Contradictions Drive The U.S. Auto Market
By WARREN BROWN | Washington Post
March 25, 2008
The following story was also posted online at www.leasetrader.com.
The best way to cover massive automotive exhibits, such as the 108th New York International Auto Show, under way through next Sunday at the Jacob K. Javits Convention Center, is to dance among extremes.
That way, an observer can glean something of the truth about what really is happening in the global automobile industry.
It does not matter what automobile manufacturers propose or governments dictate; consumers will have the final say on what will be done, how it will be done, and at what pace it will be done. But the problem is that consumers are of varying, often contradictory minds, wanting to have their oil and burn it, too; and wanting to do it all at the cheapest possible price.
Thus we have the Smart, a micro-car that "in no way would have been offered in the United States 10 years ago," said Anders Sundt Jensen, global marketing director for Smart, a subsidiary of Germany's Mercedes-Benz car group.
"It would have been impossible to bring that car here then," Jensen said. "How could we possibly have done that? You had the world's cheapest gasoline."
But with oil prices topping $100 a barrel and with prices for regular unleaded gasoline approaching $4 a gallon, lots of Americans are thinking Smart now, so much so that the little car, with an initial U.S. allotment of about 30,000, is sold out in the United States through 2008, said David Schembri, president of Smart USA.
"We're walking a fine line between customers who are waiting too long for a Smart and those who are willing to wait long enough," said Schembri. He said Smart USA is launching an "It Pays to Wait" communications campaign to help placate customers who are eager to get the tiny, two-seat car that can get up to 40 miles per gallon in highway cruising and easily can be parked in the most congested urban environment.
Jensen and Schembri are worried that all the waiting for Smart will drive prospective customers into the showrooms of Toyota, Honda or Nissan, all of which are exhibiting fuel-efficient little cars here.
Pontiac has a different problem. The "excitement division" of General Motors has to come up with hot cars to keep its enthusiast-driver customer base happy. That means more sleek designs, more horsepower and more muscle in an era when fuel prices are soaring. Car groups such as Pontiac are tasked with pleasing two gods — the government and the consumer. If the company displeases the government, it will be hit with heavy fines and bad press. If it displeases the consumer, it will be hit with lousy sales and more bad press.
So Pontiac is trying to please both groups with stunningly sculpted models such as the Pontiac Solstice GXP roadster exhibited here, and the equally attractive Pontiac G8 sedan. Both cars offer oomph without egregious fuel consumption.
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This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com