Updated: January 9, 2012 8:46 AM | By AFP

Glitz returns to Detroit auto show



Glamour and glitz returned to the Detroit auto show Sunday as once-struggling General Motors served champagne at a sneak peek of its newest Cadillac and Mercedes launched its latest roadster with a jazzy serenade at a swank cocktail party.

Just three years ago, the survival of the Detroit Three automakers was in doubt as GM and Chrysler sought billions in government bailouts and Ford's balance sheets hemorrhaged red ink during the deepest economic downturn in decades.

They are now all posting hefty profits, and a slow but steady increase in auto sales has brought a cautious optimism back to the Motor City.

"There's nothing like competing at the highest level to sharpen the best edge in people," GM chief executive officer Dan Akerson said at the Cadillac event.

"I'm happy to say we've got a broad collection of beautiful vehicles all around the world, inside and out, and more coming."

While the industry still faces deep risks -- especially in Europe -- global auto sales are forecast to grow from around 70 million vehicles in 2012 to 110 million in 2020, Mercedes chief executive officer Dieter Zetsche said.

"A disproportionate part of that growth will be the premium segment, and we intend to take the lion's share of that growth," he told reporters at the launch of the new SL roadster.

But the near-term outlook is still on "shaky ground," cautioned Brandon Mason, an auto analyst with PricewaterhouseCooper.

"I don't think we're in fear of anything like a double-dip recession. But it's that jobless recovery that is the big fear," Mason told a Society of Automotive Analysts conference.

The Detroit Three will have to fight hard to sustain their comeback.

Toyota and Honda are looking to regain ground lost when their inventories were crippled by the March 11 Japanese earthquake and tsunami.

"The problem for Toyota and Honda is that some of their market share losses are potentially permanent losses, because the competition is so much better," said Jesse Toprak, an analyst with TrueCar.com.

"Consumers who would have bought a Toyota or Honda ended up getting something else and realized these cars are as good or better."

South Korean carmakers Hyundai and Kia -- the big success story of the downturn, after winning over consumers seeking good value -- will be working to keep up their momentum.

After a few years austerity, luxury was back in style at the Detroit show, the country's premier auto exposition.

Germans BMW and Mercedes managed to overtake Toyota's Lexus brand in US luxury sales in 2011 amid the Japanese automaker's supply problems, and will be jostling to hold their ground.

Volkswagen also has ambitious goals to more than double its US sales and overtake Toyota and GM for the top global sales spot.

It may very well have achieved part of that goal in 2011 after boosting sales by more than one million vehicles to 8.16 million last year, chairman Martin Winterkorn said Sunday.

GM and Toyota have yet to report their global results.

More than a dozen automakers will vie for the attention of 5,000 journalists with the launch of at least 40 new models on Monday and Tuesday, some ready to hit showrooms and others being rolled out as concept cars to test the waters.

GM will be introducing two small cars -- the Chevy Spark and Sonic -- aimed at winning over young "millennials," while Chrysler will show its first Fiat-based small car, the Dodge Dart.

Daimler's Smart will introduce a miniature pickup truck concept car that will be sure to grab attention.

Automakers will also have several swank sports cars on offer, like the Lexus LF-LC hybrid concept and the new Porsche 911.

Green car fans will get a look at Volvo's plug-in hybrid concept, new hybrids from Mercedes and BMW, and an electric van from Nissan.

The North American International Auto show opens Saturday and runs through January 23.

© 2012 AFP

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