Washington - Detroit's annual auto show is usually a glitzy
affair and time of celebration for the US car industry, but not after
a year that saw car sales plummet to their lowest level in decades.
The North American International Auto Show, which opens for a
three-day media preview on Sunday, will see domestic and foreign
automakers unveil their latest US models amid an uncertain future for
the world's most lucrative car market.
US car sales tumbled dramatically in 2008. The outlook for 2009
isn't much better as the country weathers a sharp recession.
Consumers have struggled to get car loans and cut back sharply on
spending.
Through 2008, car sales fell 15 per cent to levels not seen since
the early 1990s. Over the last three months, sales dropped more than
35 per cent to their lowest rate in a quarter century. Most analysts
don't expect the market to pick up significantly before late 2009.
US carmakers have suffered most. High petrol prices over the
summer led consumers into the arms of competitors, mainly Asian
companies, with more fuel efficient production lines.
The recession means nearly all companies - foreign and domestic -
are scaling back their plans for Detroit's auto show this year.
Some top manufacturers, including Nissan Motor Co and Mitsubishi
Motors Corp, skipped the event altogether.
Others are cutting back on fancy exhibit costs: concerts and food
concessions have been slashed; General Motors Corp has cancelled the
fashion show it traditionally uses to unveil new models; Honda Motor
Co is foregoing the glitzy, high-tech press conference.
The economic crisis means the new models behind the show face a
rough ride in the coming year.
Detroit's iconic 'Big Three' carmakers - GM, Chrysler LLC and Ford
Motor Co - have shuttered production plants and delayed projects for
the future as they struggle to survive. GM and Chrysler were granted
an emergency 17.5-billion-dollar government lifeline last month.
Foreign companies aren't faring much better in the global
downturn: Japan's Toyota Motor Corp expects the first operating loss
in its history for 2008.
Yet many still see an opening in the US. Asian carmakers have been
steadily gaining market share over the last decade - they now make up
about 40 per cent of US sales - and continued to pick up steam this
year with greener models than their US counterparts.
Chinese carmakers will be on hand at the Detroit show for the
first time, while Japanese rivals Toyota and Honda will be unveiling
competing hybrid models that run on a combination of petrol and
electric engines.
German manufacturers see opportunities. Daimler AG subsidiary
Mercedes Benz will be bringing its own new luxury hybrid to the show.
Volkswagen AG has begun work on its first US-based production plant
in three decades.
Fuel efficiency and hybrid technology are the buzzwords at this
year's auto show, after a summer in which the price of oil topped 140
dollars per barrel.
Yet even sales of hybrids took a hit as oil prices plummeted by
more than two-thirds over the last few months. Sales of Toyota's
flagship hybrid, the Prius, dropped nearly 50 per cent in November.
The Japanese giant will nevertheless be unveiling its updated 2010
Prius model at the show, as well as a petrol-electric version of its
luxury Lexus brand.
Honda is hoping to make a splash with its new Insight, a cheaper
hybrid than the mid-size Prius, which commands about three-quarters
of all hybrid sales.
A smaller number of carmakers will be touting their plans for new
plug-in hybrids, which can run up to 80 kilometres on a battery-
powered electric motor alone.
China's BYD Auto, part owned by US billionaire investor Warren
Buffet, introduced the world's first mass-produced plug-in hybrid on
China's streets in December and hopes to one day make inroads into
Western car markets.
The BYD F3DM will be on hand at the Detroit show, but the company
said last month that it was delaying its US and European launches
until 2011.
BYD Auto is well ahead of its larger competitors. Toyota and GM
will be showcasing their own plug-in hybrid projects, which are only
slated for production starting in late 2010.
USA
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