DETROIT AUTO SHOW: Now Which Way Is Up?

Looking for direction in Detroit
Special Detroit Coverage
By August Cole, CBS.MarketWatch.com

CLICK4MORE from CBS.MarketWatch.com

SAN FRANCISCO Jan. 3, 2004; (CBS.MW) -- Imagine waking up in Detroit with a sun rising in the west and a toilet that flushes counterclockwise. Don't blame a late night at the casino. Blame the auto industry.

Disorientation may be the most important theme of the upcoming 2004 North American International Auto Show, which opens its doors to media Sunday and to the public about a week later.

Design and manufacturing trends that drove some of the strongest auto sales ever during the past few years are about to be turned on their head.

Take Honda. After making its name with four-door staples like the Accord and the Civic, the Japanese automaker is unveiling a long-awaited pickup concept. Passing up the chance to show the world its take on the truck at the Los Angeles auto show, the company is instead going for maximum effect by unveiling it in Motown.

The big domestic manufacturers, meaning Ford Motor, GM and Chrysler, are rediscovering their prowess in the car-building business after pumping out millions and millions of highly profitable SUVs and pickups.

These paradigm shifts are great news for the industry, and consumers, as a neglected family of affordable vehicles gets some attention.

And this year the industry's financial front won't be as significant as in the recent past. The continued debate over cut-rate financing and big rebates will rage, but other outstanding issues have been settled. New contracts with the UAW are in place, while pension concerns have abated at General Motors, and Ford's turnaround effort is well under way after a pivotal introduction of a new truck last year at the show.

That helps turn the attention on the gleaming metal.

Show time

Many of the introductions at the show will reflect a new attention to the growing gap between North American car production and truck production. Pickup trucks and SUVs outsell cars, and that's likely to continue in 2004.

According to data from Ward's Automotive Reports, North American auto plants in 2003 produced almost 10 percent fewer cars than in 2002 but 4 percent more trucks.

Now that may change.

"The Big 3 have lost more than 21 points of market share in passenger cars over the past 10 years, a flood of new product in 2004 should help stem the tide," wrote CSFB analyst Christopher Ceraso in a research note ahead of the show.

The U.S. market is saturated with SUVs and trucks now that almost every company, even Porsche, has a sport utility vehicle on the lot. The competition drove aggressive pricing and improvements in safety and performance, a trend that will continue through next year even as the car market comes back into focus.

Ford has gone so far as to say 2004 is all about cars, a fitting gesture considering that its new Mustang coupe, the 500 sedan, the Freestyle wagon and other new cars together are as important to the No. 2 automaker's turnaround as the kingmaker F-150 pickup. The blue-oval brand's production versions on display at the show will reflect that this is the "year of the car."

Even Ford-owned Land Rover will reveal a concept SUV called the Range Stormer with carlike qualities. It's a tack that worked with the current Freelander.

General Motors' thunder will come from the new Corvette coupe, called the C6. Though photos of the Vette slipped out ahead of the show, gauging the car's presence is an essential part of determining if the redesign is a success.

And DaimlerChrysler's Chrysler Group will roll out a production version of a new broad-shouldered sedan, called the 300C.

Making news along with Honda in the truck and SUV segment will be Toyota's Lexus, with the production version of the hybrid gasoline-electric-powered RX-300, a vehicle that promises to be less thirsty but as powerful as its V-8-powered corporate cousins. Another headline-maker will be a big Toyota truck powered by a hybrid engine, guaranteed to test common perceptions of what a pickup should be.

The high-end automakers aren't neglecting Detroit, either. The stateside debut of a totally new Ferrari is another sign that this year is going to be exceptional for the car market.

So leave your expectations at the door, and don't worry about which way is up

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