Detroit Motor Show: Car makers still bullish despite sales flattening out

The Detroit Motor show, the auto industry’s annual winter festival of glitz and chrome, launches this week with car makers still bullish, despite signs that sales have reached a plateau in the United States and increasing uncertainty in Europe, Latin America and even in the world’s biggest auto market, China.

Industry leaders, including Ford Motor’s new chief executive Mark Fields and Mary Barra of General Motors, will make their case that the gleaming cars and trucks will translate into improved profit and stock prices, despite concern among analysts that the post-financial-crisis recovery is nearing its top.

The auto industry is currently undergoing three simultaneous technological revolutions – in propulsion, connectivity and autonomy.

The first will determine whether the internal combustion engine will be supplanted by hybrid cars, battery-powered electric cars or hydrogen fuel cells.

The connectivity revolution, meanwhile, is putting internet services, from satellite navigation systems to advanced telecommunications, into vehicle dashboards.

And the autonomy revolution, in plain English, is the driverless car.

It is already creeping into vehicles in the form of radar that can sense a potential collision and automatically apply the brakes.

At this year’s show all three trends are set to be evident, but not dominant. Google’s driverless-car guru, Chris Urmson, will attend the show, but without one of the company’s prototypes.

While GM yesterday launched its new Chevrolet Volt hybrid, electric vehicles still account for less than 1 per cent of the global vehicle market. GM’s current Volt has sold well below what was initially expected, according to analysts, down 19 per cent last year to fewer than 19,000 vehicles.

For every electric-powered Tesla, Detroit still has lots of gas-gulping pick-up trucks and SUVs, the vehicles that for all the impending technology upheavals still fuel the industry’s profits.

Even Jaguar, known for sporty sedans, plans to launch an SUV next year, although it has not yet disclosed its pricing for the luxury vehicle.

Meanwhile, Volvo, which intends to start exporting a mid-size sedan to the US this year, is also considering building a factory in the US, following in the footsteps of the German manufacturers BMW and Mercedes.

Reuters