Detroit auto show tries to regain glory
TRYING to reclaim its past glory as the world’s preeminent event, the Detroit auto show kicks off on Monday with shiny, new cars displayed against the industry’s gloomy outlook.
American, Asian and European auto makers will try to ramp up the excitement, showcasing their latest offerings at the event starting next week at the massive Cobo convention centre in downtown Detroit.
But several major brands were skipping the show altogether, while others were reducing their presence – something unheard of in years past when the event was impossible to miss.
And analysts said they expect few headline-grabbing announcements.
The dwindling interest was expected to bring a subdued air to the annual gathering organised by North America’s car dealers, which are fresh off a year of sales growth but facing what analysts expect will be a gloomy 2019.
“The Detroit show historically included great anticipation around new products, designs, features and power trains. This year? Not so much,” industry analyst Adam Jonas of Morgan Stanley said in an investor note.
Not only are American car makers reducing their footprint at the show, major German manufacturers, with the exception of Volkswagen, will be completely absent.
The show has been losing a battle with a far bigger and more enticing conference held in Las Vegas in January – the Consumer Electronics Show (CES), where car makers have been making important announcements in recent years.
And an economic slowdown in China is threatening consumer spending on big-ticket items, while rising US interest rates and car prices are making monthly payments more expensive and new cars less attractive.
North American consumers have been on a car buying binge for several years, but even here the makeup has changed, favouring trucks and SUVs with dwindling sales for smaller models.
Sales rose 1.8 per cent in 2018 compared to the previous year, for a total of 17.3 million vehicles. But sales growth last year was helped by massive US tax cuts and those effects are expected to wane this year, said Jonathan Smoke, chief economist for Cox Automotive.
“While 2018 was a very strong year for both the economy and vehicle sales, it will be nearly impossible to repeat,” Smoke said in an analysis.
As a result, car makers were expected to pull back spending. Some could examine the need for plants producing out-of-favour small cars and sedans, said industry analyst Jessica Caldwell of Edmunds.
GM already announced plans for plant closures and layoffs, and could slash costs further. Ford also plans to reduce its global workforce, and other major brands could be next. Tens of thousands of jobs are at stake around the world.
‘Less exciting’
Perhaps a symptom of the Detroit show’s fall from grace, the GM conference, traditionally held at the auto show ever year, will instead be in New York.
The Detroit auto show “has become less exciting, it is not the highlight of the auto shows anymore”, Caldwell said.
“There is no big marquee product that everyone will be talking about.”
However, Ford and Germany’s Volkswagen are expected to announce a strategic alliance, including autonomous and electric cars, at the show on Tuesday, a source familiar with the matter said.
That alliance between auto giants will be closely watched, especially after Ford’s decision last year to phase out many sedan models in North America.
Organisers are moving the Detroit show to June, hoping it will help revitalise interest. This year’s 30th anniversary gathering will be the last held in winter.
The show still attracts nearly a million people every year, and organisers hope to build on its popularity.
Brian Moody of the car search site Autotrader says the Detroit auto show is still relevant, because it is where the most consumer-ready technologies are revealed.
“They are going to display technologies that have a little more practical usages,” Moody said. “It’s the kind of things that you can see and have today.”
The North American International Auto Show opens Monday in Detroit – first to the press, and then to the general public January 19-27.