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Forget the power suit. Behold the rise of the power sweater.

Sergio Marchionne, the auto executive steering the still-evolving alliance between Fiat and Chrysler, came to the Detroit auto show this week with no new models to display.

So the attention of the automotive press turned instead to Marchionne's signature styling -- rumpled sweaters, casual slacks and a professorial air that makes him a stand-out in Detroit's sea of sober dark suits.

Known for his long work hours, limited sleep and chain smoking, Marchionne's penchant for dropping quotes from Friedrich Nietsche, Karl Marx and Karl Popper also adds to his air of an academic who has wandered into the board room by mistake.

So how many black sweaters does Marchionne own?

"I buy them in the dozens," he said at an auto industry conference on the sidelines of the auto show. "I don't sleep very much so I buy them on the Internet. They come in all the time."

Auto show-Click and buy? Not yet…

(Written by correspondent James Kelleher)

The U.S. auto retail market — long controlled by franchised dealers and state laws that critics call anti-competitive and inefficient — will open up in the coming years and Honda will not be left in the dust, a top U.S. executive for the Japanese automaker said. 

Honda has already been confronted by the new paradigm in the retail motorcycle market, where upstart rivals from rapidly emerging nations have begun selling bikes directly to consumers — or very nearly so — using sporting goods stores and other unconventional channels, John Mendel, executive vice president of auto sales at American Honda Motor Co, said at a conference held in conjunction with the Detroit auto show.

“What we’re trying to prevent is someone doing to retail automotive what Blockbuster did to the video store and what Netflix has done to Blockbuster,” Mendel said at the Automotive News World Congress.

He emphasized that dealers, protected by state franchise laws that in some cases make it a criminal offense for a manufacturer to sell a vehicle directly to a consumer, would remain an important part of Honda’s distribution strategy.

But in a world where consumers are now able to order whatever they want on the Internet and have it delivered the next day, Mendel said the prognosis for the traditional sales process, which can include hours of paperwork at the dealership after the customer makes a purchase decision and can tack on thousands of dollar in extra costs, was not good.

“We haven’t cracked the code,” he said. “But we know someone is ultimately going to change it.”

Auto show-Delphi CEO pledges better “health” for industry

When DelphiCEO Rodney O’Neal talked of losing weight and quitting smoking, it was his recipe for getting the global auto industry back on track and not a New Year’s resolution.

In his first public comments since the auto parts maker emerged from a four-year bankruptcy in October, O’Neal said the global auto industry will need to shrink to match consumer demand and stop pining for the good ‘ole days when demand was much higher.

“In terms of our industry …  we are just simply overweight, to be honest we are just fat,” he said at the Automotive News World Congress conference in Detroit. “We are too bloated and we absolutely do need the latest fad from a diet perspective to get right-sized.” The conference was held in conjunction with the Detroit auto show.

O’Neal cited CSM data, saying the industry globally has 86 million units of manufacturing capacity, about 30 million more than where demand is currently. And the overcapacity problem is even worse in the supplier sector.

“Everybody’s got a plan, an idea on how to get healthy, how to lose weight, how to stop smoking, how to do a better job of staying in touch with one another and above all how to reduce stress,” he said.

Delphi slashed 90,000 workers and divested numerous business lines to focus on safety equipment, green technology and vehicle connectivity through the bankruptcy. O’Neal said the privately held company has no timetable yet for an initial public offering.

He also said the industry executives need to stop looking to the higher sales of the past and focus on what is ahead. “We all should stop smoking anything that causes us to think about the good old days.”

Auto show-Super Bowl TV ads don’t score for Mazda

Advertising during the Super Bowl doesn’t score for Mazda.

While the Japanese automaker plans to boost its marketing budget this year as it launches the Mazda 2 small car, running TV ads during the National Football League’s championship game in February won’t happen.

“You’re never going to see us on Super Bowl,” Mazda North American chief Jim O’Sullivan said at the Detroit auto show. “We’re not going to spend that kind of money on that kind of property because, yeah, you get a lot of impressions and stuff out there, but the fact of the matter is, do you really get to the target you really wanted? That’s more of a feel-good ad for a lot of people.”

