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Auto show-IHS Global Insight analyst’s thoughts

January 12, 2010

concept1IHS Global Insight analyst Rebecca Lindland met with Reuters TV and text reporters at the Detroit auto show to discuss the industry, including electric and small cars, GM, Chrysler and Toyota, and auto shows past and future.

About electric cars:

“We will eventually see electric cars, mostly because fuel economy regulations are really being forced upon the manufacturers from Washington. It’s a policy and regulation issue. We are not seeing huge amounts of consumer demand out there. Whether it’s an education issue or whether they just say, ‘I’m getting a smaller vehicle anyway. I’m happy with the fuel economy I’m able to get.’ I was disappointed to see that hybrids were still less than 3 percent of the market in 2009, which means 97 percent of people are picking something else.”

“I understand the emphasis on electric and future mobility and sustainable mobility. I do think we need to be careful that we’re not being overly aggressive because the consumer has not chosen those vehicles yet.”

About the flashiness of past Detroit auto shows and whether they are a thing of the past:

“It seems almost inappropriate to think about having flashy auto shows again because there is this idea, a more restrained society. And, of course, I don’t think we’ll see those kinds of things from the same people. We’re not going to be seeing copulating bulls in the street from Chrysler or Dodge any time soon.”

About the 2010 U.S. auto sales market, which IHS sees finishing at about 11.5 million units:

 ”We have no business being in the 10.4 million unit range and we really have no business being at 11.4 million. Not a market this size. We should comfortably be in that 15, 16, even 17 million unit range so there is a lot of upside in the market and the last thing a manufacturer wants to do is be caught flat-footed so you have to prepare for an upswing.”
Who will be the winners in 2010?:

“It’s hard to say anybody won in 2009 except for Hyundai and Kia. I think Ford will continue its momentum. I think that we’ll see some recovery on the luxury side. You have to pay attention to brands like Subaru, Kia, Hyundai, the ones that present a very good value to consumers.”

About GM:

“We are continuing to see some instability on their management side  of course. (Chairman and CEO Ed) Whitacre, by his own admission, isn’t going to be CEO forever so we know a major change is on the way. We don’t know when, but it’s out there. When we look at that company from an operations and balance sheet management side, there’s a still a lot of changes coming.”

“From a product side, they’re showing some of the best product they’ve shown in a long time. I don’t get concerned with what Whitacre does until he starts playing with design. So far, he’s stayed out of it. When you start messing with (head of design) Ed Wellburn, then you have to mess with me.”

About Chrysler:

“You can’t ignore the fact that there’s very little product coming out of the company.”

On whether alliance partner Fiat could dump Chrysler cars and sell Fiat cars under the Chrysler name:

“It is selling the American public a little bit short to say the future of Dodge and Chrysler cars is in small C- and D-size segment Italian cars. You have to respect the sales of the Dodge Challenger with the 5.7-liter Hemi, and some of them have 6.1-liter Hemi engines. The styling of cars, you can’t just make a clean sweep like that and expect people that are so domestically oriented to just blindly accept these products.”

About Toyota:

“Toyota certainly has had a very tough 2009, unlike anything they have ever experienced before. The biggest challenge is they’ve been riding the wave of the Baby Boomers for so many years that they really have to get more and more into the younger buyer and not just through Scion. They’ve got to get them into Corolla and Camry. Being No. 1 is not always a fun place to be. They do need to be careful. They’ve got some challenges that any huge manufacturer faces.”

About small cars:

“Americans are in for a little bit of sticker shock when they see some of these small cars. There’s so much technology in them, but that’s not free so we are going to see an increase in the price of small cars. And then the acceptance may be even lower.”

“Some consumers may say, ‘This is perfect. I understand that I’m buying technology rather than space.’”

(Reuters photo of Hyundai electric concept car)

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