Detroit shows some restraint in annual auto event

ByABC News
January 13, 2009, 11:33 AM

DETROIT -- A headline feature at this year's North American International Auto Show is a test track in the basement of Cobo Center, a -mile layout landscaped with trees and a waterfall.

The reason there's room for it, though, is that many big players pulled out or cut back on display space for this year's show, which began with press days this week.

Six automakers are absent this year Nissan, Mitsubishi, Suzuki, Land Rover, Rolls-Royce and Ferrari. That opened premium space on the main floor for the likes of Smart and electric-carmaker Tesla.

"Some manufacturers canceled, yes. Perfect world, you'd like to keep them all," acknowledges Joe Serra, senior co-chairman of the show. "We were saddened" by the dropouts and cutbacks, which have dominoed through lodging, transportation, catering and restaurant businesses here.

Tight credit, shrinking home values and rising unemployment coalesced into the auto industry's worst nightmare. And one of the world's biggest and most important auto exhibitions has been reshaped to match the recession and still-shrinking car sales.

"It's grim," says Mike Jackson, CEO of dealership network AutoNation. "I've been to funerals with more smiles."

Sales of new cars and trucks last year fell 18% to 13.2 million, lowest since 1992, according to Autodata. Sales could fall 22% more this year to an almost unbelievable 10.3 million, according to forecaster IHS Global Insight.

"We're not making projections about (sales) volume, for Toyota or the industry. We're not playing games, we just don't know how bad it'll get," says Jim Lentz, president of Toyota Motor Sales, the Japanese automaker's U.S. marketing unit.

Putting the best face on it

It's hard to throw an automotive celebration when the industry is in tatters, but most automakers have soldiered on.

Detroit, more than any show, is the face of the auto industry to millions of would-be car buyers. If this show, open to the public Saturday through Jan. 25, were dreary, that could dampen buyers' interest even more. Interesting vehicles, after all, are the only product automakers have to sell.