US automakers polish their images at Detroit auto show

The fanfare comes after a year of dismal sales that forced GM and Chrysler to get $17.4 billion in federal loans to stay alive.

Ford Lincoln C 88 248 (photo credit: )
Ford Lincoln C 88 248
(photo credit: )
We're different, and our new stuff is really good. In a nutshell, that's what General Motors, Ford and Chrysler tried to tell consumers - and taxpayers - Sunday as they rolled out an array of new vehicles at the North American International Auto Show. They told their stories in different ways, with Chrysler LLC making its senior executives available to assure people that it remains a viable company. General Motors Corp. held a pep rally with hundreds of cheering employees and supporters who watched a parade of 17 new and upcoming vehicles. Ford Motor Co. emphasized its plans for electric vehicles, joining the list of automakers that have promised one next year. The fanfare, on opening day of the Detroit show's press preview, comes after a year of dismal sales that forced GM and Chrysler to get $17.4 billion in federal loans to stay alive. Ford doesn't need money now but says it might in 2010 if US sales don't improve. But industry analysts say the automakers could still be in trouble this year if US auto sales don't recover. Several are predicting annual sales of around 10.5 million - almost 6 million below 2007 levels - as consumers delay major purchases due to economic uncertainty. In the third quarter of last year, GM and Ford each spent more than $1b. per month above their income. On Sunday, the US-based automakers touted new products with a focus on fuel efficiency that they say will help return them to financial health and ensure that their cars and trucks will roll off assembly lines for years to come. GM said it would build a 40-mile-per-gallon (17-kilometers per liter) minicar for the US market, and it unveiled an electric-powered Cadillac concept car. Ford announced plans to put a battery-powered commercial van on the market in 2010, with an electric car coming a year later, followed by plug-in versions of its gas-electric hybrid vehicles in 2012. Chrysler showed off a sleek new midsize electric concept car called the 200C, and one of its executives said it could be the inspiration for a new midsize car to compete with Toyota's top-selling Camry. Chrysler CEO Robert Nardelli told reporters that while its key new products won't show up in dealer showrooms until next year, the Auburn Hills automaker expects to survive 2009 and remain an independent company. Yet many analysts say that because of Chrysler's 30 percent sales drop last year and 53% decline in December, and a model lineup that doesn't change significantly this year, the company will be forced to sell itself to another automaker or be sold off in pieces by majority owner Cerberus Capital Management LP, a New York private-equity firm. Chrysler vice chairman Jim Press said dealers are reporting they are losing 25% of sales in showrooms due to a lack of available credit and say sales will improve if credit loosens. He also said the December sales drop was due to an intentional cut in low-profit sales to rental-car companies and other fleet buyers. Nardelli said the company came out with the new Dodge Ram pickup, Journey crossover and Challenger sports car in 2008, all excellent products that should sell in a better economic environment. GM CEO Rick Wagoner said his company's restructuring plans submitted to Congress, which include concessions from the United Auto Workers union and other cost cuts, combined with GM's lineup of new products, will make the company prosper when the worldwide auto market recovers. "We'll be in a position to run the business at break-even or profitable at a much, much smaller industry than frankly a year ago that we ever felt would be possible to deal with," Wagoner said. The new vehicles GM introduced Sunday included the Chevrolet Spark subcompact, which was called the Beat when GM unveiled it as a concept car in 2007. The three-door hatchback with a 1.2-liter turbocharged engine is about the size of a Honda Fit or Toyota Yaris and is set to go on sale in Europe next year and in the US in 2011. GM also announced that the Chevrolet Orlando seven-passenger crossover vehicle will go on sale in North America that same year. But the surprise of the automaker's event was the unveiling of the Cadillac Converj concept car, which is designed to go 40 miles (64 kilometers) on electric power alone after being recharged from a standard wall outlet. A small gasoline engine would extend the range to hundreds of miles. It's the same powertrain technology GM is using in the Chevrolet Volt, a much-anticipated extended-range vehicle set to go on sale next year. GM's Wagoner said the Detroit automaker's vehicles are smaller, smarter and more fuel efficient, with "enough towing capacity" to pull GM out of its current troubles. Toyota Motor Corp. confirmed plans to have an all-electric vehicle on US roads by 2012, introducing an ultra-compact battery-powered concept car at this year's Detroit show. It also unveiled the 2010 Lexus HS250h sedan that will go on sale this summer. It's the first stand-alone gas-electric vehicle for the Japanese company's luxury nameplate. Honda Motor Co. unveiled its next-generation hybrid, the Insight, which will arrive in US showrooms in April. The much-anticipated car is expected to compete head-on with the Toyota Prius, which remains the top-selling hybrid in the US. BMW AG said it's ramping up its production of gas-electric hybrid vehicles, giving consumers hybrid options with the 7 Series and X6 crossover vehicle. Volkswagen AG showed off a concept sports car - the Bluesport - that is expected to get 55 miles per gallon based on clean-diesel technology, while Lamborghini showed off its new Gallardo LP 560-4 Spyder, which sprints to 62 mph (100 kph) in four seconds and gets 20 mpg (8.5 kpl) on the highway, respectable for such a high-end sports car. The 2009 Mini Cooper convertible made its global debut. The four-seater has a powered soft-top roof that allows the driver to open and close it while going up to 20 mph (32 kph).