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Cars take lead in '04

Big 3 prep lineups for big comeback in passenger market

By Eric Mayne, and Christine Tierney / The Detroit News

DETROIT — The glory days of the American passenger car are long over, swamped by a tide of Japanese models over the past 20 years.

But Detroit automakers are finally loading up to fight back — and the proof is in their 2005 product lineups.

After years of major investments in their core pickups and SUVs, Ford Motor Co., General Motors Corp. and DaimlerChrysler AG’s Chrysler Group are making cars the top priority again.

“In the ’70s and ’80s, we gave up a lot of passenger car market share, a gift that’s still giving us many unhappy returns,” said GM North America President Gary Cowger. “We not only intend to maintain our lead in trucks, but to reclaim lost ground in cars as well.”

The renewed push will unfold beginning today during media previews of the North American International Auto Show:

* Ford plans to unveil the Ford Five Hundred, an eventual successor to the aging Taurus, along with an all-new Mustang coupe, and a high-performance Shelby Cobra concept car. Mercury will also get a new midsize sedan — the Montego — to be shown later.

* Chrysler’s debutantes will include the formal unveiling of the rear-wheel drive 300 series sedans, a Dodge Magnum wagon and a Chrysler concept supercar.

* Tonight, GM will take the wraps off the 2005 Chevrolet Corvette, the sixth-generation version of the legendary American sports car. And on Monday, GM’s Pontiac division will show a replacement for the venerable Grand Am renamed the G6.

North American International Auto Show

Detroit’s automakers desperately need to spruce up their neglected passenger car lineups because they are losing their longtime monopoly on profitable trucks and SUVs — now under assault by Asian and European rivals.

It may be the last chance for Detroit automakers, which have already been forced to drop such brands as Oldsmobile, Plymouth and Eagle that depended heavily on car sales.

It will be hard for Detroit to reverse the long slide in share of the U.S. passenger car market, which now stands at less than 50 percent. American consumers have been won over by the reliability of Japanese stalwarts, such as the Toyota Camry and Honda Accord. And in recent years, European and South Korean brands have chipped away at Big Three car sales with the Volkswagen Passat, Beetle and Hyundai Sonata.

And Detroit has tried and come up short before.

The Dodge and Plymouth Neon initially spooked many Japanese automakers, only to wither away. A complete overhaul — including new nameplates — of its car lineup was not enough to save Oldsmobile. More recently, the Ford Focus drew raves from critics but ultimately fell short of expectations and has been dogged by quality glitches.

“We know we face an uphill fight to regain passenger car share lost to the Japanese over two decades,” Cowger said.

But the companies are showing determination and renewed confidence.

GM made it a point to show the new 2005 Chevy Cobalt - a small replacement for the Cavalier — at the Greater Los Angeles Auto Show in southern California, where foreign brands have dominated the market for years.

And there are new signs the Big Three are making progress.

In its latest issue, Consumer Reports, a frequent critic of Detroit cars, gushed all over the new Chevrolet Malibu, though Chevy still has to sell it at a price thousands of dollars below the top-selling Accord and Camry.

“This is the first time in recent years that we’ve seen a relatively inexpensive domestic V-6 model score as well as some of the high-rated import-nameplate cars,” the influential magazine said. “It is now a competitive alternative to the top-rated cars in the family-sedan class.”

Analysts are impressed, too.

“Ford and General Motors are coming out with what appear to be much, much more competitive models,” said Brian Walters, senior director of vehicle research at J.D. Power and Associates, a market research firm.

Chrysler also bears watching, he said.

Benefiting from technology and engineering resources from DaimlerChrysler’s Mercedes-Benz division, Chrysler will reintroduce smooth-handling, rear-wheel-drive large cars such as the Chrysler 300 Series sedan — with an option for a powerful Hemi engine.

“It’s the first time we’ll have a car that truly competes with the top Japanese cars,” said Alan Helfman, general manager of River Oaks Chrysler-Jeep in Houston. “In the last few years, we didn’t have anything that could compete.”

Already, GM’s success in reviving the Cadillac brand has proven that it is possible to polish a brand’s image and inject momentum.

But even with their hot new models, U.S. automakers may find it hard to recapture lost customers. In the past 20 years, their combined share of the U.S. passenger car market has plunged from 74 percent to 45 percent, according to WardsAuto.com.

The underlying trends are even more alarming: About one-fifth of domestic-branded cars are sold at cut-rate prices to rental companies and other fleet users, while foreign makes dominate the lucrative premium and luxury car segments.

In addition, every automaker is now vying for a bigger slice of a shrinking pie. Cars sales now represent just 47 percent of the U.S. market — down 2.5 percentage points compared with 2002, while minivans, pickups and SUVs now account for 53 percent of the market.

