2005 New York Auto Show, Part I

March 21, 2005

2005 New York Auto Show Index by TCC Team (3/21/2005)


Lutz Shoots the Messenger

Times are tough at General Motors, but while the automaker had to shell out $2 billion to pay off former partner, Fiat, cancel product and platform programs, idle plants, increase project losses 50-fold and boost incentives to record levels, vice chairman Bob Lutz knows where to point the finger. The former Marine and one-time Chrysler president has been increasingly vocal in his criticism of what he deems unfair media coverage. He told a scrum of reporters that they are promoting “the myth of foreign supremacy” at the expense of domestic brands, unfairly suggesting that GM is in trouble. While Lutz didn’t deny that the automaker has some challenges ahead, he insisted they were far less serious than the import-biased press believes. “This is the third or fourth time I’ve seen this movie, and it gets less scary each time.”


Are Gas Prices Taking a Toll?

That was the subject of intense discussion among journalists and industry executives alike during the first press day at the 2005 New York International Auto Show. The definitive answer? “Maybe.” There seems to be general agreement that consumers are starting to pay attention to rising fuel prices, said Phil Martens, head of North American product development for Ford Motor Co. “It’s taken people time,” he said, “to adjust to the idea that this isn’t going away.” But while that’s “getting people to think twice before looking at exceptionally large engines,” added Paul Halata, CEO of Mercedes-Benz USA, so far, the actual impact on sales has been minor, at least at high-end brands. There’ve been some signs of a decline in sales of full-size SUVs and pickups in recent months, but nothing conclusive. And for good reason, insisted General Motors vice chairman Bob Lutz. The folks who typically buy those vehicles have annual household incomes running $150,000 and up. “Do they care if gas prices go from $20 to $40 a week?” Lutz asked, quickly answering for himself, “The answer is no. It makes more difference at the lower end of the market.” Even if manufacturers aren’t sure how to respond in the coming months to rising fuel prices, Ford’s Martens says it would be a mistake to ignore likely long-term trends. “The issue of fuel consumption will have to be factored into Ford’s product plans,” he stressed. The automaker doesn’t intend to walk away from its F-Series or Explorer models, never mind the new Shelby Cobra GT500. But going forward, Ford and many of its competitors expect to feel pressure to adopt more fuel-efficient technologies, such as lightweight materials, more aerodynamic designs, six- and seven-speed transmissions, even new hybrid-electric powertrain systems.


Lexus Sees All-Hybrid Performance Lineup

Lexus lifted the covers on a pair of new models during its spin in the New York spotlight. Clearly the most significant new entry is the GS450h. The prototype revealed at Jacob Javits Center will be a hybrid-electric version of the all-new sports sedan Lexus launched earlier this year. The 450 starts out with a 3.5-liter V-6, which is mated to a high-output electric motor. Together, they are expected to pump out “over 300 horsepower,” according to Lexus marketing manager Mark Templin. That should help the hybrid more than match the performance of the V-8-powered Lexus GS430, launching from 0-60 mph in less than six seconds. Company officials say the most noticeable improvement in performance will be felt at passing speeds, in the 30-50 mph range. The GS450h will be the world’s first luxury sedan hybrid, as well as the first rear-drive hybrid when it hits showrooms about a year from now. It will join the RX400h, the first hybrid-electric vehicle in the Lexus lineup. But according to General Manager Denny Clements, the two models may soon have plenty of company. Lexus is giving strong consideration to launching a brand-within-a-brand of high-performance vehicles, akin to Mercedes’ AMG line-up. The big difference, Clements told TheCarConnection, is that all the Lexus models would be hybrids. The Toyota division will closely watch the market reaction to the GS450h and RX400h to see if it should proceed with the hybrid performance project. Clements described the performance hybrid strategy as a “shield” against environmental concerns, promoting the idea of getting V-12 power with V-6 mileage.

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