Video: Creative car concepts

By Phil LeBeau
CNBC
updated 4/12/2006 10:06:45 AM ET 2006-04-12T14:06:45

What can Detroit do to get back on top? What it’s all about is being the market leader, whether that means coming out with the newest technology or a new segment.

A lot of people criticize General Motors Corp. for its gas guzzling Hummer line. But whether it is the H3 or a more advanced version of the Hummer, the bottom line is this – you want to be a market leader even in large SUVs like the Hummer.

When you think about it's pretty simple -- build the first car with a breakthrough design or feature, get credit as an industry leader, and ride that innovation to the bank. Ford Motor Co. did it in the 1960s with the Mustang, Chrysler did it with the minivan in the 1980s and Toyota is doing it today with hybrids.

Who do the Big Three need to do to be market leaders again? Start by giving buyers true value, not just a lower sticker price.

Chrysler's 300c, starting in the mid $20,000, is a perfect example. “They came up with a car that looked so good that people were willing to buy it, even though they weren't sure about Chrysler quality, and they gave it a price that is similar to what a comparable Japanese car would be,” said Mark Phelan of the Detroit Free Press.

Next, Detroit increasingly must be the first to market with innovative technology and superior features.

In the late 1990s the Asian automakers won over buyers looking for better fuel economy and more torque by putting multi-valve six cylinder engines in their cars. Meanwhile, the Big Three idled, waiting to see if the move would pay off.

So why are U.S. automakers sometimes slow to adopt the latest technology? In a word: money.

“They know, make cars of higher quality, but often that higher quality costs more money, the price in the market doesn't go up, but the costs do, they can't afford it, but the competition can,” said Jim Hossack of AutoPacific.

Slideshow: Auto show highlights The Big Three are not at a complete disadvantage .Take trucks SUVs -- Detroit's best segment for years. Yes, the Japanese now sell more profitable trucks than they did, but Ford, GM and Dodge, still sell 93 percent of the pick-ups in the U.S. So it’s no wonder GM is spending millions to upgrade interiors of its trucks and SUVs, like the Chevy Tahoe.

“GM has more or less dropped a bomb on the competition and made it clear it will not lose its position as a leader in full frame SUVs and pick-ups,” said Michael Robinet of CSM Marketing Worldwide.

But cars are another matter. Regaining sales momentum is tough but not impossible. Nissan did it in the late 1990s and Chrysler a few years later. In each case the recipe was the same: be early to market with hot designs, top technology and true value for money.

As much as anything, that is the recipe for saving America's auto industry.

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