Detroit auto show no party for US carmakers

By Tony Czuczka Jan 7, 2007, 9:07 GMT

Detroit - For the 100th Detroit auto show, don't expect US automakers to be the life of the party. These days, that distinction goes to Toyota Motor Corp and even the German car companies.

As manufacturers from Acura to Volvo put on the glittering annual show in the US automotive capital, Toyota is gunning to end General Motors' 75-year reign as the world's top-selling carmaker, while German firms say they booked record US sales in 2006.

Japanese competitors including Toyota and Honda Motor Co will use the forum of the Detroit show to push new models they hope can make further inroads against GM, Ford and Chrysler.

The renewed assault comes after Detroit's so-called Big Three saw domestic market share fall to all-time lows in 2006, while Japan- based carmakers boosted their combined share by 2.6 percentage points to a record 34.8 per cent.

Hybrid petrol-electric cars and ethanol fuel - promoted by US President George W Bush as an alternative to imported oil - are trendy again this year after oil prices temporarily surged above 70 dollars a barrel in 2006.

'Detroit 2007 will be something of a showcase for alternative engine types,' German auto analyst Ferdinand Dudenhoeffer said.

The show, open to journalists starting Sunday and to the public on January 13, will have plenty of impressive prototypes, pumped-up sports cars and high-end luxury roadsters.

Hybrids accounted for only 1.3 per cent of US car sales last year. But with expectations of a slowing economy and growing environmental awareness in the US, the Big Three have their work cut out for them.

Detroit has been hurt by relying for profits on once-popular, petrol-guzzling trucks and sport-utility vehicles, a reluctance to invest in alternative drive systems, a legacy of quality problems and high costs for retiree pensions and health care.

Many industry watchers believe that the future belongs to Toyota, which is expected to overtake GM in 2007 as the world's largest automaker and to pass Ford as the number two in US sales. In contrast, GM and Ford have lost billions and are laying off tens of thousands of workers in North America and closing plants.

German automakers are gambling on diesel cars, which are highly popular in Europe - where the fuel is significantly cheaper than petrol - but have never caught on in the US.

DaimlerChrysler's Mercedes-Benz brand, Audi and Volkswagen are promoting a common technology, and BMW is also looking to fire up Americans for diesel.

But the German giants are also pursuing hybrids. BMW and DaimlerChrysler have joined forces with GM to develop the technology, while Volkswagen has a project with some of its German suppliers.

German automakers estimate they sold a record 900,000 vehicles in the US in 2006, a 3-per-cent rise apparently paced by Mercedes. Still, the total is small in a new-car market of 16.5 million vehicles a year, and the stronger euro could hurt sales in 2007.