Beyond the hype and hope: North American International Auto Show creates excitement, but new car sales aren’t about to explode

Jan. 17, 2013
Don't mistake innovation and excitement for a change in consumer behavior.

Nobody is more upbeat than a new car salesman. They think they can psyche their way to success on the sales floor. Think positive, they think, and it becomes contagious. Today, many OE dealers are hoping to convince car owners it’s time to stop holding onto their existing vehicles, which they’ve been doing for years.

Right now, the North American International Auto Show in Detroit has the OEMs excited. This year’s show appears to be the best since the Great Recession began, and it has given many people a shot in the arm. The excitement is contagious.

Let’s sift through the proverbial wheat and separate it from the chaff.

U.S. sales did rebound in 2012, and automakers naturally hope to build on the momentum. But new car sales did not come close to pre-recession levels. VehicleServicePros reported two weeks ago that U.S. auto sales are expected to total 14.5 million units in 2012, 13 percent better than 2011, a 5-year high, but hardly a return to the boom times of 2005, when sales hit 17 million units.

This week, the North American International Auto Show hosted 59 vehicle introductions, 50 of which are foreign manufacturers, VehicleServicePros reported. Foreign OEMs see a growing demand for new cars in the U.S. One exhibition official called this week’s show the best turnout in four or five years.

An article in yesterday’s Wall Street Journal took a closer look at the big turnout of foreign carmakers at the Detroit show. It noted that the European and Chinese markets are struggling, hence the new push to the U.S. The interest is borne more out of necessity than opportunity. The article noted European carmakers are expected to post huge losses in 2012.

Then there’s innovation. It generates a lot of buzz, which should not be mistaken for change in consumer behavior.

The automakers have been hard at work developing new concepts like telematics, start-stop technology, gesture recognition and rear doors that can lift over the roof of the car. OEMs showcase these concepts at trade shows, and they aggressively seek input. OEMs are increasingly adept at using social media to create and evaluate interest.

Then there are hybrids, a small but growing market. Hybrids have gained traction in the U.S., and more OEMs are trying to cash in. At least 16 hybrids are new for the 2013 model year, and market share, including all-electric vehicles, is expected to increase to 5 percent from 3.3 percent in 2012, according to WardsAuto, an industry tracking firm.

Read through all the buzz and you realize that for all the hope and hype, no one has a crystal ball for new car sales.

In yesterday’s VehicleServicePros report on the Detroit show, James A. Davlin, vice president of finance and treasurer of General Motors Corp., gave a sobering assessment of the U.S. auto market. His company isn't expecting a speedy rebound in the U.S. economy.

Car owners won’t hold on to their cars forever, and the various new automotive concepts will generate more people to buy new cars.

And as these concepts are introduced, the independent aftermarket will need to be ready to repair and service these vehicles. It’s important for the independent aftermarket to stay abreast of innovations.

But for all the excitement, Americans are holding onto their cars longer than ever as the economics of keeping them makes more sense than shelling out ever larger sums for all the new features the OEMs are hyping.

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