- The Washington Times - Sunday, July 15, 2012

DETROIT — Those who remember the Dodge Dart from the 1970s recall a briefcase-sized family compact that wasn’t cool but got you where you needed to go on a budget — a symbol of play-it-safe Detroit at its most uninspired.

During last week’s Major League Baseball All-Star Game broadcast, TV viewers were treated to a rebranding of the nostalgic Dart, replete with a cameo from NFL superstar Tom Brady and background music from hip-hop king Jay-Z. Definitely not your father’s Oldsmobile, the newly curvaceous Dart model starts out at a wallet-friendly $16,000.

The relaunch of the Dart as a sleek pocket rocket for hipsters and bargain shoppers encapsulates the ongoing rebirth of U.S. automakers, which have focused since the 2008-09 taxpayer bailout on changing American consumer attitudes by pitching value, dependability and at least enough head-turning potential to lure them away from successful foreign brands such as Hyundai and Toyota.

“They are really trying to get people to take a look,” said Peter De Lorenzo, a Detroit-based auto analyst who helms the website autoextremist.com. “Detroit automakers have had a special problem in that there is still a feeling out there with a large group of consumers that their vehicles are better but not quite good enough.

“In the heyday of the domestic auto industry, there wasn’t any competition. That has all changed,” he said. “The competition is at its most intense, and the battleground is for sales, but it’s also for market share. Everyone is scraping for every sale and percentage point of market share they can get their hands on.”

Incentives on the table

How much do they want new business? A host of incentives are on the table this summer, including General Motors Co.’s Chevy Confidence program, which allows new car buyers to return their purchase if they don’t like it after a couple of months. Those dreading a sales-lot experience opt for “no haggle” pricing for some 2012 models, a move used successfully with GM’s now-defunct Saturn brand.

At Chrysler LLC, similar deal-making plans are in place this summer. Those buying the new Chrysler, Fiat, Dodge and Ram Truck models can forgo payments for 90 days after purchase under one financing plan. Other models, such as the Chrysler 300C, come with a $3,000 cash-back offer. At Ford Motor Co., the one big U.S. manufacturer that did not need a federal bailout, a summer promotion promises cash back up to $1,750 or an interest rate at 0 percent for cars financed up to 60 months.

Sales hopes remain realistic, however, in a leaner industry. Chevrolet wants to hit a target of 5 million in sales for 2012, up from 4.76 million vehicles sold in 2011.

U.S. auto sales continue to be improving steadily since the bailout, an industry low point. Overall U.S. car sales rose 18.3 percent in June over the same period in 2011, according to motorintelligence.com. GM posted a 15.5 percent increase in vehicle sales, while Chrysler rose 20.3 percent and Ford was up 7.1 percent over last year.

“I think sales are going to continue to go up,” Mr. De Lorenzo said. “I think there is a lot of pent-up demand out there. A lot of consumers have sat on the sidelines since 2008 for financial problems. They have vehicles that are 4, 5, 6 years old. So I think the upward trajectory is going to continue for months for everybody.”

Auto analyst Rebecca Lindland, director of research for IHS, calls current marketing efforts “tricky” for Detroit’s Big Three, as more youth-oriented vehicle models such as the Dart hit the market and more older consumers are looking to buy cars. Finding the right mix of traditional advertising and digital also is difficult for auto marketers, she said, noting the volatile economic-recovery mood of the nation.

“The market is really tricky right now because the economy is sending us such mixed signals,” she said. “Consumers are sitting there with a 10-year-old car, and they know they need to replace it. They want to buy a car. But they are wary.”

Green technology blues

Although eco-friendly “green” technology continues to motivate automakers, its reception in the marketplace has been tepid, Ms. Lindland said. “We’re buying more 4- and 6-cylinder engines than ever before,” she said, with 8-cylinder models on a huge decline. “We’re seeing a tremendous amount of downsized boosted smaller engines, and all of that translates into fewer CO2 emissions.”

But, she added, “the problem is that there is a tremendous amount of perceived risk about the [electric] Volt and Leaf. Hybrids have never been a big part of the market, even though we have more available in the showrooms than ever before,” she said. “It’s because consumers say, ‘It doesn’t make economic sense for me to get a hybrid when I can get the car that I want with a 6-cylinder engine that doesn’t put the battery at risk.’”

The fortunes of the U.S. auto sales market could very well play into the presidential campaign narrative this fall, with President Obama increasingly taking credit for continuing the industry rescue started by President George W. Bush and reminding audiences on campaign stops of GOP rival Mitt Romney’s strong opposition to the plan at the time. Just last week, economic analysts said jobless claims in the latest reporting period were more positive in large part because of summer hiring plans by the automakers and their suppliers.

How the issue plays on the national scene is another question.

Mr. De Lorenzo said the issue may continue to inflame Midwestern voters, but may not garner much traction elsewhere. He said he is uncertain how the politics of the auto industry may play across the presidential election cycle.

“You get out of the Midwest, and it’s amazing how little people care about Detroit’s auto business and anything to do with it and how adamant they are that there shouldn’t have been a bailout,” he said. “Let’s not forget who really put this saving of the domestic auto manufacturers in motion. That was George Bush in the last two months of his presidency. Once the Obama administration got in there, they realized how serious it was and why Bush did what he did.”

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