New Cars Arrive, Courting Few Buyers

The prolonged slump in vehicle sales has barely slowed car companies from blitzing the market with new models.

But with industry sales expected to fall below last year’s depressed levels, automakers will be challenged to attract attention from consumers who are staying away from showrooms in increasing numbers.

General Motors, whose United States sales fell 22 percent last year, made the most news Sunday, by introducing a sedan and two crossover vehicles at the opening on Sunday of the Detroit auto show. The company also said it would add two more models to its Chevrolet lineup — a minicar and a seven-passenger crossover — in 2011.

G.M. executives said the models had been in development long before the overall market slid 18 percent last year, and the company hit such dire straits that it needed to seek financial help from the federal government.

“These cars are paid for, their development is behind them, and the manufacturing investment is done,” said Robert Lutz, G.M.’s vice chairman for product development.

He said he hoped the new Buick Lacrosse sedan and the two crossovers, the Chevrolet Equinoxand Cadillac SRX, would sell without incentives and lift G.M.’s sagging revenues.

“Some people say a bad market and a poor economic environment is an unfortunate time to launch new product,” Mr. Lutz said. “I think it’s an extremely good time to launch new product because that’s when you need the added revenue.”

Automakers and analysts believe that industry sales in 2009 will drop significantly below the 13.2 million vehicles sold last year, possibly to as low as 10.5 million units.

Under those conditions, new models will be hard-pressed to draw anywhere near the level of interest they typically receive when they first hit the market.

Developing a new model usually takes three to four years, meaning G.M.’s offerings started being developed when American consumers were buying about 16 million vehicles a year.

“The problem is you can’t turn product development on and turn it off depending on the market conditions,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

In G.M.’s case, the company will probably cut back on new models as it downsizes to meet conditions attached to its $13.4 billion loan package from the government.

“The nature of auto companies is to overproduce, but that is definitely going to change with the new financial reality,” Mr. Cole said. “I don’t think we will see these bad habits come back.”

The Ford Motor Company showed off two new models Sunday, the Taurus sedan and Fusion hybrid, as well as a 540-horsepower version of the Mustang.

But with the market shrinking, Ford is playing down expectations somewhat for the Taurus.

The Taurus was the best-selling American car in the early 1990s, but it gradually lost its appeal and became an also-ran in the full-size sedan segment behind the Toyota Camry and Honda Accord.

The new version, Ford executives said, will find a smaller niche in the market.

“We’re not expecting to ever do the 400,000 units we did at its peak,” said Mark Fields, president of Ford’s Americas division.

Other models that were introduced in Detroit included hybrids from Honda and Toyota’s Lexus division, as well as concept cars from German automakers.

The automaker with the least to show was Chrysler, which was coming off a year when its sales had declined 30 percent.

Chrysler recently received a $4 billion loan from the government in order to stay solvent until March. The company’s chief executive, Robert L. Nardelli, said Sunday that Chrysler was counting on more federal aid to complete its reorganization process.

While it showed a few prospective electric vehicles on Sunday, Chrysler had no new models ready for the market.

But Mr. Nardelli said new car introductions would resume in 2010, and pledged that Chrysler would still be in business by then.

One of Chrysler’s vice chairmen, James Press, said the automaker did not think the lack of new models would hurt its sales in 2009. “We feel we haven’t extracted the potential of our current product line,” he said.

Luscious LaCrosse Leaves Lexus Lurching

Just days before the start of the North American International Auto Show (NAIAS) in Detroit, Michigan, General Motors has taken the wraps off of the next generation Buick LaCrosse — Oh, is it a beauty!

With a distinct Lexus look to the body style, the next generation LaCrosse is big on visual appeal inside and out. Slated to show up in Buick showrooms this summer, the 2010 Buick LaCrosse is the brand’s best looking vehicle since the Enclave.

There are no V8 engines to be found in the all new LaCrosse, rather a pair of fuel saving V6s will be used. According to GM, “The new LaCrosse was created with great attention to detail, craftsmanship and advanced technology,” said Susan Docherty, Buick-Pontiac-GMC vice president. “It builds on the success of Enclave as the next step in Buick’s revitalization. And, as with Enclave, our goal is to attract a whole new buyer to our dealerships for LaCrosse.”

According to GM, the 2010 Buick LaCrosse will be offered in three models - CX, CXL and CXS:

• CX – equipped with a new 3.0L direct injection V-6, premium cloth seats and 17-inch wheels. The 3.0L engine generates an estimated 255 horsepower (190 kW) and 211 lb.-ft. of torque (286 Nm) and is mated to a six-speed automatic transmission.
• CXL – also equipped with the new 3.0L direct injection V-6, adds leather-appointed heated seats, dual-zone automatic climate control, fog lamps, outside rearview mirror with LED turn indicators and puddle lamps, and 18-inch wheels. Intelligent AWD is available.
• CXS – equipped with a 3.6L direct injection V-6; real-time active-dampening suspension; perforated, leather-appointed, heated and cooled seats, and chrome-plated 18-inch wheels (19-inch optional). The 3.6L engine, mated to a six-speed automatic transmission, generates an estimated 280 horsepower (209 kW) and 261 lb.-ft. of torque (354 Nm).

