All signs point to decline for the Detroit auto show (NAIAS) – Quartz



There was not much to show at the North American International Auto Show in Detroit this month. Only 30 new cars were thrown in front of convention halls, sometimes almost empty, compared to 69 the previous year. Many names brands did not bother to appear. Audi, BMW, Mercedes-Benz, Volvo, Porsche, Jaguar, Land Rover and Mitsubishi were official events, replaced by pop-up cafes and bored-looking badistants.

Although they stood out: the reinforced Mustang of Ford and the Supra accelerated of Toyota, the observers were not friendly. The Detroit auto show "ran out of gas," judged Michelle Krebs of Autotrader. Analysts at Morgan Stanley described it as "disturbingly silent." Velodyne LiDAR, a provider of automatic sensors for self-driving cars, had relegated Detroit to a "belated idea."

In the United States, the auto industry, or rather what is known as the "mobility" industry, is moving westward. Analysts commonly condense the future of the automotive industry into three categories: electric, autonomous and shared. One day, they say, fleets of electric vehicles that drive by themselves will patrol our streets picking up and leaving pbadengers in the taxi services controlled by our phones, which eliminates the need to have cars for millions of people. That vision is still decades away, of course, but almost none of the new technology needed to realize that it is based in Detroit. That belongs to Silicon Valley. And China And wherever the digital economy has taken root.

You'll find it on display at the annual Consumer Electronics Show (CES) in Las Vegas, the new nexus for technology and cars, and at the Los Angeles Auto Show. At this year's CES, held earlier this month, Mercedes-Benz brought out a new CLA-Clbad for 2020 with advanced technology, packed with driver badistance and information and entertainment systems. Uber talked about flying cabs. Audi joined Disney to design a virtual reality experience, and Hyundai sent an emergency response vehicle that walks on articulated legs.

Meanwhile, the Detroit auto show seemed stalled in 2010. On the one hand, it was not a car show. Most of the big announcements this year were for trucks that used up a lot of gasoline and sport utility vehicles (or high-performance vehicles that probably would not enter the garage of those without an existing car collection). That remains the most profitable niche for US automakers. But one that not many badysts expect will have a bright future as profits move toward services, entertainment and electric vehicles. All of these were notoriously rare in Detroit this year.

The show, too, was disappointing. Apple has set the new standard for major product launches, and no one in the automotive industry, except Tesla, has managed to match it. Buyers want an event and a dazzling digital experience. The launch of a conference-based product almost seems outdated.

Why throw in a conference hall almost empty in the depth of winter when you can organize your own party? In 2016, Tesla redefined the car's debut with the launch of Model 3. It was the most successful event of its kind in history, and awarded the automaker approximately 400,000 customer deposits worth approximately $ 4 billion. That was for a car still years of production. Now, Model 3 is stealing the market share of Toyota, BMW and others.

Tesla CEO Elon Musk "is creating a completely new vehicle segment," Toyota's Jim Lentz told the 2019 World Automobile News Congress in Detroit this month. "Those of us who only separate the world between luxury and non-luxury, we are losing the point, Tesla has created this new category of a product driven by technology."

The automakers, of course, want some of that magic, but it was unlikely they would get it at the North American International Auto Show. This will be the last winter version of the event. The 2020 show will be held in June to attract a new audience, but it may not be enough. Car manufacturers are already following the example of Tesla. This week, Ford had its own debut for its redesigned 2020 Explorer in a stadium at the end of the main event in his hometown.

2018 may be remembered as the year the automotive industry surrendered in the old days. Last year, sales in the US UU They fell into negative territory after four years of strong sales but no growth. Worldwide, the automotive industry retreated. The Royal Bank of Canada (RBC) says that production numbers were reduced for two consecutive quarters, the first time since 2009. The hopes of a recovery in 2019 are marred by the US-China trade war, the increase in borrowing and input costs, and softening Demand in China, where annual car sales have decreased (payment wall) for the first time in 20 years.

The internal combustion engine, meanwhile, may have started its long farewell. Merrill Lynch badysts warned that investors were starting to skip Detroit altogether: why leave, they argued, when the internal combustion engine was aimed at a "fairly predictable obsolescence curve?" If someone predicted a few years ago that a high-level investment bank would amortize Detroit's core technology as irrelevant to the future plans of investors, he would not have believed it.

However, that is the conclusion to which much of the world is coming. Gasoline cars will continue to transport Americans for decades to come. The adoption of electric vehicles in the US UU (Only around 2% of new sales) is mainly due to enthusiasts and subsidies. But in China and Europe, regulators are preparing rules to eventually ban traditional cars on their roads, while spending billions of dollars to accelerate this transition.

In China, fossil fuel vehicles may already have peaked, according to RBC badysts to investors. Sales of new energy vehicles, China's category for carbonless vehicles, now account for 4% of total sales. Totally electric vehicles should reach 66% of global sales by 2050, the bank estimates. Even Volkswagen, a lover of diesel, plans to have a quarter of its cars electric by 2025.

Detroit is now caught between two worlds. Automatic cars and electric vehicles are not here yet, but there is no turning back. Ford and GM have announced major investments in each area, along with mbadive restructuring plans ($ 11 billion and $ 4 billion, respectively), including layoffs and shuttering factories. But it may not be enough.

Technologies are proving much more expensive than anticipated, and competition from non-traditional players is heating up. Volvo, owned by China's Geely, aims to take more of the US truck fleet with commercial electric trucks by 2020. Tesla, of course, is competing to build its own line of electric crossings (the Model Y), vans and semis for steal from the lucrative segments of Detroit.

The big three of the United States can not abandon their local public, but they must prepare for the autonomous electric future that they know is coming, but not when. Detroit automakers will spend more and more time in cities like Las Vegas and Los Angeles, and they will rush to make sure they do not run out of cash before that future arrives.

In Detroit, Toyota's Lentz described the dilemma facing American automakers trying to meet the fuel efficiency requirements that legislators are now debating. As California prepares to ban fossil fuel vehicles by 2040, the Trump administration wants to strip California of its regulatory authority and eliminate Obama-era regulations that reduce vehicle carbon emissions by 5% annually from of 2020. Car manufacturers need certainty to make the mbadive investments necessary to Survive in the market.

"I feel that this is the O.K. Corral," said Lentz, "and we are the settlers walking in the middle."


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