Don’t put any money down for a high-end electric car just yet.
General Motors has no current plans to make the Cadillac Converj (right), a luxury concept of the Chevrolet Volt plug-in electric car that was introduced at the Detroit auto show, said Mark McNabb, North American vice president of Cadillac/Premium Brands.
GM Vice Chairman Bob Lutz said during the show the Volt remains on track to launch by the end of 2010. Showing off the Converj, Lutz said GM is confident enough about the Volt technology that the company can start looking at Volt derivatives.
The Volt, which is being designed to run for 40 miles on battery power alone, will not be profitable until battery costs drop and one way to do that is to increase volume on the model. Offering the Converj would help, while also attracting higher profit margins.
However, if the U.S. automaker decides to move ahead on the well-received Converj, a production version could look close to the concept, McNabb said.
“It was done more to measure a little bit how the luxury market would assess ‘green.’ It is what it is. It’s just really an exploration into green versus luxury - can it be done and all that.”
McNabb pointed out the Converj is based on existing technology.
“It’s not like a pie-in-the-sky concept where you can’t build it or it’s years and years before you could. It’s more a concept of ‘let’s measure how luxury will accept this type of vehicle.’”
Don’t put any money down for a high-end electric car just yet.
The basement of the Cobo Center has been reserved for Chinese automakers in recent years, but thanks to the state of the U.S. economy and slumping auto sales, cancellations by other automakers for the 2009 auto show have left a fair amount of space to be filled.
The Michigan Economic Development Corporation (MEDC) came up with a novel idea to fill the room – creating a park (pictured above) to test drive ‘green’ hybrid vehicles.
Reuters spoke with James Bell, editor of the website Intellichoice.com, a website that allows consumers to compare the cost of ownership on vehicles. Highlights follow:
Q: What kind of shape are the U.S. automakers in?
General Motors –
“What was incredible for me was during the Senate hearings, how that company was forced to kind of drop their pants and show an ugly side that maybe they were hoping to kind of keep hidden, but I think the company is going to be better for it.”
“Everyone needed to get over the fact that they’re not No. 1 anymore. It’s Toyota.”
“There’s still a sense of ‘Why would I buy a GM or Chrysler when I can rent one?’ and that’s a bad spot for them to be in. To the general consumer there’s still a big gap.”
Ford Motor –
“Ford go a lot of credit for not going to the (government bailout) well, but that’s only because they already mortgaged their future.”
“They’ve done a nice job of distancing themselves from the other two, but it’s not because they’re doing so well. It’s because they’ve already paid the piper, so to speak.”
“From a product perspective, they need to make a ton of noise about their hybrids because Toyota has done a fine job of positioning themselves as a hybrid-green-efficient company while they were still pushing Tundras and Sequoias. Whereas General Motors or Ford is seen as an SUV and pickup truck company who had a couple green cars on the side.”
“That could be a perception gap closer because I think in a lot of consumers’ minds a company that can do a hybrid well can do a gasoline standard car very well, and Ford’s doing hybrids very well now.”
“Their product line is awful. It’s unfortunately true and I’ve driven them all and I’ve tried to find the rose among the thorns and I can’t.”
“The (Chrysler) brand is kind of damaged goods now. Dodge still has some equity as being more of a budget, fun, little more of a spirited brand, probably younger skewing as well. Jeep has equity beyond belief. I just think the Chrysler brand is falling into a Plymouth trap of being somewhat irrelevant.”
Q: Is the Chevy Volt all-electric car (pictured at LA auto show in November) a potential game changer for GM?
“Probably not as much as they would hope because it’s going to be expensive and it won’t be on every street corner like a Prius is in certain cities. The Volt … better arrive at the end of 2010. I don’t think it’s going to bring them the big wave that Prius did for Toyota. It will definitely help, but it’s more a matter of you have to do it just to keep in the game.”
“I don’t think consumers are going to shy away from those products because a lot of people got burned pretty hard driving that Yukon and finding out that the ATM card would only let you go up to $75 at the fuel pumps.”
“If they put a date on something and they don’t deliver, they’re really going to be done in the public’s eye.”
Q: How will the luxury auto market be affected by the recession and has easy credit goosed that market up to now and it will inevitably fall off?
