2008 LA Auto Show - Consumers Like What They See, But...
LOS ANGELES November 22, 2008; Dan Strumpf writing for the AP reported that consumers at Los Angeles Auto Show like what they see, but few are in the market these days.
Small-business owner Greg Mohr was hopping in and out of cars at the Los Angeles Auto Show, but he isn't in the market to buy one. Neither are retirees Greg and Pinkie Stanley, or trucker Jorge Vidrio.
"We're in the market if the prices were more accessible," said Vidrio, 35. "Everything's so overpriced, especially for the economy that we're in."
The crowds at the show are a reluctant bunch this year. Anxious about the economy, the future of the Detroit Three automakers and the unpredictability of gas prices, few said they had any intention of buying a new car anytime soon. Those who did said they were either downsizing or looking for something with top-notch gas mileage. Nearly all had major reservations about a bailout of the U.S. auto industry.
Mohr, 50, said that under normal circumstances, he would be looking for a new car. He recently dumped his Lexus sport utility vehicle, leaving his four-person family with just a Volkswagen Beetle.
But, as he peered at a Jeep Wrangler at the Los Angeles Convention Center, he said the economic downturn has taken a toll on his dentistry business. He's holding back on any new car purchase for at least another six months.
"We would like another car," he said. "It's a little inconvenient only having one ... but it's just not the right time."
U.S. auto sales have fallen about 14 percent in the first 10 months of the year. In October, they plunged 32 percent to the lowest rate in more than 25 years and show no signs of significant improvement anytime soon.
"People are worried in general about their job security. Anytime you start talking about recession, people will scale back their purchasing, which they have," said Lincoln Merrihew, auto analyst with the market research firm TNS. "A car is something that's fairly easy to postpone."
The crowds at the auto show, which opened to the public Friday after two days of media previews, reflected those worries. Art Sorensen, a 32-year-old landscape designer, said he was in the market for a vehicle, but business is slow now that California's construction boom has quieted. If he buys anything, it won't be at least until next summer, and whatever it is will have to be super fuel-efficient, he said.
"This is the car I came to see," Sorensen said, pointing to Honda Motor Co.'s Insight hybrid, which the Japanese automaker expects to challenge the Toyota Prius when it goes on sale next year. "I'm kind of like, do I go the diesel route, or do I go the hybrid route? Obviously both are a big step in the right direction from where I'm at right now."
Although fuel prices are now less than half what they were when the national average surpassed $4 a gallon in July, many still said their next car purchase would be a gas sipper.
"People seem to be looking more at the fuel-economy cars more than they used to," said Devon James, 43, who already owns a Camry hybrid from Toyota Motor Corp.
The woes of General Motors Corp., Ford Motor Co. and Chrysler LLC have overshadowed much of the glitz in L.A., the first stop in the annual circuit of major U.S. shows that will hit Detroit, Chicago and New York over the next five months. The companies' CEOs spent the last week making their case to Congress for $25 billion in federal loans, claiming the nation's financial crisis has put their very existence in peril.
Congressional leaders have demanded a detailed plan for how the companies will achieve long-term viability, and the future of any bailout won't be resolved until after the show here ends Nov. 30. But the U.S. automakers' presence seemed to reflect their dire state.
Ford has the most impressive spread -- indeed, it is the only one with enough cash and credit to survive through next year. The Dearborn, Mich., company showed off redesigned Ford Fusion and Mercury Milan sedans unveiled Wednesday, including hybrid models that can go up to 700 miles on one tank of gas. It also sported a giant Mustang display and a miniature Fusion race car track.
The mood was more subdued at GM. Two weeks ago, the automaker canceled the unveilings it had planned for the show, but its Chevrolet Volt -- the extended-range electric vehicle that holds many of the company's hopes for a turnaround -- attracted a modest crowd.
Chrysler's area, however, was almost funereal. Chrysler also abstained from any vehicle debuts, though it did showcase the three electric prototypes -- a Dodge, a Jeep and a Town & Country minivan -- that it unveiled in September.
But the crowds were thin. In contrast to the concert-like lighting and sound at Nissan Motor Co.'s adjacent space, the convention center's dim fluorescent lights were all that lit Chrysler's vehicles. On Friday afternoon, the Stanleys were the only ones paying attention to a Chrysler rep's sales pitch for the Town & Country EV.
"I was just being polite," said Gene Stanley, 71, as the couple walked to the next exhibit.
"You can see how much money is being spent on this," said Pinkie Stanley, 65. "Those folks that have a good budget are spending a lot more money here than these guys, who are just sort of marking time."
Some visitors, like Ron Myers, 65, were more sympathetic to the Detroit Three's troubles. Myers, a longtime truck owner, said he was in the market for a GMC Sierra 1500 pickup. He has a long history of owning Ford and GM trucks, and he and his wife like having a pickup for the occasions they need to haul things around.
"They never made better cars," the retired firefighter said of GM's lineup.
Ask him about the bailout, though, and like many at the show, his opinions get complicated. Myers said he remains impressed with GM's products but blames the company's current predicament on its costly union obligations.
He said he'd like to see GM get assistance, but it has to find a way to reduce its high labor costs.
"I'm union, but they have to be competitive," he said. "It's a global market."