, has already gone public with information on the new Explorer America, which will feature EcoBoost, Fordís new turbo direct-injection engine. It is expected to increase fuel economy by 20 percent to 30 percent, depending on the size of the power plant. The Explorer America offers a choice between a 2-liter four-cylinder or a 3.5-liter V-6.
According to The Detroit News:
Over the next five years, Ford plans to make EcoBoost engines available on most of its products worldwide, starting with the Lincoln MKS sedan in 2009. The promise is a big one: up to 20 percent better fuel economy and 15 percent less carbon dioxide emissions than a standard engine offering the same horsepower. And unlike hybrids, EcoBoost promises to deliver these savings in both city and highway driving.
And, while Ford is not giving any specifics on the cost, the company says it will be nominal. Ford says that at current gas prices, EcoBoost will pay for itself in about 2.5 years, compared with more than seven for diesel and more than 11 for a hybrid.
Diesels will also have a strong showing in Detroit. Audi will introduce a diesel version of its R8 supercar, powered by a V-12 TDI turbo diesel. BMW will have an array of diesel vehicles, which it promises to have on sale in American by the end of the year.
There will also be performance cars, like the 620-horsepower Corvette ZR1 and the 500-horse Cadillac CTS-V, but the key to Detroit ó and what we will be keeping our eyes on ó will be how Detroit automakers intend to stay relevant in the widening world. So far, thereís no advance word on an American small car concept, though all three Detroit manufacturers seem to have something in the works. Ford introduced a small car concept in Frankfurt called the Verve and will have a sedan version of it in Detroit. General Motors recently announced that it was moving forward on the Beat concept car. And on Friday, Chrysler announced that Nissan would supply it with a small car to sell in South America.
But could they be too little too late?
--
Civis Romanus Sum

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Jim Higgins wrote:

Good overview of relevance.
The market will drive this. When the final crunch arrives, the most agile companies will survive.
The Beetle succeeded and the Prius succeeds, not because of 'relevance' but because of perceived self-image. Remember that the Beetle was replaced by the Range Rover as the 'image car.'
Today, it's the prestige of traveling in the HOV lane without a passenger.
Over seventy years ago, Will Rogers quipped, "... this country is going to the poorhouse; but, it is the first country that will go to the poorhouse in an automobile."
At that time, people looked at the "relevant" offerings (Willys, Crosley and the smallest Nashs and Studebakers). They voted with their pocketbooks in favor of larger cars from GM, Hudson, Packard, Chrysler and Ford.
My Dad grossed $185 a month in 1937. He needed a replacement car and stretched his budget to buy the largest new sedan he could afford. Later, he mentioned that he made the choice because he "...feared that the future would be devoid of large cars."
The next five years hold a lot of uncertainty. My close friends and children are *buying*:
1. Bulky beasts with high aero drag and enormous rolling friction. 2. High curb weight. 3. Sophisticated engine features, not in the name of efficiency but because they are impressive on a spec-sheet.
There is no longer a Prius waiting list where I live and lease terminations are plentiful.
Most of my friends and children verbally talk a good game of "green." They respond to surveys in favor of green. They fail to walk their talk.
Times ahead look uncertain to many Americans. That uncertainty leaves no garage space for a 'relevant' car. Detroit knows this.
Well on my way to octogenarian status, I feel secure in my belief that our citizens will not embrace a 'relevant' piece of iron until they are forced to walk to the bus and walk to the store. They will not walk to the poorhouse -- or ride there in a 'relevant' automobile.
Oh yeah, I'm one of those 'greenies,' complete with MBA.
-- pj
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mba with a minor in bs

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Sounds good but Americans aparently do NOT want small cars, even those Americans that are willing to spend more money to buy an import. If they did the Civic would outsell the Accord and the Corolla would outsell the Camry. ALL of which are larger, more powerful vehicles, than they were just a few years ago. Even Japanese SUVs and trucks are larger than just a few years ago.

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