The road ahead
AutoNation's CEO details what's new from the Detroit auto show.
By LOUIS HAU
Published January 15, 2006
The annual North American International Auto Show - known the world over as the Detroit auto show - is the granddaddy of all U.S. car exhibitions. And you couldn't ask for a better guide to the show than Mike Jackson. As chairman and CEO of AutoNation Inc. of Fort Lauderdale, which operates more than a dozen dealerships in the Tampa Bay area under the AutoWay name, and a total of 347 new vehicle franchises in 17 states, Jackson has to sell many of the new vehicles on display at the Detroit show, which continues this week.
In a cell phone interview from Detroit, Jackson offered his take on some big trends in the auto industry. Among his insights:
- On GM's decision last week to cut sticker prices to wean customers off incentives: "I think it was a critical step that they had to make. The message (of the incentives) was, "Our products are not worth what we're asking for them.' You continue to do that year after year, you're eroding your future rather than building your future."
- On steps by GM and Ford to turn around their troubled financial fortunes: "Okay, GM and Ford have their challenges, but what I saw here at the show was that products like the Ford Edge (a new crossover model) demonstrate they understand that they have to differentiate themselves in the marketplace. Over time they lost a lot of customers to the Japanese. The Japanese take very good care of them. You have to give them a reason to come back."
In his own words here is what caught Jackson's eye at the Detroit show.
RETURN OF THE MUSCLE CAR"The Chevrolet Camaro concept car has the classic American characteristics of being big, bold, athletic, aggressive, in your face. You don't see those kinds of cars coming out of Asia or Europe. They haven't made a decision to build it but I would say after the reaction they get at this show, they're going to be figuring how to get it (out) as soon as they can."
WHO SAYS SUVS ARE FADING?"GM's revamped line of full-size SUVs have a brand new platform from stem to stern. The interiors are absolutely world-class, like a luxury car on the inside, and the exterior is much more refined in its styling so they ride and handle better. I'm not one of those who say large SUVs are dead. It's going to remain a very important segment."
REVIVAL OF THE SUBCOMPACTS"They're very aggressively priced, between $11,000 and $13,000. A lot of the vehicles that were in that segment grew up and got bigger. The Corolla got bigger, the Sentra got bigger, the Civic got bigger and all of the sudden, the manufacturers had vacated the segment. Now they're coming back in."
ON LESS-PRICEY HYBRIDS"To get a sport utility priced in the low 20s that's a hybrid, that's taking the technology and beginning to move the price point closer to mass market. Hybrids have had a very large premium to this point, and now perhaps we're beginning to see that premium go down."
ADDING SOME MAINSTREAM FLASH"The redesigned Toyota Camry is a very fresh, more ambitious design than the usual plain-vanilla Camry. It's quite clear it's going to remain the best-selling car in America. For instance, they've increased horsepower and at the same time improved fuel economy. To do both at the same time, that's impressive."