Detroit Auto Show: Ford Hopes New Product On Target For Rebound

DETROIT January 6, 2003; Tom Brown writing for Reuters reports "what a difference a year makes for Ford Motor Co. . Ford was a center of attention for the second year running on the opening day of Detroit's international auto show. This time, instead of massive jobs cuts and plant closings it announced last year amid a financial free fall, Ford was rolling out a record number of new cars and trucks on Sunday that it hopes will drive a product-led recovery.

The auto show is the industry's biggest annual event and executives from 45 different companies were on hand to introduce new products including everything from a super-luxury new British-made Rolls Royce that will sell for more than $300,000 to a new Chevrolet pickup truck at less than $20,000.

While the news from this year's auto show may not be as dramatic, the problems of the industry and especially the world's second-largest automaker remain as it deals with a sagging share price, narrow profit margins and cutthroat competition amid Detroit's bruising price wars.

U.S. automakers have been unable to shake the zero financing they began after the Sept. 11, 2001 hijack attacks to lure Americans into showrooms. The world's biggest automaker, General Motors Corp. , has put Ford on the defensive with aggressive discounting that has increased its market share in the U.S. for two consecutive years.

Most analysts expect sales of new vehicles to decline slightly next year as the U.S. economy continues to struggle and a possible war in Iraq keeps consumers cautious.

Ford's North American chief, James Padilla, acknowledged the difficulties on Sunday. Asked if Ford could improve its meager profits in 2003, Padilla said: "That's going to be a challenge."

GM announced a new sales incentives program on Friday, carrying Detroit's profit gouging price war into the new year, and Ford has said it will respond with its own new phalanx of cash rebates and interest-free loans on Monday.

FORD'S PRODUCT ONSLAUGHT

But the automaker, which celebrates its 100th anniversary in June, is using this year's show to launch the biggest product onslaught in its history.

More than 15 new Ford production and concept models are on display at the show, including redesigned versions of its popular Mustang and full-sized F-150 pickup truck. The F-Series pickup, which accounts for about a quarter of Ford's U.S. sales, is the world's best-selling vehicle.

"We have begun the biggest wave of new product introductions in our history," said Ford Chairman and Chief Executive Bill Ford Jr.

Other Ford vehicles on display included a concept version of the Freestyle, a vehicle combining SUV interior space with car-like ride and design, and a concept Mercury coupe meant to suggest a new direction for the struggling unit.

The other automakers are not exactly standing still, however.

GM officially unveiled its Cadillac SRX mid-sized sport utility vehicle at the show on Sunday, and its one of three completely new vehicles the luxury brand will introduce this year.

The SRX will be a late addition to the growing number of luxury mid-size SUVs, which include Toyota Motor Corp.'s (Tokyo:7203.T - News) popular Lexus RX 330, BMW AG's (XETRA:BMWG.DE - News) X5 and the Mercedes M-Class from DaimlerChrysler AG , Nevertheless, analysts said that the SRX could be a big success.

The Chrysler side of DaimlerChrysler AG unveiled an updated and more powerful Durango SUV at the show on Sunday. The popular vehicle will now boast 340 horsepower, 95 more than the current Durango and more than Ford's Explorer or Chevrolet's TrailBlazer EXT.

FOREIGN COMPETITION

Japanese automakers, which have been taking market share from Detroit's big three, were also planning major launches. Nissan Motor Co. Ltd. (Tokyo:7201.T - News) unveiled an updated version of its Maxima sports sedan and an all-new version of its Quest minivan, both of which will be built in the United States. Nissan vowed that the Quest would set a new standard for style and function in the minivan market, which has been shrinking as buyers gravitate toward larger SUVs.

Underscoring the threat American automakers face from foreign manufacturers, the new Mini, the update of the little British car that revolutionized the automobile in the 1960s and now owned by Germany's BMW, was named the North American Car of the Year by a group of 49 automotive journalists on the sidelines of the Detroit show.

But Ford got some bragging rights too when the Volvo XC 90, the first true SUV from its Swedish luxury vehicle division, won honors for North American Truck of the Year. On the first evening of the auto show, a convoy of eight Model-T Ford's built between 1913 and 1927 rolled up outside the site of the show, harking back to Detroit's automotive history. The vehicles were to escort journalists to a social event at the Piquette plant in nearby Highland Park, where company founder Henry Ford introduced the first modern vehicle assembly line at the start of the 20th century.