SMALL RULES: Some thoughts on the Detroit Motor Show — OK, the North American International Auto Show

It started when I picked up my rental car.  Since when was a Ford Focus a “mid-size?”  Since we had a of 55 mpg federal CAFE regulation staring us down.  This set the mood for the most important point of the Detroit Show.  Small is the new Big.

By the time I hit the floor on Monday, the Ford Fusion was the most talked about car in the show.  The focus used to be a compact car, but on Ford’s C/D segment, it’s now big enough to go head to head with the big dogs – Camry, Altima, Accord and Malibu – and after looking it over, it looks great.  Bottom line is that it will compete and with Fords attention to features and packaging, I expect they will be able to hold pricing and make the car reasonably profitable.  Also I am a big fan of the MyFord Touch® and competitive systems, I think Ford is at least one generation ahead, and GM and Toyota are hot on their heels, but that is another article.

GM showcased the new Spark, a car that could fit into the back of the recently shunned Hummer.  The new 2013 Malibu is an evolutionary and solid GM.  By the way, I upgraded my Focus to a 2011 Malibu and it was a pleasant surprise, well-appointed with solid powertrain and nice features.

Chrysler was a bit of a disappointment for me with the new Dodge Dart.  Admittedly the car looks pretty sexy — if it were on the road today.  Two complaints, it’s not on the road until next year, and sexy is not safe in the compact segment.  Sure it’ll get a few young folks to look at Dodge, but that segment requires appeal to older buyers – a Dodge product specialist tried valiantly to convince me not to worry as the company will have a more boring version for older buyers – reassuring.

That sums up my take on US (US/ITALIAN) makes. Overall, the Detroit makes are on par from a product perspective with transplants – however, their brand power is still a few years behind, meaning pricing is a risk.

The new powertrains are the biggest news for me.  Ford’s EcoBoostand GM’s Ecotek were the underlying story.  Electrics are sputtering, as internal combustion engines (ICE) are making huge strides, approaching HEV levels.

BOTTOM LINE: Who wins, engine suppliers like Conti, BW and others who have the turbo, direct injection and other systems needed by all makes.  Note the 10% pop in Borg Warner stock during the conference as the little bulb went off in investors heads that increase fuel economy tech demands may be more powerful that a poor macro economy in Europe.  Problem is whether you think the cat’s out of the bag already or not.   Also think about the read through for both pure EV and PHEV as we see ICE getting 40’s MPG at a lower cost and better margin.  As I’ve said before, too much capital is shooting at a stationary target while the competition is hitting a moving target for less.

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