Jumpstart Automotive Group

On a regular basis I drive past an enormous lot near my home that houses hundreds upon hundreds of brand new General Motors vehicles.

Each time I fly out of Detroit Metro Airport, the sight of another massive lot loaded with pristine new Chryslers fades slowly into the distance during takeoff.

These lots unfortunately represent a visual indication of the difficult times Detroit is facing. The lots are essentially a home for overflow; overflow for the slew of cars that the Detroit automakers can’t seem to sell, even when piling on thousands of dollars in incentives.

This is the ongoing story of the most trying year in the history of the automotive industry. And the ripple effects are endless. And it has no sympathy, no recourse for those deeply invested in this trade.

With 2008 now over, and the worst year for automotive sales in 26 years behind us, the threat of an even worse 2009 looms. This affects all auto companies, not only the domestics. But what can be done to re-invigorate sales? Besides the government somehow miraculously ending the credit crunch to help put more people in new vehicles, the auto companies can do what they’ve always done in the past, but what many have lost sight of in recent memory — recreate passion and excitement about their cars again.

Bring on the North American International Auto Show, based in Detroit, the original home of the automobile. This is where every year thousands of people from all over the world attend the largest auto extravaganza on the planet, and bear the cold weather to re-ignite their passion for one of the most emblematic symbols of the American fabric — the automobile.

While walking the show floor during press preview week, the description “world’s largest auto show” didn’t exactly ring true for 2009. First, the number of media representatives was well below average. Even a parking attendant said to me, “Not too many people this year, huh?” Where typically swarms of media people create havoc around simple tasks like parking, coat check, and lunch time, this year was extremely tame.

Second, the show floor was unusually open and lacking much of the glitz and pageantry of past shows. The largest automakers were all business at this event, touting in-vehicle technology, fuel efficiency, and electric cars. The glaring vacancy of Nissan, Infiniti, Land Rover, and Suzuki — and to a lesser degree Porsche, Rolls-Royce, Ferrari and Mitsubishi — left some gaping holes at this show, making way for companies like Fisker, Brilliance, and even the Center for Creative Studies to maintain a more prominent presence.

The 2009 show carried two overriding themes — gas alternatives and in-vehicle technology. With a lot at stake, the domestic auto companies delivered a strong showing. Easing up on the large productions of past shows to continue to position themselves as being on the road to profitability, the domestics focused on future technology that would require less of a reliance on oil, while also delivering on forward-thinking in-vehicle advancements.

I learned more about lithium ion batteries than I ever cared to know. It seems that by around 2012 every automaker will have a full electric vehicle. And inside the car there seems to be a lot going on, much of which could become major distractions to the actual driving of the vehicle. The technology is impressive and pretty amazing, but everyone’s trying to out-do each other on technology that’s essentially providing the same services — navigation, personalized music systems, gas station locators with real time pricing, and more.

While most automakers kept things low key this year — showcasing their fuel economy and technology over styling and sportiness — my guess is that when the public invades downtown Detroit to attend the show, they’re not going to be overly excited to see the new 50 mpg Prius, or too captivated with a voice that reads email back to you in your car.

Despite oil prices and economic factors, Americans have and will always love the cars that fulfill their needs — whether it’s a need for speed and muscle; or a need for a large four-wheel drive for family hauling and rough weather conditions; or it could be a car that has great fuel economy and is good for the environment. Americans want what they want, and in many cases that isn’t something small and boxy.

Vehicle sales in 2008 reflected the shift in consumer mindset to fuel economy. But the tail end of the year reflected the fact that the shift was only temporary. For the first time since 2000, sales of cars outshined trucks and SUVs, and shopping patterns on auto sites reflected similar trends. On Jumpstart Automotive Group’s properties, roughly 60 percent of consumer shopping in 2008 was geared toward cars vs. trucks and SUVs. During the middle part of the year — when fuel prices soared above $4 per gallon — a survey of Jumpstart shoppers revealed that consumers were most likely to purchase a 4-door sedan, followed by a hybrid vehicle. SUVs and pickup trucks were fifth and sixth, respectively.

Those mid-summer trends turned out to be smoke-and-mirrors, however. Jumpstart’s data reveals that in the fourth quarter, when fuel prices fell below $2 per gallon, change in consumer attitude was evident. Sedan and compact category shopping fell by nearly 50 percent on Jumpstart properties. SUV shopping fell to its lowest in September, and then rebounded to increase by about 30 percent by December. The truck category also saw about 25 percent growth in the latter months.

Keith Crain, editor of Automotive News, had a telling statement after the show: “Americans have short memories, and the demand for pickups and SUVs is quietly ramping up again. It may be temporary, but it demonstrates that to be successful in the United States, you must have a broad array of vehicles, from 45-mpg economy cars to high-horsepower trucks. … The trick will be learning switch production back and forth as U.S. consumer tastes change with each crisis.”

Nothing will come easy for the auto companies in 2009. They will need to be nimble in their decision-making, focused on the bottom line, and execute on superior products that consumers want. Environmental friendliness and fuel economy are important. But so is styling, horsepower, comfort, and utility.

The challenge for auto companies will be the ability to deliver on all of these desires. Here’s to a fruitful 2009.