“The new LaCrosse is intended to represent modern elegance,” said Ed Welburn, vice president of GM Global Design. “Throughout the design, you experience a balance of contrasts. Both the interior and exterior have been designed with harmony in mind. The exterior balances taut, sculpted lines with sensuous accents and surfaces. Inside, smoked chrome accents, warm wood, first-class leather and materials combine with cool blue ambient lighting to create an inviting environment.”

The sedan will make its official roll on Monday when Buick holds its press conference at the NAIAS. In the meantime, the following photographs can serve to whet your appetite for this nice looking sedan:

Sculpted styling is the most noticeable difference between the first and second generation LaCrosse models.

Buick faithful see that the LaCrosse is closely styled to the Invicta concept which rolled out at the 2008 Beijing Auto Show. Buick's largest market is China where the brand outsells the U.S. domestic market by a 2 to 1 ratio.

The interior of the LaCrosse features an analog instrument cluster, chrome offset by dark wood accents, and the contrasting thread and French stitching on the instrument panel. Both the 3.0L V6 and 3.6L V6 are paired with a six speed automatic transmission to provide excellent highway fuel economy.

Pricing and EPA fuel economy have yet to be announced. Expect that information to be provided closer to the LaCrosse’s summer release.

Source: General Motors

Bush Saves GM and Chrysler at the Last-Minute, for Obama

DETROIT - The city is shutting down thanks to a snowstorm that will keep at home those who weren't already on an early Christmas vacation. The pall cast over Metro Detroit for the last couple of months has lifted a bit, as President Bush announced Friday morning short-term loan guarantees of up to $17.4 billion to limp General Motors and Chrysler LLC into next March. The money, $13.4 billion now and another $4 billion available in February, will come from the $700-billion Troubled Asset Relief Program fund. There will be no forced bankruptcies, for now. No car czar was named; that was left for President-elect Obama to decide.

Bush said that "allowing the U.S. auto industry to collapse is not a responsible decision," at his brief White House news conference Friday morning. He cited the recent financial crisis as the reason for the U.S. auto industry's sudden decline and said that letting the car companies fail "could send our suffering economy into a deeper and longer recession."

Terms of the agreement give GM and Chrysler three months to restructure into viable companies, Bush said. The loans, he added, will provide for an orderly Chapter 11 process and a better prospect for success.

If GM and Chrysler can't present viable plans for turnaround by March 31, they will have to repay the loans. Bondholders are expected to convert auto company debt into capital. Everyone in the industry must make sacrifices, Bush said, including management, labor, creditors, bondholders, dealers and suppliers. The lame-duck president wants United Auto Workers to equalize their contracts with that of non-union workers in foreign automakers' U.S. plants by the last day of 2009.

The Detroit Three quickly issued prepared statements.

Chrysler CEO Bob Nardelli:

"A letter of intent was signed which outlines the specific requirements that must be achieved. These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements."

GM (not attributed to a specific executive):

"This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us."

Ford Motor Company CEO Alan Mulally:

(He reiterated Ford's request for a $9-billion credit line.) "The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs, and further damage the already weakened U.S. economy."

Bush's "bailout" came a week after Senate Republicans torpedoed a House bill that would have provided the same amount from the Energy bill high fuel-mileage technology ("136") funds. The White House is probably unaware of the fact that also on Friday morning, Toyota Motor Company announced it would post a loss this fiscal year (ending March 31, 2009) for the first time in its 71 years. What happens next is that the Obama administration will have to complement further assistance for the Detroit Three with an economic stimulus package. His proposed federal works program would be a start. No one is buying cars. That will have to change before GM, Chrysler, Ford and even Toyota are restored to full health.

Below are the complete official statements from GM and Chrysler in the wake of the announcement:


GM Statement on Administration Providing Bridge Loan to Domestic Auto Industry

We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation's economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us.

This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success. It will lead to a leaner, stronger General Motors, a GM that is:

*dedicated to great products, exciting design, and world-class quality

*fully committed to leading in energy-saving vehicles and technologies,

*responsive to the needs of our customers, our stakeholders and the communities we live in and serve.

We know we have much work in front of us to accomplish our plan. It is our intention to continue to be transparent as we execute our plan, and we will provide regular updates on our progress. We again thank the Administration for this important support of our industry at this challenging time, and we look forward to proving what American ingenuity can achieve.

Chrysler LLC Thanks the Administration and Treasury for Their Confidence

Auburn Hills, Mich., Dec 19, 2008 - Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of Chrysler and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company.

”A letter of intent was signed which outlines the specific requirements that must be achieved,” said Nardelli. “These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year.

Chrysler is committed to meeting these requirements."

Nardelli said the Company would remain focused on its challenge and this initial injection of working capital would help bridge the liquidity crisis the industry is facing and assist in helping return Chrysler to profitability.