2009 New York Auto Show: Trends
D-day for the automotive industry is just around the corner. Alliances are being formed in boardrooms worldwide as automakers do what is necessary to survive a completely unpredictable marketplace. Unlike previous years, monthly figures are the standard by which sales projections are made rather than quarterly. Should the current retail volume continue at this pace for much longer, don’t be surprised to see projection numbers recited on a weekly basis. Predicting the future even 24 hours out has become nearly impossible.
The potential merger between Chrysler and Fiat is on the verge of consolidation or collapse, depending on which pundit you subscribe to. Personally, I believe it has a better chance of success rather than failure. Fiat has the small cars and engines Chrysler needs to succeed in the 21st Century. The Auburn Hills, Michigan based company in turn possesses the dealer distribution network, (albeit smaller than before) Fiat requires to be successful in North America. Rolling out the Fiat 500C in New York was proof positive both companies want and need this to happen.
This is not to say a grouping such as this is a match made in heaven. The failed DaimlerChrysler experiment proved how wrong seemingly good mergers can be once they are put to pavement.
That said, looking at the future from today’s perspective, this merger appears to be a better fit overall and one that works equally well for both sides. The biggest stumbling block will be gaining the concessions required from unionized workers to accept significantly lower wages than current contracts demand. Without it, any deal is certain to stop before it starts.
General Motors is likewise rushing to make the changes necessary to survive.
At the start of the 2009 New York International Auto Show, Rick Wagoner, former CEO at General Motors was ousted due to pressure from the Obama administration. He has been replaced by his former vice chairman and chief financial officer Fritz Henderson.
In his current role as overseer, Mr. Henderson recently announced an additional 3,400 white collar workers will be laid off beginning the last week of April. Brands are being labeled as good assets; Chevrolet, Cadillac, Buick, GMC, or bad; Hummer, Saab and Saturn. Just how much a bad asset is worth on the balance sheet and whether or not its sale will cover the cost of pension liabilities and potential bankruptcy costs is anyone’s guess. But the fact everyone is talking about GM in terms of survival and not the new products introduced at the auto show in New York, is not good news.
With all the negativity surrounding two of the Big Three North American automakers and sales at lower than hoped for numbers around the world, what positive new trends emerged from the floor at the Jacob K. Javits Convention Center in New York? Contrary to what you may believe, not all is bad news. Here a few of the trends we see going forward in 2009.
Trend One
Automotive manufacturers with a vision for the future and a clear plan to achieve it are still more likely to succeed than fail. Ford, Hyundai and Kia are three prime examples of this seemingly simple philosophy.
The downfall of both General Motors and Chrysler is not because they didn’t understand what consumers wanted to buy in North America. Instead, they chose to ignore obvious trends and try to convince buyers their way was better; stick with big trucks and SUV’s.
By contrast, Ford took a look at the real market and understood small to midsize cars, plus reasonably sized and fuel efficient SUV’s and CUV’s was the real future. Taking the necessary steps, they are now poised to once again be a frontrunner in the marketplace. Their new products attest to this change in philosophy and people seem to be responding.
Free from the craving for false profits at the expense of the future, Hyundai is also in position to excel while other automakers are forced to retreat. The Hyundai Genesis sedan and Coupe, along with the Hyundai Nuvis Concept on display in New York offer proof positive the Korean automaker is on the right track.
Sister company Kia showcased the Forte Koup, a stylish, fun-to-drive competitor for the Scion tC and Honda Civic Coupe. With the best warranties in the business and rave reviews in the press, the old adage, “Give the people what they want”, still holds true today.
Trend Two
Plug-in electric vehicles are all the rage at the moment. Cleaner, quieter and more earth-friendly, they appear, on the surface at least, to be the future for automobile design and technology.
Save the environment and use less fossil fuel to power our automobiles is a mantra firmly entrenched in the automotive industry. This holds true even at a time when the supporting technology is not in place to handle the increased demand. Without enough electricity to power all the new vehicles currently in development, buyers are still being influenced to choose this alternative mode of propulsion. Will it work, or ultimately prove to be just another flash-in-the-pan idea is a question yet to be answered.
General Motors touts the new Chevrolet Volt due to arrive in approximately a year’s time as a savior for the entire auto industry. If they can survive long enough to show long term commitment to this project, they may be right.
Additionally, GM has joined forces with Segway to develop P.U.M.A., a two person urban transportation device powered by lithium-ion batteries. Looking somewhat like the front half of a Smart car, New York was the sight of its debut appearance and excitement seemed to be running high. Bike lanes and city streets may never be the same.
Mitsubishi announced the i-MiEV as an electric vehicle suitable for worldwide distribution. Previously, they were only committed to selling the i-MiEV in the home market of Japan. Capable of traveling up to 80 miles on a full charge, recharging takes 12-14 hours on a standard 110 volt outlet. Watch for this vehicle to arrive in North American sooner than later.
Trend Three
The more things change, the more they stay the same. In a world intent on bringing transformation to the automotive industry, big fancy cars with high-powered engines still thrill the soul and loosen the pocketbook. Prime examples of this never-ending trend in automobiles was the debut of the Spyker C8 Aileron, BMW X6 M, Land Rover Range Rover Sport, Nismo 370Z and Mercedes-Benz E63 AMG to name a few.
Horsepower is still king, but new ways are being found to enjoy the power but employ it a little more sparingly. Even the super elite car buyer wants to look green-friendly these days, so doing more with less is a definite key to success. No one wants to be perceived as being rich to the point of excess even if they are.
Summary
The 2009 New York International Auto Show draws to a close the major North American show circuit. The entire auto industry is in flux and the weeks and months ahead promise to be anything but boring. My hope is the struggling automakers will come out this leaner, greener and when it comes to horsepower, meaner. Next up is the 2009 Frankfurt Motor Show in September. We’ll be there with full coverage to bring you all the latest news.
