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 CAR GUIDE > CAR NEWS > Domestic carmakers to launch '04 offensive, take on imports


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DETROIT, Michigan (AFP) - Two classic American automobiles will be center stage at next month's Detroit auto show, heralding what one automaker is calling the "year of the car".

General Motors Corp. (GM) and the Ford Motor Co. will take the wraps off a new Corvette and a new Mustang -- the most recognizable of a slew of new car products that will debut at the show.

Many of those vehicles will come from the stables of domestic automakers, who are revamping their car line-ups in a move that will take them head-to-head with imports like Toyota and Honda that dominate this part of the market.

Any shake-out on the car side of the business is likely to be slow, but with new products to drive sales, the domestics will "be more of a force and are going to make it a horse race," predicted Alan Starling, chairman of the National Automobile Dealers Association.

The full results of this offensive on the passenger car market will not be seen until 2005, because of the staggered pace of introductions, but domestic producers certainly have some ground to make up, analysts point out.

The Toyota Camry and the Honda Accord have monopolized the top-selling car spot since 1997 and Toyota passed Ford this year to gain the lead in US car sales.

The Japanese automaker sold 800,079 units through November to overtake Ford branded cars (739,948), according to figures from the trade publication, Automotive News.

GM took third place with 726,897 units.

The Big Three have concentrated on their cash cows -- light trucks -- in recent years, riding a wave of popular demand for sport-utility vehicles, pick-ups and crossovers.

In 2003, Ford's only car update was a minor redesign to its Crown Victoria sedan, according to the automotive analysis firm J.D. Power and Associates.

To some extent, "the emphasis on cars this year is somewhat of the hangover effect of the majority of everyone's emphasis on the truck side in recent years," said Jeff Brodosky, a J.D. Power and Associates analyst based in Detroit.

"Automakers are kind of rebounding from trucks with cars this year."

But it's not just an exercise in marketing: Ford and DaimlerChrysler's Chrysler Group, which have lost market share this year as they traded sales volume for a richer mix, are counting on these vehicles to deliver badly-needed profits.

Jim Padilla, executive vice president of Ford's North American operations, said recently that its new introductions this year should account for more than 1.2 million units of volume - or nearly one-third of its US sales.

The world's number two automaker will showcase five cars at North America's premier automobile salon next month, including the Five Hundred sedan, a Mercury Montego sedan, and a reworked Focus sedan.

GM, will be battling back with six new cars in 2004, including a sixth-generation Corvette and the Pontiac G6 midsize sedan, while Chrysler is hoping to make a splash with its new rear-wheel-drive cars, the Chrysler 300C and Dodge Magnum.

However, some analysts are a little skeptical of the hype.

Jim Hall, vice president of industry analysis for AutoPacific, an automotive research firm in Tustin, California, grumbled that many of these introductions are long overdue, having been postponed to make way for truck launches.

"A bunch of these cars should have come out years ago," he said.

A case in point is GM's Chevrolet Cobalt, which will be unveiled at the Los Angeles auto show next week -- at least a year behind schedule, according to Hall.

Instead the outdated version, called the Cavalier, is selling at a rate of about 21,000 units per month and GM's incentives are so high on the car that it stands to lose an average of 1,000 dollars per unit, according to J.D. Power.

Timing aside, the onslaught of new cars could pose a serious challenge to Toyota that is not planning to add any new or redesigned Toyota car models to its line-up this year.

"Toyota is hardly going to collapse, but they're finally starting to get some serious competition from somebody other than Honda," said Art Spinella, president of CNW Marketing Research in Bandon, Oregon.

Don Esmond, general manager of Toyota's US division, shrugged off the comments, saying "our competitors may get a shot in the arm from those products, but we're not looking to donate any blood next year."

"We're pretty confident with the lineup we have now. We're not forecasting any of those car lines to go down."

The annual North American International Auto Show opens to the media, Sunday, January 4 and runs through January 19.

Source: U.S. National - AFP, Sat Dec 27.




 CAR GUIDE > CAR NEWS > Domestic carmakers to launch '04 offensive, take on imports

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