Luxury brands absent from Detroit Auto Show

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Luxury brands absent from Detroit Auto Show

Last year was the U.S. auto industry’s best year ever, breaking a record that stood for a decade and a half.

Which is why the Detroit Auto Show, which opens this week, is crucial. When it opens to the press today, automakers must demonstrate how they plan to protect their ample momentum from 2015. It’s first chance they’ll have to show their latest wares stateside before they continue the auto show season in Geneva, Beijing, Paris, New York and Los Angeles.

As we know, first impressions are crucial. They’ve got their work cut out for them.

Sales last year rose nearly 6 percent over 2014 and surpassed the previous annual record of 17.35 million units the U.S. auto industry set in 2000. Perfect market conditions set up record profits at virtually all automakers, most of which enjoy far healthier financial status than they did in 2000.

Luxury automakers did just as well. Jaguar Land Rover and Tesla led the pack, with each brand’s sales up more than 26 percent over last year. Audi, Bentley, Lexus, and Porsche each turned in double-digit percentage gains, too.

Credit the success, especially in premium brands, to low gas prices and interest rates, low unemployment, and the relatively old age of the current fleet of cars on U.S. roads.

“Luxury has benefited tremendously from the current environment,” said Akshay Anand, an analyst for Kelley Blue Book.

The challenge? Possibly, none of those conditions will apply in 2016.

“We might well find that it will be impossible for automakers to top their 2015 U.S. sales,” said Jack Nerad, executive editorial director and market analyst for Kelley Blue Book. “Manufacturers and dealers worked harder and harder - and spent more and more - through the year to achieve the sales record in 2015. The likelihood of them continuing to ramp up incentives and discounts as 2016 rolls on is not strong.”

And while the economy seems to be slowing just as fear emanates from China, interest rates are expected to continue to rise through 2016.

“None of the current news is good for overall auto sales,” Nerad said.

In fact, what we can expect from the luxury cadre next week in Detroit is a lot of silence. Bentley, Jaguar, Land Rover, Maserati, and Rolls-Royce have all said they will not show officially during the event, which opens to the public on Jan. 16. (All those brands did show in 2015.) MINI, Maserati, McLaren, and Ferrari will also skip this year’s doings. Lamborghini is sending some executives, but it won’t show anything new.

“The Detroit show doesn’t align with our brand strategy this year,” a rep from Bentley told me.

If you must see green-power cars in Detroit, look for Audi’s e-Tron Quattro concepts and maybe Porsche’s electric Mission E concept on the stand. But electric superstar Tesla won’t even attend, and while Fisker used to make electric cars, its $300,000 Force 1 is not one. (Do view that Force 1, though: It has a Henrik Fisker-designed carbon-fiber body on what he says will be a front-engine American production car that will be come out in an initial run of fewer than 50 cars.)

Here’s what not to look for: autonomous driving capabilities. Even though Ford and GM have both hyped self- driving machines, and the recent CES show was chock-full of prototypes, liability concerns will prevent them from becoming a realized dream anytime soon.

Rather, look for sound and safety technology that’s tied in with your cell phone and applicable to your daily life.

“When [modern consumers] get into their cars, they expect to stay connected with simple and easy smartphone integration,” said Rachelle Petusky, an Autotrader research analyst. “The manufacturers who blend that with autonomous features are the ones who will win.”

Bloomberg


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