O’Sullivan said it was a “given” that Mazda’s media budget will be up in the first quarter, as well as for the year, although he didn’t say by how much. He said Mazda, which expects its U.S. sales to possibly rise faster than the overall market this year, will spend more on social media and digital advertising this year as it tries to reach younger buyers for its late summer launch of the new 2 model.

However, O’Sullivan said advertising on the Super Bowl — where Korean automakers Hyundai and Kia, and Germany’s Volkswagen will advertise this year — is more about the creativity of the spots than the product or service being sold.

“The one thing about the Super Bowl too, if you’re going to go and do ads at the Super Bowl, you better make sure you got some very good creative because you’ll get criticized for your ads if you don’t have very strong creative,” he said. “So is it about selling cars or is this an agency’s competition? They’re memorable in some cases, but that’s a very expensive property.”

“I’d rather take those resources and go where our customers are and focus on what our brand is,” O’Sullivan added.

Auto show-Consumer Reports analyst talks Toyota, other issues

Consumer Reports magazine’s senior director for automotive testing, Dave Champion, sat down with correspondents Bernie Woodall and Ben Klayman at the Detroit auto show to discuss the U.S. auto industry, including Toyota’s future, the changing nature of the show, small cars and Chrysler.

About Toyota:

“Toyota’s grown incredibly quickly; not only in the number of vehicles that they sell but also in the number of vehicles that they produce. They have a range of vehicles now that’s extremely wide. What Toyota used to have was a great attention to detail on every single part that went into the car and a real focus, very tightly, on the product. Now, with so many different variants and iterations and models, it was very difficult to keep that same focus and that same attention to detail on all the products.”

“The quality of the materials they’ve been using seems to have dropped off and the overall reliability of some of their cars has also not been the stellar (level) that it was in the past.”

“It comes from the top. Look what Alan Mulally’s done at Ford, very focused, one direction, everybody working in that direction. I think the recent changes at Toyota will bring that back, where they focus less on being the biggest, the best, the most stylish or whatever, going back more to their roots, ‘Let’s build something that people will want’ and that will be reliable and bring customers back year after year after year.”    About the Detroit show:

“It’s a much quieter show and much more sensible show. Gone are the phenomenal, thousand-horsepower, biggest in class, best of this, concept vehicles that are just absolutely pie in the sky. This is a much more sensible show, really gearing to what people are going to buy.”

About small cars and gas prices:

Auto show-J.D. Power analyst opines on U.S. market

J.D. Power and Associates analyst Jeff Schuster met with Reuters TV and text reporters at the Detroit auto show to discuss the U.S. auto market, including the changing nature of the show and 2010 demand.

About the subdued nature of this year’s show:

“If you look around this show, the message here really is an industry getting back to business. They’re obviously here to sell cars.”

“We’ve changed as an industry … Everyone has evaluated their position after coming out of this steep recession that we were in. At least for the near-term, excess is out.”

“While there’s optimism, it’s cautious optimism. There’s a lot of risks still ahead in this marketplace and the industry. We’re not out of it yet, but I think there’s definitely a general feel of optimism in the market.”

“While I don’t know that we’ll go back to the breaking glass and the cattle down the street, we’ll probably see something in between. We’ll see a little bit more show as we recover.”

About the 2010 market:

Auto show-IHS Global Insight analyst’s thoughts

IHS 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:

Auto show-Rattner: Both GM and Chrysler will survive

(Written by correspondent David Bailey)

Steve Rattner, a key figure in the restructuring of General Motors and Chrysler in bankruptcy last year as the head of the U.S. Treasury autos task force, said Monday he believes that both automakers can survive and repay at least some of the taxpayer money allotted to their bailouts.

“There is a lot of excitement and energy around the whole show and around GM and Chrysler for the first time in a long time and I think that’s great,” Rattner told reporters after touring the Chrysler layout at the Detroit auto showwith Chrysler CEO Sergio Marchionne, who also is the head of Italy’s Fiat.

