Last updated: January 9, 2011 8:47 pm

Non-US carmakers try to steal Detroit show

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For almost a decade, Chrysler turned a disused fire station in downtown Detroit into a restaurant to entertain dealers, suppliers and journalists during the motor city’s annual auto show.

But in a sign of how times are changing not only at the show but in the US car industry at large, this year’s Firehouse host will be Volkswagen.

“Detroit has become a much more diversified show than in previous years,” says Rebecca Lindland, analyst at IHS Automotive, a consultancy. “It’s not just about American muscle cars.”

VW is among several carmakers that for many years were scarcely noticed in the US, but are now aggressively chasing the market leaders – General Motors, Ford Motor and Toyota. Their advances point to growing fragmentation of the US car market, following the pattern in Europe.

VW’s sales climbed by 20 per cent last year and its luxury Audi brand grew 23 per cent. By contrast, Ford, the best performer among the top three, gained 19 per cent.

South Korea’s Hyundai now boasts a 4.6 per cent market share, up from 2.9 per cent in 2007. Rival carmakers invariably cite Hyundai among their most respected adversaries.

A Chrysler 300 sedan

Chrysler will display a sleeker version of its big 300 sedan designed to capture the brand’s more refined image

Another is Subaru, whose sales have rocketed by 50 per cent during the past two years, reaching a record in 2010. Hyundai, its sister company Kia and Subaru were the only carmakers that lifted sales in the depths of the recession in 2009.

Chris Ceraso, analyst at Credit Suisse, expects that new models will further boost Hyundai, Kia and VW this year.

These carmakers will capture much of the limelight in Detroit this week. VW is due to lift the wraps on the as-yet-unnamed midsized sedan to be built at its first US assembly plant in Chattanooga, Tennessee.

Porsche, which has agreed to merge with VW, will return to the show for the first time since 2007. It promises to reveal a “spectacular” concept car based on the plug-in hybrid 918 Spyder unveiled in Geneva last year.

Hyundai will show the production version of its Veloster sport coupé, billed as the vanguard for a new brand image that offers top-end features at mass-market prices. Hyundai has compared the Veloster to the Mini Clubman.

For most of the leading carmakers, the Detroit show presents an opportunity to demonstrate that they are shaking off the setbacks of the past few years.

General Motors and Chrysler are on the road to recovery from their 2009 bail-outs and bankruptcy restructurings. But they have yet to win back the car buyers whom they lost to foreign rivals and to Ford as their financial troubles deepened.

GM is seeking to broaden the appeal of its Buick brand to younger buyers with this week’s unveiling of the Verano, Buick’s first compact model. The even smaller Chevrolet Sonic is an attempt by the number-one Detroit carmaker to regain a foothold in a segment now dominated by foreign rivals.

However, the Verano and Sonic will not go on sale for another year or so. With relatively few other new models in the pipeline, Mr Ceraso expects GM’s market share to slip below 19 per cent this year.

Chrysler will display a new, sleeker version of its big 300 sedan, designed to capture the more refined image adopted by the brand since Fiat took day-to-day control 18 months ago.

Helped by generous discounts and hefty sales to car-rental operators and other fleet owners, Chrysler has moved more metal over the past 18 months than many industry observers thought possible. Even so, its market share, at 8.9 per cent, remains far below 2007’s 12.9 per cent.

Toyota faces one of the biggest challenges. With its reputation battered by mass recalls, it was one of only a handful of carmakers whose US business shrank last year. It is banking on a slew of new models to help restore its reputation. One, a station-wagon variant of the Prius hybrid hatchback, will make its debut in Detroit.

Akio Toyoda, Toyota’s chief executive, will be at the show for the unveiling. The company dropped hints last week that it will have more to talk about than just a new product.

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