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Detroit takes on Japan in 2004

Get ready for more in '04: more pick-up trucks, more tall wagons, more incentives, more high tech toys for the ride, and believe it or not, more cars.  By CNBC's Phil LeBeau.
Chrysler And Dodge Showcase Prototype Vehicles
The Big Three U.S. car makers are hoping new models like the Dodge Magnum will help reverse their loss of market share to Japanese car makers.Bill Pugliano / Getty Images file

Get ready for more in '04: more pick-up trucks, more tall wagons, more incentives, more high tech toys for the ride, and believe it or not, more cars.

”There's a lot of cars coming, a lot of activity,” said Kevin Smith at Motor Trend magazine. “And Detroit has found it does have turn it up a little bit."

Detroit is bringing back plenty of classic names, with all-new GTO, Corvette, and Mustang models. That's on top of new sedans like the Chrysler 300C and tall wagons like the Dodge Magnum.

It's all part of Detroit's plan to win back market share from Japanese automakers like Toyota and Honda, who have taken leadership in cars thanks to the Camry and Accord.

"As the Big Three are seeing more and more competition from the Japanese in light trucks, they have to shore up whatever they have left in the passenger car market,” said Michael Robinet, a market analyst at CSM Marketing in Detroit. “Thus you're seeing more attention to passenger cars from the big three."

The problem for Detroit is that it's pension and health care costs are so high, and it's quality reputation so low, that some doubt the new domestic cars will stop the Japanese dominance.

”Not only because they are not profitable now, but you have legacy costs from pensions, you have the perception of quality that's not as good,” said Kevin Tynen at Argus Research. “So you are fighting that battle on the cost landscape, but also on the quality landscape. And I don't think they can do it. I think the damage is done.”

With more than 50 brand new models hitting showrooms in 2004, the automakers will have to work harder to win over buyers. That means we're likely to see hefty incentives to prevent inventories from backing up.

And for the first time since 2000, the industry is expected to increase it's sales -- provided the economy and consumer confidence stay robust.

The red hot China market will still be hot topic in '04, and so will the growing market of gas/electric hybrids, with Toyota rolling out an SUV to compliment it's popular Prius.

“You're going to start to see the technology trickling into other categories, other cars,” said Smith. “And frankly, we're excited about it."

As for specific models, the industry will be watching Volkswagen's Phaeton to see if the people behind the bug can make a splash in the luxury segment. Will BMW's redesigned 5-series live up to expectations from the luxury automaker? And will Mazda finally get back on track with a slew of new models?

"You can not buy a boring Mazda in 2004,” said Jean Jennings at Automobile Magazine. “They are going show people what we mean by no boring cars."