The Big Three U.S. carmakers have been in firefighting mode for so long that it is easy to imagine they are doomed to eternal crisis management, like Sisyphus rolling his boulder up the hill, only for it to roll down again.
But even as they emerge from one of the industry's worst years ever, the companies have gotten more of their boulders to stay on top of their hills. That creates an opportunity for Ford and General Motors to go on the offensive in the U.S. market. (More about Chrysler in a moment.)
For example, at this week’s North American International Auto Show in Detroit, Chevrolet is showing the concept version of the replacement for its Malibu family sedan, a car that was named North American Car of the Year at the Detroit show just two years ago. The new model’s aggressively muscular appearance should help Chevy grow Malibu’s sales to legitimately challenge perennial midsize sedan sales leaders Toyota Camry and Honda Accord.
Ford revealed the overdue replacement for the Focus, the company’s compact car that was a sales hero during last summer’s "Cash for Clunkers" government subsidy program.
Meanwhile, Ford's current Fusion Hybrid grabbed the coveted Car of the Year award Monday while its Transit Connect took the honors as Truck of the Year. The Chevrolet Equinox was a finalist for the truck award.
That should be a nice morale boost for industry executives after a year that saw a humiliating government bailout of the industry and a trip through bankruptcy court for GM and Chrysler.
For years, maybe decades, domestic carmakers have introduced new models with the promise that this time, really, they have fixed the uninspiring driving characteristics, artless styling, indifferent quality control or any of the other plagues of problems domestic manufacturers have inflicted upon themselves.
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The big show in Motown
This situation reached a nadir with the introduction of the Dodge Caliber by comedian David Spade at the 2006 Detroit show. Promised by a Chrysler executive that the new Caliber represented real improvement over the outgoing Neon, Spade sniped, “Dude, its gotta be. It's a Neon.”
But for the 2010 show, Ford and GM are in the unfamiliar position of introducing improved replacements for already popular and respected models. For the first time in recent history, these new products will not be contending with the shoddy reputation of their predecessors, but will instead be able to build upon the success of current models.
“GM and Ford have been working for years on improving their product lineup," said Rebecca Lindland, director of industry research in the Americas for Global Insight. “Even if perception hasn’t changed yet, it does build momentum for them."
Chrysler’s role in the show is to unveil insignificant new option packages for existing models while the company’s new Fiat-installed overseers scramble to restart the company’s suspended new product development apparatus. The Fiat guys thoughtfully rounded up a Ferrari and a Lamborghini from other companies under the Fiat umbrella to add some spice to an otherwise unremarkable exhibit.
The shift by American consumers from trucks back into the cars they fled a decade ago represents an opportunity for domestic manufacturers to reclaim share in the car market, Lindland added. That’s because consumers who enjoyed their domestic SUVs are going to be easier to lure into a new Malibu than someone who already drives a Camry, she said.
“There is additional opportunity in 'conquesting' people from other segments,” she said, using industry jargon for converting customers from one brand or segment to another. “The most difficult is trying to get a Camry or Accord buyer out of that vehicle. A more vulnerable conquest is someone who is in an SUV or minivan they don’t need anymore.”
Cars aren’t the only area of opportunity because crossover SUVs are selling well too. Chevy’s Equinox crossover has been selling “off the truck,” with models snapped up as soon as they are hauled into dealers’ lots, say GM executives, so the company is introducing a top-of-the-line Denali version of the Equinox’s GMC cousin, the Terrain.
Ford’s Explorer was one of the last products in the domestic arsenal that enjoyed a large cadre of satisfied buyers and a healthy reputation for new models to build on, but the company was too slow in identifying consumers’ shift from traditional truck-derived SUVs to the more thrifty and comfortable car-derived crossovers.
Still, the name recognition that helps elect familiar incumbent politicians also could attract more customer notice for the new explorer, which features high-tech turbocharged engines Ford dubs “EcoBoost” that will give it the power of the old model, but with efficiency closer to that of a car.
Lincoln is refreshing its midsize crossover, the MKX, giving it angry front-end styling that matches the rest of the Lincoln product line and adding some industry-leading display, interface and control technology to the cockpit that has the potential to blow some of the dust off Lincoln’s stodgy image. The MyFord controls that replace the dashboard switches and knobs with touch-sensitive surfaces will surely play well in sunny Silicon Valley, but their practicality remains to be seen for gloved drivers in the chilly upper Midwest.
Cross-town rival Cadillac has long since made its image contemporary — a change reinforced by the new CTS-V Coupe introduced at the show — except for the lone holdout and darling of the snowbird set, the DTS. Cadillac is remedying that with the XTS, a new full-size front-drive sedan that brings more of the brand’s contemporary cues into a segment where such updates are commonly viewed with suspicion by tradition-minded buyers.
One existing product for which the promised appeal of the newly unveiled replacement could be met skeptically is Chevrolet's new small car, the Aveo. Two generations of Aveo have earned the model a reputation of being cheap rather than simply inexpensive.
The next Aveo was introduced in sporty RS trim, but even with that in mind, the car appears to be a significant step upmarket. The car that currently fails in comparisons with the likes of the Honda Fit could be a contender against respected models such as the Volkswagen Golf and Mazda3 when it arrives as a 2011 model.
One existing product for which the promised appeal of the newly unveiled replacement could be met skeptically is Chevrolet's new small car, the Aveo. Two generations of Aveo have earned the model a reputation of being cheap rather than simply inexpensive.
Chevrolet executives decided to retain the Aveo name despite its negative connotations because the company wants to use a single name worldwide for its models, and that name was trademarked in all the countries where GM plans to sell it, said GM Vice Chairman Bob Lutz.
With so many new products replacing already acclaimed and popular current models, 2012 could be a year when the domestic car industry enjoys success more reminiscent of its storied past.