“Easy credit has been goosing that market for years as is the leasing business. That really allowed people to drive a vehicle that’s way beyond their means.”
“BMW, Mercedes, Lexus, they can weather the storm and I think what they’ll probably do is right-size the business. We are going to a period of austerity for a bit where somebody goes shopping for the Lexus and realizes, ‘We’re really more of a Toyota Avalon household’”
“Luxury is going to be defined a little differently going forward. It’s not going to mean the mega V-8 engine with leather everywhere and killer sound system. It might mean efficiency, but with niceties.”
Q: What do younger buyers want?
“I don’t think (customization) is going to be the Holy Grail. It’s going to be solid product with plenty of creature comforts at a fair price as well as a strong image perception.”
Q: What other factors will be important in the overall sales market?
“The car business isn’t going to dry up. They still need to get cars. They’re just going at it from a much more rational way. Resale value is going to become a very big factor in people’s purchase decisions.”
“There’s just going to be more of a rational look at things and not just going for that new car smell all the time.”
Several dozen angry United Auto Workers union members marched with pickets outside the Detroit auto show on Sunday, protesting the givebacks the Bush administration is trying to squeeze from them in return for bailout funds needed by General Motors and Chrysler.
The $17.4 billion federal bailout of GM and Chrysler announced in December includes concessions aimed at the UAW, including lowering union wages and benefits to the same level as foreign carmakers’ U.S. plants by December 2009, and eliminating the jobs bank, in which idled workers receive pay and benefits.
The group of some 50 or more workers marched up and down outside the conference center in chilly but sunny weather, chanting such slogans as “Bush says cut back, we say fight back” and holding signs including “No millionaire left behind” and “Out of a job yet? Keep buying foreign.”
Reuters sat down with David Champion, senior director for automotive testing at Consumer Reports magazine, at the Detroit auto show. Some highlights:
Q: What is your opinion about the U.S. automakers and where they stand on vehicle quality?
“They’ve done extremely well in designing and building really interesting products that really test well and really hit the market where the customers are buying. They have the product. Unfortunately, they don’t have the reliability. In today’s day and age, you really need everything to succeed.”
General Motors again rolled out its Chevy Volt electric concept car at the Detroit auto show as a reminder that the struggling U.S. automaker intends to have it on sale by the end of 2010.
Cheering employees (above), as well as Michigan Gov. Jennifer Granholm, waved signs that read: “We’re electric,” “Charged up,” “Game changer” and “We’re here to stay” as they walked ahead of th Volt. GM has said the electric car will have a 40-miles driving range on one battery charge.
South Korea’s Hyundai is counting on Genasis to be the start of something new. The Genasis, described by Edmunds.com as a “game changer,” won the North American car of the year award at the Detroit auto show, edging the Ford Flex 189 votes to 180.
Hyundai is counting on the Genasis as a “halo” car to lure more affluent buyers. Hyundai’s victory was the first in the award’s 16-year history for a Korean automaker.
One judge, Matt DeLorenzo of Road & Track magazine, said:
“Hyundai Genesis shows that Korean automakers have come of age. Great fit and finish, high quality interior and smooth plush ride gives the Genasis the look and feel of a much more expensive automobile. “
With automakers struggling with the worst U.S. sales in 16 years, production cuts are also extreme for what used to be the industry’s biggest coming out party for the U.S. market — the North American International Auto Show in Detroit. What was once THE U.S. show to unveil the latest flashy cars is now a place where industry officials speculate who will survive and what cuts will be next. It’s all happening during the media preview days Sunday through Wednesday.
General Motors and Chrysler, recent recipients of billions of dollars in bailout funds from U.S. lawmakers, cannot justify spending tends of thousands of dollars on flashy dinners and skits, or stars like Kid Rock (above, from last year) and Eva Longoria, who were guests of the respective U.S. companies in the past.
GM in years past also held a “GM Style” event at which top athletes, actors and musicians like Kid Rock and Jennifer Hudson appeared to help show off the automaker’s cars and trucks. Chrysler earned a reputation for flashiness over the years with the use of suck gimmicks as the herd of cattle at last year’s Dodge Ram pickup truck introduction. The automaker, whose future survival is now regularly questioned, also has used such stars as Flay and Longoria.