Big 3 try to overcome gloom
Detroit automakers hope to wow the world at the 2008 North American International Auto Show next week with a slew of eye-catching concepts and hot new vehicles. But all the glitz and hype of the nation's pre-eminent car show won't change the stark realities facing the Big Three.
The hometown carmakers enter the year in a brutal fight for their home turf against foreign companies better prepared to weather an anemic U.S. vehicle market and potential recession. This could be a year in which Toyota Motor Corp. outsells General Motors Corp. worldwide and one in which foreign car companies sell more vehicles in the United States than the Big Three.
Much is at stake for GM, Ford Motor Co. and Chrysler LLC with important new products hitting the market as they continue to restructure. At the same time, all automakers are coping with shifting consumer attitudes about the kind of vehicles they want, new government regulations, growing concerns about the economy and sales that are forecast to be the lowest in a decade. A recession is obviously question No. 1 for the entire industry," said Paul McCarthy, an economist with PricewaterhouseCoopers LLP. "If it comes it comes. The big question is, what will it look like?"
By the end of 2007, the combined market share of Detroit's automakers had fallen more than 7 percent to barely half the U.S. market. Many industry experts predict Big Three sales in 2008 will slow further. Even fast-growing Toyota expects its sales to notch up only 1 percent, one of its slowest growth rates in years.
The tight market means carmakers will have to fight even harder for increasingly scarce consumers. The battle will be fought on all fronts, from fuel-saving hybrids to powerful pickup trucks to inspirational sports cars.
This year's show will be the greenest, with futuristic concept vehicles that run on hydrogen and gas-electric hybrid vehicles ready for the showroom today. But it will also feature a fair share of cars and trucks with the horsepower consumers still crave.
Ford and Chrysler's Dodge brand will come out with remakes of their critical full-size pickups, Ford's F-150 and the Dodge Ram. GM is rolling out a super Corvette, the ZR1, which will hit 60 mph in just over three seconds.
"The beginning of the year is going to be a tough challenge with the economic environment, gas prices and the housing market," Chrysler Vice Chairman Jim Press said last week. "That's going to pressure the industry in total to give customers better value, better quality and better vehicles."
Most in the industry agree U.S. auto sales this year will dip below the 16 million mark for the first time since 1998, putting continued pressure on automakers. The Big Three have been working to pare less-profitable fleets sales and costly incentives as a way to sell vehicles, so the down market could mean even further production cuts for U.S. factories. Detroit News