The new cars going on sale this fall include a Ferrari, a Maserati and a Mercedes convertible. These alone would excite automotive enthusiasts, but the vehicles highlighted in this fall new car forecast also include nine American cars — so the kind of car nut who only buys American has reason to be happy too.
The next few months will be a good time in which to indulge yourself if you're planning to buy an expensive new car. Please see the slide show for some tasty options, and note that you can get scorching performance in many different ways. Want 400 horsepower? Just to point out two of the coolest new cars this fall, you could get a 400-hp V-8 from the elegant, exotic Maserati Quattroporte, or from that classic chunk of American muscle, the Chevrolet Corvette, which is fresh from an overhaul.
Plenty of cars that are coming out soon are not so cool, and we didn't cover them here. For example, Buick's new LaCrosse sedan looks more hip than your typical Buick, but one reader astutely points out that "the mechanicals are a good 15 years from being current: a four-speed transmission and a pushrod engine making not quite 53 hp per liter." (Compare this to, say, the Acura TSX sedan, a competitor that makes 83 hp per liter.)
Nor are we particularly excited about General Motors' forthcoming tetrad of similar minivans, the Buick Terraza, Chevrolet Uplander, Pontiac Montana and Saturn Relay. GM is calling these "sport vans" and imbuing them with styling elements from sport utility vehicles in an effort to disguise that they are actually vans. The results just look strange.
However, to see that several exciting new cars are on the way — or, like the new Hummer H2 SUT pickup, are already in dealerships — should make followers of the auto business happy, especially considering how things have been going lately. The industry ended the summer on a low note, as many manufacturers reported decreased sales in the U.S. in August. Some of the reasons for the slump were out of their hands, such as Hurricane Charley, which unsettled sales in the critical Southeast region.
This year's August sales reports also look worse than last year's because automakers will report Labor Day vehicle sales as part of their tallies for September, not for August as they did last year. But for American automakers, these excuses cannot mask larger problems in the way they operate.
In a recent report on industry sales, Merrill Lynch wrote that "August's sales are disappointing considering the high level of incentives, and more importantly, because of the need to clear out excess inventories." These problems are so significant that they prompted the report to conclude that "it is hard to argue for near-term support for auto stocks given the news flow (including oil, rates, economy and the election)."
Carmakers, of course, want support for their stocks, and as a result are scurrying to bring great new cars to market or, in the case of the American automakers, to bring lots of new cars to market. The slide show includes such eye candy as Fiat's new, $255,000 Ferrari 612 Scaglietti coupe, but it is dominated by offerings from General Motors and Ford Motor, and their subsidiaries.
In an effort to cling to its American market share — which is being gobbled up by Japanese automakers — Ford has proclaimed 2004 its "Year of the Car" (it is counting 2005 models launched this year in this hype), and the fall season will see some of the brand's critical new offerings, from high-volume vehicles such as the new Mustang sports car to the $140,000 GT supercar, which was designed to increase Ford's prestige by showing that the brand can run with Ferraris and Lamborghinis.
Ford's scheduled offerings in the next two months illustrate the two main themes among new 2005 models that are coming out before year's end. The first, as Ford shows by its eagerness to build an exotic car such as the GT, is that the market for expensive, elegant cars still seems to have plenty of room for new entries; you will find 15 cars in the slide show that follows, six of which are made by premium nameplates such as Audi.
The second major trend is that American automakers are preparing a blitz of new models to replace or supplement the ones in their current, underselling rosters. In fact, to get ready for its forthcoming vehicular outpouring, Ford is slowing production to get its factories ready to build the new models and to lower its existing inventories.
While Ford, like the other American automakers, wants to relieve its bloated stockpiles of vehicles, which are wasting away on dealers' lots, a high-volume car company under ideal circumstances does not want to keep production levels low. Factories that run at less than capacity are obstacles to profits, as are incentives that eat away at sticker prices.
The incentive-laden sales strategy of the American automakers has taken its toll since it came about in response to the sales drought after Sept. 11, 2001. DaimlerChrysler's Chrysler division lost $496 on every car it sold in 2003, compared with $48 at Ford. GM made a profit of $178 per vehicle, a measly total compared with per-car profits of $1,488 at Honda Motor, $1,742 at Toyota Motor and $2,402 at Nissan Motor.
GM may still sell more cars than any other automaker, but Toyota's market capitalization — the value of its stocks — is ordinarily about $80 billion to $100 billion more than its closest competitor. At press time, Toyota's market cap was $128 billion, compared with $26 billion at Ford and $24 billion at GM. We constantly hear talk on television about how the U.S. is the world's last superpower, but Toyota could buy this country's two biggest automakers — two of its biggest companies overall — without going to the bank.
This is precisely why American automakers are rushing new cars to market: They realize that the only way to counter the Japanese is by offering hot new cars. You will find five new models from Ford and its subsidiaries in the slide show, and four from General Motors. Whether they will excite customers is the key question, but the American automakers know that exciting customers must be their chief goal.
We're not sure if 2005 model cars will be remembered as significant changes for the industry, or if nothing revolutionary will come from them. After all, Ford may be introducing the GT supercar and an exciting overhaul of the Mustang, but it is also bringing out considerably more pedestrian offerings such as the 500 sedan and Freestyle sport utility. Will the balance of the new American cars be exciting enough? Customers, as they say, will vote with their pocketbooks.