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There has been no shortage of headlines summing up the mayhem reshaping the U.S. auto market as the '06 model year draws to a close. “Chrysler Turnaround Falters as Unsold Gas Guzzlers Fill Lots,” was one of hundreds in late September signaling a dramatic marketplace shift. ADVERTISEMENT Fullsize pickup trucks, as well as fullsize and midsize SUVs, the longstanding profit engines and market-share placeholders for domestic auto makers, are at extreme risk after changing consumer tastes, a summer of high gasoline prices and geopolitical concerns caused the bottom to drop out of these segments. Despite the fact gasoline prices have downshifted recently, the damage to the American psyche seems done. Buyers are flocking from the vehicles they deem old-school gas-guzzlers and aggressively pursuing other options. Now, 2007 will be a shake-out of those auto makers positioned to deal with the shift and those that are not. The Japanese auto makers already have deployed a new generation of subcompact fuel-sippers that are having an impact in several veins. Through August, Ward's lower-small segment, which includes the new Honda Fit, Nissan Versa and Toyota Yaris, is up 79% vs. like-2005, to a total of 178,685 units. In addition to saving fuel, these cars generally have upscale styling and interior trimmings that do not force buyers to think they're being punished for their frugality. But equally troubling for the backs-to-the-wall Ford Motor Co., General Motors Corp. and Chrysler Group, the popularity of these cars is fueling another trend: a resurgence of imports. Led by big hikes in import sales by Toyota Motor Corp., Volkswagen AG and Mazda Motor Corp., if the trend continues through the end of the year, 2006 will see the highest number of imported-vehicle sales in 17 years.
What are the domestic auto makers to do? Downsize to match their collectively shattered market share, which they're doing. And attempt to manage product portfolios still biased much too heavily toward pickups and SUVs. That's what makes Ford's Edge one of '07's most critical new models. The cross/utility vehicle simply must sell if Ford is to create a credible bridge from its flagging Explorer midsize SUV to the new-generation replacement for SUVs, the CUV. Buyers are fleeing the midsize-SUV segment, weary of oversized engines and the rude ride delivered by truck-frame underpinnings. More refined — and more economical — CUVs are the direct beneficiaries of the midsize-SUV exodus. The Edge appears to have the potential to be a winner. Styling and packaging are class-competitive (sheet metal for the Lincoln division's MKX variant is particularly arresting), and the new 3.5L DOHC V-6, at 265 hp and with what Ford powertrain engineers swear to be class-leading refinement, appears to have all the right stuff. The new Duratec 35 also goes into the Lincoln MKZ (formerly known as Zephyr) for '07, and all are backed by the new 6-speed automatic transaxle that Ford co-developed with GM. The chassis is another derivation of the Ford/Mazda CD3. There are front-wheel and all-wheel-drive variants of the Edge and MKX; the FWD Edge starts at $25,995, and the AWD Edge base price is $27,995, undercutting the best in the segment, including the well-positioned Nissan Murano. But Ford couldn't pick a more hapless time to launch the all-new Expedition and Lincoln Navigator counterpart. Worse, the '07 SUVs sport a designed-in extra-largeness to expand into the space vacated by the defunct Excursion. The carryover 5.4L DOHC V-8, though nice, will not make a sport sedan of these behemoths. GM's timing in launching all-new versions of its Chevrolet Silverado and GMC Sierra fullsize pickups is perilous as well, given that Ward's data shows sales in the segment down an ominous 14.8%. It's good that GM's franchise pickups are retooled totally for '07, but an almost 15% drop in a traditionally steady segment shows “lifestyle” pickup buyers may not lap up fullsizers with the same fervor they showed for the past decade or more. GM's trusting they will but is verifying by backing the launch of the GMT900 pickups with an ad budget reputedly in shouting distance of a half-billion dollars. We don't expect anything radical, but judging from the SUV variants and the half-truck, half-SUV Avalanche, which Ward's has driven, interior materials and design should set a new standard for pickups. Most of GM's boldly styled new pickups will be fitted with a carryover 5.3L OHV V-8, but extra money will win a new 6L variant, dealing out 355 hp. But if the big-bucks GMT900-based SUVs are any guide, GM will be saddling buyers with ambitious pricing in what might charitably be called a dicey environment, especially with the much ballyhooed Toyota Tundra debuting soon. No GM car this year is as important as the Saturn Aura, the new midsizer trying to battle the Japanese-made stalwarts, the Toyota Camry and Honda Accord. The Aura's mostly good, particularly the XR trim that uses GM's snappy, 252-hp 3.6L DOHC V-6. The styling is cautiously expressive, and the interior is miles ahead of anything Saturn's loyal buyers have yet enjoyed. The “global front-wheel-drive” chassis has yielded some decent results when used by GM's Adam Opel GmbH (Astra) and the Pontiac (G6). Aura may be the litmus test of whether the public is prepared to embrace American cars as equal to the all-conquering Japanese. GM also has a lot riding on the new-for-'07 GMC Acadia. This large-ish CUV is the first derived from the global large crossover architecture that also underpins the '07 Saturn Outlook and Buick Enclave. Power comes from the 3.6L DOHC V-6 now spreading throughout the GM empire. But in this case, it will be hard-pressed to move these hefty crossovers that seat up to eight and equally pressed to deliver the kind of fuel economy that represents a clear improvement over a contemporary midsize, truck-based SUV — even with the advent of GM's new 6-speed automatic. GM gets in the subcompact game with a heavily reengineered, Korean-built Chevrolet Aveo, which wears new sheet metal and interior fittings. Its 1.6L DOHC I-4 is outclassed, but pricing is right. Chrysler also desperately needs new cars and CUVs to transition away from trucks and cars that depend on its Hemi 5.7L V-8. Chrysler did a wonderful job crafting the Hemi's power-and-everything-else-be-damned image — one that now may suffer a reverse chic in the market. The Sebring comes as a complement to the well-received Caliber compact hatchback and 300-Series rear-drive flagship. The '07 Sebring offers a hazy amalgam of current Chrysler styling cues, upscale options and the auto maker's new 2.4L DOHC 4-cyl. “world” engine, with the tired corporate 2.7L and 3.5L V-6s as upgrade powertrain options. The big V-6 must be specified to get a class-competitive 6-speed automatic transmission; the two smaller engines are saddled with 4-speed automatics. Don't expect creaky V-6s and 4-speed automatics to equate to a showroom stampede. Chrysler's much-needed CUVs are being deployed by the Jeep division. The off-road specialist brand finally is getting its long-awaited new-product explosion, starting with the Compass, a tidily sized Toyota RAV4 and Honda CR-V competitor derived from the Caliber FWD/AWD architecture. Compass is the brand's first front-driver and first venture away from its offroad heritage and into cute-ute suburbia. Chiseled from the same underpinnings is the traditionally styled Patriot. FWD is standard, but the Patriot offers the choice of two AWD systems that likely are to be more familiar to Jeep loyalists. The 2.4L variant of the 4-cyl. world engine is standard for the Compass and Patriot. The engine hasn't proven to be a powerhouse when hooked to a continuously variable transmission in the Caliber but at least is available with a 5-speed manual in the Jeep crossovers. Will these “soft-roaders” lure back some of the volume Jeep stores have painfully ceded to the imports? That's a tough call. Equally interesting will be the market reaction to the marriage of Jeep's Grand Cherokee with the Mercedes-Benz unit's sweet new 3L DOHC V-6 turbodiesel. The diesel Grand Cherokee promises to be light years ahead of Jeep's disappointing first diesel effort, the now-defunct Liberty CRD, and could sell briskly if diesel's U.S. expansion follows the predicted path and Jeep's execution is acceptable. For the Asian auto makers, no '07 launch will be more scrutinized than Toyota's all-new Tundra fullsize pickup. Toyota may be tearing up the sales charts, but there's got to be a collective holding of breath as the auto maker prepares to launch the Tundra at a time when even pickup aficionados appear to be questioning their needs. The '07 Tundra, to be built at an all-new plant near San Antonio, TX, as well as Princeton, IN, is for the first time riding on a true fullsize footprint. There will be a 4L V-6 and 4.7L V-8 and an all-new 5.7L V-8. Going head-to-head with GM's new fullsizers is tough enough, but trying to convince skeptical buyers and battle a gas-price dilemma means nobody could envy Toyota's task. The fullsize pickup market is staggering, and Toyota's plan to double its Tundra sales to 200,000 units could mean tumult of high order. To offset the Tundra risk, the Camry's all-new and already on sale — and moving at a brisk pace. The Camry and new Yaris subcompact are combining for a healthy punch that mitigates some of Toyota's own truck and SUV liabilities, not to mention the faint whiff of dwindling interest in hybrid-electric vehicles. In its Lexus premium channel, the LS 460 flagship is all new with a strapping 380-hp 4.6L DOHC V-8 and is packed with a ridiculous array of techno-features and luxury amenities. The darn thing is smart enough to parallel park itself. It's also a huge year for Nissan Motor Co. Ltd. Nissan dealerships are not the beehives of activity they once were, and the OEM needs to get things rolling again with three critical new launches: the Altima midsizer, Sentra economy car and Versa subcompact. Versa already is in the market, sharing successful timing with Toyota's Yaris and the Honda Fit. The Sentra hits the ground with an all-new FWD platform and a 135-hp 2L DOHC 4-cyl. coupled to a standard CVT that enhances efficiency to the utmost. But the metalwork is a yawn. Altima, meanwhile, has to hit the ground running against the all-new Camry and Ford's surging Fusion. Nissan's midsizer also gets an all-new platform and a choice of 2.5L DOHC I-4 or 3.5L DOHC V-6 motivation, along with the choice of a 6-speed manual transmission