TOP DOWN The 2012 Fiat 500c Cabrio will be shown at the New York auto show.
By LAWRENCE ULRICH
Published: April 15, 2011
The Mercedes Concept A-Class.
With the 2011 New York International Auto Show preparing to greet multitudes of shoppers on fact-finding missions, the region’s dealers would naturally prefer to focus on the latest models and the news of their building sales momentum. But events in the Far East — the aftermath of natural disasters in Japan and a headline-grabbing auto show in China — highlight the industry’s increased global interdependence and how those links can bring both profit and pain.
As the New York show’s two days of media previews start Wednesday at the Jacob K. Javits Convention Center in Manhattan, Japanese automakers will be racing to minimize any new-car shortages created by post-tsunami factory shutdowns and slowdowns, especially those popular hybrids, luxury models and niche entries made only in Japan. Showroom arrivals for some promising models displayed at recent auto shows will be delayed, analysts say.
In China, a scheduling coincidence has the Shanghai auto exhibition, a youngster with just a 14-year history, overlapping New York’s century-old event.
Like a married couple divvying up holiday duties with the in-laws, auto companies and their executives must choose which show to attend and which cars to send to each. Citing Shanghai’s broader reach, BMW will send global executives to China and deploy its United States officials to New York.
Rather than play favorites, General Motors and Mercedes-Benz each will hold dual unveilings of important cars — the 2013 Malibu from Chevrolet and an A-Class concept from Mercedes — in both cities.
No one can blame automakers for cozying up to the Chinese market. Michael Albano, who recently returned to Detroit after three years in Shanghai to become Chevrolet’s communications director, acknowledged China’s growing influence on G.M.’s designs, sales and profits. Even as business crumbled in the American market and the company slid toward bankruptcy, its Chinese sales were booming, from fewer than 900,000 cars in 2006 to nearly 2.4 million last year.
Shanghai’s show won’t overshadow Manhattan’s exhibition, said Mark Schienberg, president of the Greater New York Automobile Dealers Association. The Javits Center will have more all-new models than any show in decades, with roughly 56 cars making their world or North American debuts, he said, adding that advance ticket sales were up 34 percent. The public show, which drew over 1 million attendees last year, opens on Friday and runs through May 1.
In addition to unveilings inside the convention center, carmakers have scheduled a flurry of off-site press events. Lexus will show its LF-Gh hybrid concept on Tuesday evening, along with an appearance by an “Iron Chef,” Masaharu Morimoto.
Toyota, still recovering from its spate of safety recalls, must now scramble to restore its factories to full-tilt production. Since the earthquake and tsunami last month, the company has lost more than a quarter-million units of production; the total shortfall for Japan’s seven largest automakers amounts to 510,000, according to a trade publication, Automotive News.
Recovering from those losses won’t happen overnight. Even when factories return to full output, filling the pipeline will require some six to seven weeks of overtime to make up for each lost week, said Michael Robinet, director for global production forecasting at IHS Automotive.
Buyers here, however, may be among the first in line: Japanese makes will first concentrate on stocking dealers in North America, Europe and other key export markets, Mr. Robinet said.
“Whatever happens, the Japanese don’t want to lose market share outside of Japan,” he said.
For now, the effects of Japan’s disasters on Detroit have been relatively minor. But snafus may yet lurk in the intricate global supply chain, perhaps in the depleting supply of parts in a supplier’s warehouse.
“The Detroit Three is putting a brave face on it, but to think that they will escape unscathed would be folly,” Mr. Robinet said.
Jesse Toprak, vice president for industry trends at TrueCar.com, said that the average vehicle had 30,000 parts, and it took only one to drag production to a halt.
“You can’t say, ‘Sorry, there’s no air-conditioning button or the computer chip for your transmission,’ ” he said.
Mike Jackson, chief executive of AutoNation, the country’s largest auto retailer, said shoppers can expect to see fewer discounts and incentives as hot models grow scarce on dealer lots.
Mr. Jackson, whose chain comprises more than 2o0 dealerships, expects used-car prices to reach record levels by May. Consumers, many of whom put off vehicle purchases during the recession, will look at pre-owned models if they can’t find the new version they want. And today’s buyers are less anxious about used cars, Mr. Jackson said, with improved durability and the extended warranties of certified pre-owned programs.
Despite the clouds looming just over the horizon, experts don’t expect conditions to markedly hamper the recent sales comeback. According to Automotive News, a consensus of analysts projects sales of about 13 million vehicles this year, up from 11.6 million in 2010.
Pent-up demand and improving economic fundamentals are bringing people back to dealerships despite the threat of $4-a-gallon gas. But conditions might make them buy a different car, Mr. Toprak said.
“If you can’t get a Prius, you might buy a Corolla, a Camry Hybrid or even a car from the competition,” he said.
Fuel prices can also change minds at automakers: Mercedes has shied away from selling its small A-Class in America. But spokesmen say the A-Class concept to be shown in New York is likely to spawn a showroom version for the United States.
Fiat’s one-model American line expands slightly with the debut of an open-air version — a Roman-shade soft top rather than a folding convertible roof — called the 500c. Nissan will roll out a new Versa, a budget sedan that replaces the current hatchback. Subaru is bringing a more fuel-efficient version of its Impreza compact sedan.
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