Detroit’s automakers have allowed rivals to steal car business. In the 1990s, they focused on high-margin sport utility vehicles and pickups and did not invest sufficiently in less-profitable cars.

U.S. automakers have also been slow to tap into the design and car-making expertise of their foreign partners. Only now, for instance, is Ford leveraging its relationship with Mazda, while GM is tapping its Saab unit.

“GM and Ford have not introduced a lot of totally new cars in the past six, eight years,” Walters said. “They’re in catch-up mode.”

And the best way to play catch-up is to catch the eye. Under the direction of design chief J Mays, Ford has identified the look of its future cars. “I call it urban toughness,” Mays said.

Expect Ford products to reflect the brashness that inspires hip-hop culture, he said.

“Hip-hop is here to stay,” he added, noting the genre’s appeal has grown well beyond its urban roots, catching on even in America’s rural communities.

Not to be outdone, Chrysler’s new cars will be “out on the edge,” said Steve Bartoli, vice president of product strategy and business development.

When Chrysler CEO Dieter Zetsche arrived in Detroit in 2001, one of his first objectives was to revive the Auburn Hills automaker’s tired car lineup. He argued it was too risky over time to focus just on Chrysler’s strongest products: minivans, Ram pickups and Jeep Grand Cherokee SUVs.

With Chrysler’s flagship 300 Series sedan and Dodge Magnum wagon, the company is serious about investing in its cars. “Those will be real cornerstones for the company,” Zetsche said.

Bartoli said the automaker will make sure that its new cars have “something that the Japanese just don’t have” — for instance, the powerful Hemi engine, an option on the 300 Series sedan and the Dodge Magnum.

Still, Detroit brands must deliver big improvements to erase the mediocre quality image and beat back Toyota Motor Co.p. and Honda Motor Co.

Toyota sold more cars in 2003 in the United States than Ford, and more than twice as many as the Chrysler Group.

Only one U.S. brand made it into the five top-selling cars through November — the Ford Taurus, ranked fourth after the Toyota Camry, Honda Accord and Toyota Corolla.

Toyota and Honda “develop vehicles that tend to have wide appeal to get their sales volume,” Walters said. “They develop a vehicle that won’t offend anybody.”

Take the Camry. “It’s an attractive car to a lot of people,“ he said. “It’s not an exciting car to a lot of people.”

Detroit’s automakers fret that they have improved their quality but are not getting any credit for it.

“The fascinating question is why it’s taking the public so long to realize this,” Cowger said. “While reality always lags perception, we believe that, as more people experience our vehicles, the quality and dependability gap will close.”


You can reach Eric Mayne at (313) 222-2082 or emayne@detnews.com.

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Sunday, January 4, 2004


Ford unleashes a product 'tsunami'


By John McCormick / Special to Autos Insider




DETROIT -- Stressing the sheer breadth of Ford Motor Co.'s product renaissance for 2004, top company executives on Sunday presented en masse the Ford GT, 500, Focus ST, Freestyle, Mustang as well as a Bronco concept and luxury version of the F-150.

During the debuts at the North American International Auto Show, Ford Division President Steve Lyons announced that the F-series retained its crown as America's best selling vehicle in 2003, with a record-breaking 85,000 sold in December alone.

Last month also marked the sale of the five millionth Explorer, said Lyons.

Although 2004 is billed as the year of the car for Ford, company group vice president of design J.Mays stuck with the SUV theme with the unveiling of the Bronco concept.

"It's a tough little sport ute that would be positioned just under the Ford Escape in terms of price and size were it to be put into production," said Mays.

Nick Scheele, Ford's chief operating officer, underlined the scale of Ford's product "tsunami" by saying that by 2005 1.2 million units of the company's total U.S .volume will come from new vehicles.

Scheele revealed for the first time production versions of the Ford 500, Freestyle and Mustang.

The 500 is "full-size, sophisticated and very affordable" with a larger interior than the Crown Victoria and a trunk large enough for eight golf bags.

Phil Martens, group vice president of product creation, billed the Freestyle crossover as the first in the class to offer truly effective interior packaging, combined with a refined and upscale design.

The Freestyle and Ford 500 are scheduled for production in Chicago later this year. They share the same underpinnings along with the Mercury Montego sedan, which will debut next month at the Chicago Auto Show.

Ford isn’t sure yet which will be the hot seller.

“We thought the sedan would be the volume product,” Martens said. “We may be wrong. We haven’t set that up yet. We’re going to watch the feedback we get from Detroit.”

Both vehicles will feature available all-wheel drive and a fuel-stingy continuously variable transmission (SVT).

The new Mustang will be available in V6 and V8 starting at under $20,000, said Mays.

"I love the Mustang because it's so true to the concept we presented last year," said Ford Chairman Bill Ford.

Detroit News Staff Writer Eric Mayne contributed to this report.