or the CVT Nissan is anxious to proliferate throughout its model range. For its Infiniti upscale division, there's a new G35 sedan, the model that almost single-handedly saved the Infiniti franchise. The new G is a careful evolution, yet looks fresh enough to make a difference. The interior, always the car's weak point, has been convincingly restyled, and a heavy revision of the stellar 3.5L V-6 turns up the performance wick. Infiniti also has the sense to still offer a manual transmission. At Honda for '07, there is an all-new CR-V compact CUV that, in a contrarian twist for one of the Japanese Big Three, takes a big step stylistically but is barely changed mechanically. The '07 CR-V might even be considered risky, given that the substantially curvier styling departs from the boxy profile of the previous two generations. And the CR-V is the second-best selling nameplate in a highly competitive segment. The serious effort is at Honda's Acura premium unit, though, where there are two new CUVs: the new RDX compact (based on the CR-V platform) and an all-new MDX, the first remake of Acura's successful, sporty 7-seater. The MDX gets a thrusty new 3.7L DOHC V-6 that produces 300 hp. But this leather cocoon now has a chassis that is more aggressively tuned in an effort to upstage BMW and its soon-to-be-replaced X5. The RDX's claim to fame is extra refinement and a 2.3L turbocharged variant of the CR-V's 2.4L DOHC 4-cyl. that generates 240 hp. Target? That would be BMW again, this time the X3. There's still plenty of action at Hyundai Motor America this year, delivering another all-new midsize CUV, The re-engineered Santa Fe gets a new optional 3.3L DOHC V-6 (242 hp), in addition to Hyundai's stalwart 2.7L unit and comely new styling. Later next year, there will be a 7-seat CUV, the Veracruz, based on the Santa Fe platform. Hyundai also finally gets in the minivan game with the long-discussed Entourage, a not-so-veiled rebadging of the Sedona from sister auto maker Kia Motors Corp. And Suzuki Motor Corp. simply refuses to be ignored. Other than mighty Toyota, Suzuki is the U.S.' fastest-growing auto maker. Through August, Suzuki sales increased 30.7% vs. like-2005. The overall sales number, 73,380, still is miniscule, but Suzuki's philosophy appears to be matching changing consumer tastes. For '07, Suzuki has an all-new XL-7 midsize CUV, thanks to partner GM's “global compact crossover” underpinnings (think Saturn Vue). With GM's “high-feature” 3.6L DOHC V-6, the XL-7 can challenge just about anything in the segment. Suzuki also is offering the quirky SX4, a subcompact hatchback with standard AWD. Poor timing for a suddenly fuel-economy-conscious American market isn't limited to Detroit. Audi AG is launching its first fullsize CUV, the Q7, and although its body creases are as interesting as it gets in the box-with-4WD market, the 6- and 8-cyl. Q7 is likely to find sledding as tough as parent Volkswagen AG has found with the Q7's pudgy and pricey Touareg platform-mate. The third CUV to share this architecture, Porsche AG's Cayenne, also has run out of steam in the marketplace. VW, meanwhile, finally decided to launch its Golf hatchback here, but also decided to revive the Rabbit nameplate for the subcompact coming with perfect timing for a newly parsimonious American consumer. The Rabbit's power comes from the fizzy corporate 2.5L inline 5-cyl., which in this case develops 150 horses. But pricing and its Euro-crisp sheet metal make it an interesting alternative to the successful Honda Civic and Mazda3. DaimlerChrysler's Mercedes-Benz unit has a plethora of new models. The bread-and-butter E-Class is slightly restyled and comes to market (in 45 states at least) with the new Bluetec diesel system. A new 3L DOHC V-6 turbodiesel and some fancy exhaust aftertreatment get the E320 CDI emissions low enough to sell everywhere but in California and four other diesel-averse states, while achieving 37 mpg (6.4 L/100 km) on the highway. New for '07 is the huge CL coupe, based on the S-Class flagship architecture, with intoxicating power from the 5.5L DOHC V-8 and hulking twin-turbo V-12. And like Audi's Q7, Mercedes is late to the party in slapping the 3-pointed star on a 7-passenger variant of its M-Class, the GL-Class. The GL gives Mercedes entree to the 3-row CUV/SUV market. Offsetting the GL is the availability of turbodiesel power — the same 3L mill being used by the E-Class and Jeep — for the M-Class. Ford's Volvo Cars makes a more serious run at its European midsize rivals with an all-new S80 flagship. There is decent power from a new 3.2L inline 6-cyl., and AWD and a 4.4L DOHC V-8 are options. Land Rover, part of Ford's flagging Premier Automotive Group, has a vital play in its all-new LR2 compact CUV. Interest in Land Rover's relatively new big SUVs, the LR3 and Range Rover, diminished in direct proportion to high fuel prices, so the less bulky LR2 may be the key to Land Rover weathering the latest storm. The LR2's power comes from the Volvo-developed 3.2L inline 6-cyl., whose 230 hp is transmitted to all four wheels via a 6-speed automatic. Percent U.S. Import Sales Mix by Company
U.S. Light Vehicle Sales by Ward's Segment Group
© 2010 Penton Media, Inc. All rights reserved.
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