The Detroit auto show is rarely a frugal affair. Costumed dancers, spectacular pyrotechnics and the hottest celebrities all have been used in years past by automakers hoping to make a splash launching their newest vehicles. The no-expense-spared spectacles on the many stages of the city's cavernous Cobo Center often have had the grandeur of full-scale Broadway productions.
Not this year. With the industry in financial dire straits, visitors can expect a new sense of austerity. Instead of business as usual, there will be a more businesslike atmosphere, according to Joe Serra, a senior co-chairman of the industry's premier North American event.
“Instead of all the glitz, glamour and pizzazz this year it’ll be all about getting down to business,” said Serra. “We’ll see less of the frills we’ve seen over the years and more of a business climate, a ‘rolling up our sleeves and going to work’ type attitude.”
Detroit’s newfound rigor is understandable. Any costly spectacles from General Motors and Chrysler could draw harsh criticism after the two automakers got $17.4 billion in emergency federal funding just before Christmas to keep them out of bankruptcy.
The trade show comes hard on the heels of evidence that the worst is far from over for the world's automakers. On Monday manufacturers reported U.S. sales plunged 36 percent in December from year-earlier levels, capping a truly dismal year.
And the Big Three U.S. automakers are hardly out of the woods, even after their hard-won federal bailout package. Chrysler in particular appears unlikely to survive as an independent entity despite $4 billion in federal aid, analysts say.
Even mighty Toyota is reeling, reporting its first operating loss in 70 years and ordering an unprecedented 11-day production halt in Japan.
But automakers — at least the ones who show up — will do their best to put a brave face on things as the century-old North American International Auto Show opens to the media Sunday.
The most significant no-show this year will be Japanese automaker Nissan, which pulled out of the show in November. Rival Honda has said it won’t hold any news conferences but does plan to relaunch its Insight hybrid, a competitor to the hugely popular Toyota Prius. Toyota will respond by showing a redesigned 2010 Prius.
The no-shows leave room for two Chinese automakers — BYD and Brilliance — to set up on the main show floor for the first time.
Much of the excitement at this year’s show will be hybrid gas-electric vehicles, which make up less than 10 percent of the current market. Aside from the established names in the space, China's BYD is expected to get into the game by showing off its plug-in hybrid F3 DM sedan.
Ford plans to display its 2010 Ford Fusion hybrid, which the automaker is touting as the nation’s most fuel-efficient midsize car, beating the Toyota Camry hybrid with an EPA rating of 41 miles per gallon in the city and 36 mpg on the highway. (The Camry hybrid manages only 33 mpg in the city and 34 on the highway). The Fusion hybrid debuted at November’s Los Angeles auto show and is set to go on sale in the spring.
“It’s ironic that all these hybrid vehicles are coming when gas in Detroit could be as low as $1 per gallon,” said Jack Nerad, market analyst at Kelley Blue Book, a resource for new and used vehicles. “But that’s what has been both fascinating and frustrating for car companies this year. They’ve had to deal with big swings in fuel prices. We’ve seen demand for hybrids go up as fuel prices have soared, and vice versa. People have short memories when comes to that sort of thing, so it’s a moving target for the automakers.”
With Japanese automakers pulling back on their offerings in Detroit, most of the focus at the show will be on GM, Ford and Chrysler, noted Nerad.
Among the most talked-about vehicles from Detroit's Big Three will be crossovers like the 2010 Chevy Equinox and Lincoln MKT, the redesigned 2010 Ford Taurus and the Cadillac CTS coupe. Chrysler will show a handful of electric vehicles first unveiled to the media last September.
“The Ford Taurus is a legendary name with a lot of brand equity, so that introduction will be closely watched,” Nerad said. “A show of strength here on the part of the Detroit automakers is critical right now because of the crisis of confidence they are experiencing.”
Other vehicle introductions of note in Detroit this year include a battery-powered concept car from Toyota, Kia’s Soul crossover, Subaru’s Legacy sedan concept and the 2010 Toyota Tundra pickup. However, this year’s crop of new vehicle offerings is not as strong as those of previous years, said Nerad.
“Hopefully, this is a sign that we are near a bottom in the industry as opposed to there being worse to come,” he said. “In my 30 years of experience in this industry I know it’s cyclical, but this is a harsher downturn than most."
Despite the industry’s severe problems, Nerad is still upbeat about this year’s Detroit auto show.
“I’m looking forward to it,” he said. “I think it will be the most fascinating show I’ve ever attended, and I’ve attended scores of them now, precisely because of the unique time in which we live. A lot of people in the car business have been really shocked by the industry’s downturn over the last few months, and they’ll be doing all they can to shake it out of its doldrums.”