As Detroit struggles to right its financial ship, one bright spot in the Motor City lies under the cavernous roof of the Cobo Center, where this year’s North American International Auto Show is sparking much-welcome optimism.
As world press and global analysts gather this week for the annual spectacle, pumping dollars and publicity into worn-down Motown, a comeback is afoot for U.S. automakers after years of gloom. Industry analysts are cautious, but say Detroit’s renewal is more than industry hype.
“There is definitely a feeling of looking forward. The last few years have been very tough and there was definitely a cloud over events here,” said Rebecca Lindland, director of automotive research at IHS Global Insight, as she prepared to enter the auto show Wednesday morning.
While the big debuts of products remain less frivolous than in years past, “there is much more excitement and much more of a sense of positive energy coming though this year.”
After a week of media and charity previews, the show opens to the public Saturday as a key event for a city facing the prospect of state economic takeover after years of fiscal woes and government malfeasance.
“As you look at these breathtaking new vehicles, I ask you to remember that they represent more than creative thinking and brilliant design. They represent the fact that American manufacturing and American industry is back. And they represent another proud chapter in America’s history - a story about picking ourselves up and dusting ourselves off. A story about digging in and refusing to give up,” said Transportation Secretary Ray LaHood, visiting from Washington on Monday to open the show with patriotic praise.
In 2011, the Detroit auto show brought in about $350 million. Every show brings a host of welcome temporary jobs, offering a boost for some workers who energetically shine gleaming bumpers, polish sleek windows and set up glam-techno displays for brands as varied and international as Audi, Mini and Tata, which has headquarters in the Indian city of Mumbai.
More than 5,100 media credentials were handed out for last year’s show, when 53 vehicles were introduced to more than 735,300 attendees. This year’s show, which is projected to beat 2011 expectations in spectators and interest, already has crowned its stars. Just as Range Rover’s Evoque and Hyundai’s Elantra won truck- and car-of-the-year honors from a panel of 50 voting auto journalists, Detroit’s Big Three automakers also have rolled out their stars.
Among those earning debut buzz are Ford’s suburban chic 2013 Fusion midsize sedan, Chrysler’s sporty Dodge Dart, a nostalgic rebirthing of the ‘60s- and ‘70s-era compact, as well as General Motors’ Buick Encore in the crossover segment and Cadillac’s ATS and XTS in the premium luxury categories.
“It’s a nice combination of vehicles,” Ms. Lindland said about the offerings reaching the market for 2013, adding that the “lineup [is] expected to usher in modest but important growth in the year ahead.”
“We certainly have the expectation that they will be able to gain market share,” she said, noting sales projections of 13.5 million units overall this year compared with 12.7 million units in 2011.
“When we look at the Big Three, we are expecting positive results from all three manufacturers,” she said.
According to the Center for Automotive Research in Ann Arbor, Mich., an estimated 167,000 U.S. jobs should be added in the automotive sector through 2015, about 30,000 of which would be added by Detroit’s Big Three. In addition, projections of annual sales suggest that GM surpassed Toyota and Volkswagen as the largest automaker in the world for 2011.
Mother Nature played some role, with Japan’s earthquake and resulting tsunami in March, along with floods in Thailand, hurting Detroit’s biggest Japanese rivals.
“To be fair, the Japanese manufacturers, Toyota and Honda in particular, had tremendous supply problems and with their supplier network,” said Detroit-area auto analyst Peter DeLorenzo of autoextremist.com.
But, Mr. DeLorenzo noted, that is not the whole reason for the U.S. companies’ 2011 surge.
“However, both of these companies were starting to struggle long before the earthquake happened. This is something the U.S. car companies have taken advantage of - the timing worked out for Detroit car companies in that they had new products, whereas Japanese car companies had a bunch of basically stale product. Detroit has exploited that,” he said.
Mr. DeLorenzo praised design and overall efficiency, noting that U.S. automakers are “leaner and more focused.”
“They know what they have to do. It’s just up to them to execute,” he said. “I actually think that Detroit will continue to gain market share and show gains and I really think they aren’t going to lapse back into their old ways. I think they finally understand and they have gotten the message.”
One challenge for U.S. and global auto companies is convincing consumers that green technology is a good investment. Even after a decade of Toyota’s Prius and the entry of such newer models as Nissan’s Leaf and GM’s Volt into the marketplace, the public has resisted environmentally friendly cars.
“We saw hybrid sales really struggle in 2011,” said Ms. Lindland, noting that those vehicles claimed 2.1 percent of market share in 2011, down from 2.4 percent of the market in 2010.
“Some of that was due to Prius and lack of availability, but the reality is there are 29 other types of those vehicles that consumers could buy and they didn’t buy those when the Prius wasn’t available,” she said. “I think hybrid technology continues to struggle, but it’s here to stay because of fuel economy standards, which are ever toughening. The struggle is to get consumers to want these products as much as manufacturers need them.”