Chrysler was thrust under the management control of Fiat following the bankruptcy reorganization that was completed in June.

“I feel terrific about the progress that has been made and enormous confidence in both (GM Chairman and CEO) Ed Whitacre and Sergio Marchionne to knock the cover off the ball,” Rattner said. “There is a feeling around here that for the first time in a couple of years we are moving in the right direction and people feel a new sense of enthusiasm.”

Rattner said that without government intervention, both GM and Chrysler would have run out of money and fallen into liquidation, but both can survive.

“We saved tens of thousands of jobs, we saved two iconic companies and this is going to work,” Rattner said. “The companies are not going to go bankrupt again, they are going to be profitable and the government is going to receive a lot of money back, so I think it is a win-win.”

Autos show-Protests at odds with each other and amongst themselves

(Written by Correspondent Nick Carey)

Two protests outside the conference center in downtown Detroit where the auto show is being held provided an odd image.

This was not merely because the two protests — one by workers protesting for more help for workers amid the bailout of the U.S. financial sector, the other ostensibly by “tea party” activists — were rather small, barely a few dozen altogether. Though it must be said that seeing protesters outnumbered by journalists, and there are hordes of us here, is always a surreal experience.

But the oddity of the occasion manifested itself in two ways. First, the two groups of protesters were separated from each other by a one-lane road and a few from each side — and there were maybe a dozen or so more of the workers than the “tea party” people — stood at their respective street corners and stared each other down. Both groups were confined to a small patch of concrete that for 90 minutes they could call their own.

 Some waved banners and chanted their slogans, but for the most part everyone was civil. Perhaps that was because the workers and the main part of the tea partiers were there to protest more or less against the same thing: bailouts. The workers were against bailouts for Wall Street bankers, while the tea partiers were against bailouts, period. So there was little for them to shout about, or maybe it was just too cold to argue.

But the group that left both sides feeling uncomfortable, including many of the tea partiers, was a small group on the same side of the street as tea party activists. At first this group seemed to be one and the same as the tea party folks, but evidently with stronger feelings about the administration of U.S. President Barack Obama. This group of a half dozen or so protesters carried posters depicting Obama sporting an Adolf Hitler mustache and the words “I’ve changed” — a play on words from the “Change” platform on which Obama ran for president in 2008.

They sang songs including an unnerving, and historically inaccurate, ditty about Nazi doctors and how Obama was becoming like them thanks to his healthcare reform. As this group became more vocal and sang more loudly about Obama’s similarities to the Nazis and Hitler, the other tea party activists moved away from them and occuped the edge of their patch of concrete and leaving the center ground to this small band.

Auto show-Tata Technologies looks to offer “frugal engineering”

Tata Technologies helped engineer the Nano, the world’s cheapest microcar, for its parent, Tata Motors. 

But Tata Technologies wants to become a supplier of “frugal engineering” solutions to a global industry that, as it restructures and adjusts to lower industrywide sales at least in North America, looks for ways to squeeze out product development costs. 

“For Tata, the Nano creates a new market in India and other parts of the developing world,” Tata Technologies President Warren Harris said at the Detroit auto show. “By positioning at $2,500, Tata Motors is going after what used to be the motorcycle and motor scooter market.”

As U.S. automakers look to bring the break-even levels lower, at lower annual production levels, Tata Technologies hopes to become a vendor to the Detroit 3 and the transplants in North America, and automakers in the developing world. 

About the Nano, Harris said: “The thing we’re most proud about is the contribution we made to the innovation (18 of 32 patents) and the frugal engineering that allowed the vehicle to be delivered at a $2,500 price point. That’s the major thrust of the event we’re having on Thursday. 

“Our ambition is to go and compete with the Magna Steyrs, and the Pininfarina of this world,” he added. “We believe we’ve got a differentiator that increasingly will allow us to go toe to toe with them and compete very, very effectively.”

(Reuters photo)