The two-seater ‘fortwo’ Smart car
Stan Honda  /  AFP - Getty Images file
The two-seater ‘fortwo’ Smart car is due to go on sale in the U.S. in early 2008. Will it be a hit with American drivers?
By
updated 9/21/2007 12:44:04 PM ET 2007-09-21T16:44:04

Struggling automakers hope their 2008 offerings will lure buyers back to the showrooms — but only some models will be hits.

Car dealerships in the old days, come September, would put curtains in their windows while the new models were installed. There was so much public anticipation that crowds would encircle the stores waiting for the curtains to be pulled back and the doors unlocked.

Today, 2008 models have been dribbling into dealerships for the past few months, and pictures have been all over the Internet for most of the year. Though some of the romance of the new model year has, for consumers, gone the way of leaded gas and doctors making house calls, a new model year of possibilities is still hugely important to car companies. And a few are in dire financial need of their new designs' catching on with the public the way iPods and social networking sites have done.

General Motors, Ford, and Chrysler are especially hurting with falling market shares, and each quarter ranges from scant profitability to deep pools of red ink. The housing bust and credit-market swoon from subprime mortgage lending has already infirm car companies such as Ford and Chrysler looking at more difficult rehabilitations.

Meanwhile, Asian manufacturers including Toyota and Honda are the brands that seem to increase market share every month no matter what housing prices do. In uncertain economic times, brands trusted for reliability and above-average fuel economy are a hedge against recession.

But hope springs eternal for every automaker and car dealer in September. Consumers are back from summer vacation and ready, automakers hope, to replace the wagon, minivan or sedan, or perhaps add a sports car to the garage now that the last of the kids has been packed off to college.

As fuel prices promise to stay above $3 per gallon in most parts of the U.S., and threaten to climb back up to $4, the fastest-growing vehicle segments are small cars and car-based, crossover sport-utility vehicles, which are replacing the heavier and thirstier truck-based SUVs in many driveways. Luxury cars remain strong, as affluent buyers continue to buy premium vehicles no matter how their stock portfolios are performing.

General Motors is trying to mount a design renaissance, while German automaker Audi is trying to increase pressure on rivals BMW and DaimlerChrysler's Mercedes-Benz with new vehicles in niches it hasn't competed in before. Volvo has a new small car. Jaguar has ditched its bowler hat styling for a truly modern sedan. Honda is replacing the venerable Accord with a new design. The diminutive Smart car is readying its U.S. debut after a delayed launch.

Some of the new cars will flop and rely on big incentives to make up for what the designers left out. In many cases, new models carry the hopes of struggling car companies — Ford, GM, and Mitsubishi — in their trunks. Others, like models from Toyota and BMW, could probably sell themselves without benefit of a salesperson.

So what kind of year will it be for the auto industry and its customers? Click on the “Slide show” link above to find out how BusinessWeek’s Detroit Bureau Chief David Welch and Detroit-based senior correspondent David Kiley rate the 2008 model year cars.

Copyright © 2012 Bloomberg L.P.All rights reserved.

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