Detroit: The Detroit auto show arrived Sunday with showman’s flair, as the car industry tied its latest offerings to American nostalgia and Hollywood glamor.
But on the sidelines, there were lingering questions about policy and politics.
Arnold Schwarzenegger emerged from a Mercedes-Benz G-Class SUV. The granddaughter of screen legend Steve McQueen arrived in the latest version of the Ford Mustang he immortalized on film.
In a keynote address, US Transportation Secretary Elaine Chao touted just-enacted US tax cuts, which reduced the US corporate tax rate from 35 to 21 percent, saying the move will attract more US investment.
There were also cautious statements about ongoing renegotiations of the North American Free Trade Agreement, on which the North American car industry heavily relies.
But the auto show is about the cars, and automakers did their best to stay focused on their products.
With Americans’ appetite for trucks and SUVs expected to remain robust in 2018, brands highlighted a number of new offerings in that category.
Mercedes-Benz debuted a redesigned G-Class SUV, significantly updating the interior with new technologies. The vehicles were made to climb steep ramps as flames shot up from the ground and confetti cannons blasted. As one finally stopped, Schwarzenegger emerged from a passenger seat.
Star-studded unveils
“I have driven G-Wagens now for 25 years,” glowed the actor of Austrian heritage.
“I think this car became so historic,” he said, “because of its look.”
Ford unveiled its own nostalgic offering, showing off a new mid-sized Ranger pickup, redesigned and reintroduced to the North American market.
It also offered a new sports trim of its Edge SUV, as well a third iteration of a “Bullitt” special edition of its Mustang sports car.
Actor McQueen drove a 1968 Mustang in the thriller film “Bullitt,” creating an indelible link between the car and American pop culture. His granddaughter Molly McQueen emerged from the latest special edition, comparing it favorably with the original.
“It is fun. It’s fast and effortlessly cool,” she said.
In a break from most of the big launches, Volkswagen highlighted a sedan, releasing its updated version of the Jetta, the German automaker’s top-selling vehicle in the US.
The base price of $18,545 won especially loud applause at a glitzy launch, and was a counterpoint to the pricey SUVs and trucks that can easily cost twice that amount and more.
“As a full-line automaker... you need to have a competitive, strong sedan,” VW North American chief executive Hinrich Woebcken told reporters after the launch.
NAFTA
On the sidelines of the flashy announcements, industry insiders were taking a wait-and-see attitude toward talks to revamp the North American Free Trade Agreement, which has generated fears of huge tariffs on Mexican-made imports to the US.
Negotiations have been ongoing for months at the insistence of US President Donald Trump, who has threatened to abandon the agreement if a beneficial deal is not struck.
“There’s good conversation going on to modernize NAFTA,” said Mary Barra, CEO of General Motors. “We’re going to continue to interact constructively to make sure people understand the very complex nature of our business.”
Ray Tanguay, automotive advisor to the Canadian government, highlighted his country’s close ties to the Michigan car industry, and cautioned that losing NAFTA could cost American car buyers higher prices.
“The integration is so much that if you try to break that, you’re going to hurt the consumer,” he told AFP.
Analysts were less certain about potential impacts.
‘Post-peak’ period
“There continues to be the debate - ‘Is the president using hyperbole to get something less severe because he’s a skilled negotiator, or does he seriously think that we need to be exiting NAFTA,’” said Cox Automotive economist Jonathan Smoke.
Meanwhile, the effects of the recently enacted $1.5 trillion in tax cuts were expected to be varied by region and income level. Among the clearest winners will be luxury vehicles because of the tax bill’s bounty to those with incomes over $150,000 a year, said Smoke.
Highlighting the tax changes, which reduced corporate rates, Chao pointed to Fiat Chrysler’s decision to move production of its Ram trucks from Mexico to an assembly plant near Detroit. The car maker said it would invest $1 billion and add 2,500 jobs.
Ford plans $11b investment, 40 electrified vehicles by 2022
Detroit: Ford Motor Co will significantly increase its planned investments in electric vehicles to $11 billion (Dh40 billion) by 2022 and have 40 hybrid and fully electric vehicles in its model lineup, Chairman Bill Ford said on Sunday at the Detroit auto show. The investment figure is sharply higher than a previously announced target of $4.5 billion by 2020, Ford executives said, and includes the costs of developing dedicated electric vehicle architectures. Ford’s engineering, research and development expenses for 2016, the last full year available, were $7.3 billion, up from $6.7 billion in 2015.
Ford Chief Executive Jim Hackett told investors in October the automaker would slash $14 billion in costs over the next five years and shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.
-Reuters
