German luxury cars claim share at Detroit show | Business| Economy and finance news from a German perspective | DW | 13.01.2014
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German luxury cars claim share at Detroit show

A host of new models will be unveiled at North America's most important auto show. Most German carmakers fare well in the US. Sports cars and economical models are in demand this year.

On the eve of the 2014 auto show, a small group of Detroit citizens gathered in front of the exhibition hall, loudly chanting "Germany to Michigan, Solidarity is gonna win" as reporters flocked to the building for a preview of shiny new models at the auto exhibition.

They were demonstrating for their hometown to overcome the crisis like Germany did. "Berlin has recovered but Detroit has not - the two most important things now are jobs and to keep people in their homes, and not have the banks throw them out," a protester explained.

In a city formally declared bankrupt last year, it's only at the North American International Auto Show (NAIAS) that there's any evidence of luxury and plenty.

Rundown, dilapidated houses and factory ruins line the streets from the airport to the exhibit halls at Detroit's Cobo Center. Citizens are turning their backs on the city, and moving away. Real estate prices are down: an entire block was on sale for all of $150, 000 (109,700 euros.) Not far from this barren urban landscape, however, General Motors, Ford and Chrysler have their production plants - and the three leading US carmakers are reporting profits for the first time in years.

Head start

Be that as it may - when it comes to dream cars, Americans yearn for German automobiles. One out of eight autos sold in the United States is German - a promising business indeed in a market of currently 15.6 million cars a year and an 8 percent growth rate, while the car market in Europe has long been stagnant. Not surprisingly, Daimler subsidiary Mercedes,BMW, Audi, VW and Porsche take the Detroit auto show very seriously and are out to score points with dazzling displays of new models like the new C-Class, the Porsche 911 Targa, a sports utility vehicle or the Mini Cooper.

Detroit Automesse 2014 Demonstranten

Detroit residents voice their grievances to reporters ahead of the press preview

"The German luxury brands have done a very good job in marketing and sales in the US," Bruce Belzowksi of the Transportation Research Institute at the University of Michigan says, adding "Mercedes beat BMW for the first time in the US."

"It's quite a horserace: buyers are very interested and buy a lot of the Mercedes and BMW products," Belzowski told DW. Mercedes in particular grew more quickly than the American market. Daimler CEO Dieter Zetsche plans to hold if not to increase the pace in 2014, with the new C-Class model that premiers in Detroit at the forefront. "Even in the past, the American market was the most important market for the C-Class," Zetsche told Deutsche Welle, adding the car has "important new features that make it even more attractive." The car owes its success to design, state-of-the-art technology, light weight and increased fuel efficiency, Zetsche says.

Homegrown mistakes

Meanwhile, compared to its German competitors as well as American and Japanese mass manufacturers like Ford, GM, Toyota or Honda, VW struggled last year.

With 407,704 cars, the Wolfsburg-based company sold almost seven percent fewer automobiles last year than in 2012. VW chief Martin Winterkorn pointed out the overall success of all VW brands, from Audi to Porsche, but stressed his determination to recover lost ground.

"Assume that we will make up for our losses with new products in 2014, including the new Golf station wagon and a variety of Beetle and Passat models," he told DW. "But don't forget, the VW group doubled its US sales over the past five years."

VW's recent failure to compete on the US market is home-grown, according to Bruce Belzowski. "VW is one of those full-line manufacturers that has just about everything but pick-up trucks," the auto expert says. "That is such a large segment in the US - not to have something in that segment is a disadvantage."

Cobo Center Detroit

Sports cars and economical cars are in big demand this year in Detroit

US Bestsellers

Ford is the best example. For the 32nd time in a row, and with 763,402 sales in 2013, the Ford F-Series pickup truck is the most successful car in the US. A successor to be introduced at the Detroit show is designed to continue the F-Series' success story.

Ahead of the 2014 auto show, VW chief Winterkorn announced the addition of a midsized sport utility vehicle to the brand's US portfolio. The seven-seater Cross Blue is to be launched in 2016. After all, SUVs and pickups make up almost half the American automobile market.

"Generally, the trend has been slow and steady growth since 2011," auto expert Belzowski says, and that is bound to continue in 2014, allowing carmakers to reach production levels akin to those before the crisis in 2008. Following disappointing sales, electric or hybrid cars aren't expected to play a leading role this year.

What we will see, both from US and German automakers, Belzowski says, are "vehicles that are fun to drive but that also get better fuel economy."

Audi chief Rupert Stadler pinpointed yet another trend: he plans to show his brand's digital potential, including piloted driving. "There's a focus on the car's entire digital network."

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