Car Makers at New York Auto Show Still Bringing Sexy Back

There's at least two ways to interpret the offerings the auto industry rolled out at the NYAS: that they are completely out of touch with reality, or that they understand that despite the snooching and beeping in the media, North Americans refuse to give up their big, studly, high-horsepower vehicles.

Reprinted in full from the WSJ:

Horsepower Nation:
New Car Models Boast Speed, Size, Power While Washington Buzzes About Biofuel, At New York Auto Show, Big Is Beautiful
By MIKE SPECTOR and JOSEPH B. WHITE April 5, 2007; Page B1
The Supreme Court may have set the stage this week for aggressive new regulation of auto emissions, and Congress may want the government to take global warming more seriously -- but for car makers, America is still Horsepower Nation.

The 2008 Ford Shelby GT500KR, which boasts a 5.4-liter supercharged V8 engine. At the New York International Auto Show, which opens to the public Friday and runs through April 15, major auto makers are spotlighting a flock of new production and concept models that appeal to the U.S. car industry's traditional marketing values: Speed, Size and Power.

"It's fine for politicians to rumble about these things, but the world isn't going to turn around and drive small cars tomorrow," says Johan de Nysschen, head of Audi's U.S. marketing arm.

Car makers did offer a few nods to the small-is-beautiful aesthetic -- such as a trio of tiny Chevrolet prototypes General Motors Corp. displayed Wednesday. But GM was equally eager to promote a pair of Buick "Super" models with V-8 engines rated at close to 300 horsepower. GM also touted a new version of its Hummer H3 sport-utility vehicle with a 295 horsepower V-8 engine. A standard H3 has a five cylinder engine rated at 242 horsepower and 15 miles per gallon city, 19 highway.

The hefty horsepower flaunted by some models unveiled at the auto show can't be put to full use on regular U.S. roads with posted speed limits. But car makers juice up their products anyway in an effort to lure auto enthusiasts who crave power and speed.

Ford Motor Co. opened its auto show presentation yesterday by showing a new, ultra powerful version of its Mustang muscle car. Dubbed the Shelby GT500KR, the new Mustang boasts a 5.4-liter supercharged V8 engine with an upgrade racing pack that boosts output close to 540 horsepower.

WSJ's Mike Spector reports from the New York Auto Show on the flock of new, high-octane vehicles. The car, available in limited numbers next spring, is "the most powerful Mustang ever," said Mark Fields, Ford's executive vice president. The car's namesake, race-car driver turned designer Carroll Shelby, said Mustang went from "a race car that you could take out on the street to a street car that you can take out to the race track."

Ford also promoted the Ford F-150 Foose, a custom pickup designed by street rod designer Chip Foose. The truck uses a 450-horsepower supercharged V8 engine that puts out 500 pound-feet of torque. Ford says the Foose will be the most powerful half-ton pickup when it hits the market next year. A little while later, amid showers of sparks and fire, DaimlerChrysler AG's Mercedes-Benz went out of its way to re-emphasize its commitment to uber-performance. Mercedes's CL65 AMG features a 6-liter, 604-horsepower, V12 engine that reaches 60 miles per hour in 4.2 seconds. Mercedes will produce just 40 of these vehicles, including 18 in the U.S.

The Auto Show Tracker offers news, images and analysis of the 2007 New York Auto Show.To complement that supercar? The Mercedes CLK63 AMG Black Series, which Mercedes executives say is a "street-legal version" of a race car. The car has a 500 horsepower version of the AMG 6.3 liter V8 engine, which goes from 0 to 60 in 4.1 seconds, and a shell of a back seat -- the better to cut weight so the car can more quickly achieve its top speed of 186 miles per hour.

Not to be outdone, Volkswagen AG's Audi luxury brand featured a sleek new sports coupe, the S5, with a 354 horsepower V-8 that can boost the car to 60 miles per hour in 5.1 seconds.

It's not clear whether consumers worried about gas prices will embrace high horsepower across the board. Last year, consumers shifted to passenger cars and away from pickup trucks and SUVs amid skyrocketing fuel prices. A declining housing market exacerbated matters, as slowing home construction damped demand for pickups -- products that U.S. auto makers rely on more heavily than their European and Japanese counterparts for high margins. U.S. light truck sales were off 5.9% last year, according to Autodata Corp., while passenger car sales increased modestly.

The 2008 Hummer H3 Alpha with a 295 horsepower V-8 engine. Still, there were some signs suggesting that auto makers could be safe touting high-priced powerful vehicles to enthusiasts with cash to burn. Ford Mustang sales increased slightly last year, for example. Various Mercedes models posted mix results, but overall its sales rose 10.6%. Hummer sales remained strong for 2006, up 26%.

Mike Jackson, chief executive of AutoNation Inc., the nation's largest publicly traded dealership chain, says fuel efficiency has consistently ranked behind cup holders and sound systems in consumer desires over the past 20 years. "You have to look past what the consumer says they're going to do and the moment where they write a check," says Mr. Jackson. "That's the moment of truth. They want size and speed."

But some customers are clearly asking for better fuel economy, as well: Toyota Motor Corp.'s Yaris, which gets 34 miles per gallon in city and 39 mph highway for its automatic version, sold about 2,000 more cars in March than February. Honda Civic hybrid sales increased nearly 21% last year.

Mike Stanton, head of the Association of International Automobile Manufacturers, which represents car makers such as Toyota, Honda Motor Co., and Nissan Motor Co., says auto makers find themselves in a conundrum when it comes to fuel economy. He says that the oil shock in the 1970s didn't lead consumers toward more fuel efficient vehicles en masse as many expected. "We don't know what it's going to take to get Joe-six-pack out of his SUV and into a Yaris," says Mr. Stanton. "How do we provide and meet consumer expectations at the same time?"

Car makers are getting better at using technology to squeeze out more power without decreasing fuel efficiency. But environmentalists and government regulators criticize the industry for using technology -- such as more sophisticated fuel control systems -- to boost power instead of mileage.

The 2008 Mercedes-Benz C350 Sport Of course, auto makers are also working on vehicles that get better fuel economy, and have been talking up those efforts in Washington, D.C.

Toyota has led the way in marketing gasoline-electric hybrids, with the Prius sedan and hybrid versions of its Highlander wagon and Camry midsize sedan. Still, the Japanese car maker has started offering incentives to help sell the Prius for the first time this year. And at the New York Auto Show, one of Toyota's featured models is a big, V-8 powered Lexus SUV.

GM, Ford and Chrysler visited the White House last week and showed President Bush three so-called flex-fuel vehicles, which are capable of running on biofuels or conventional fuels like gasoline or diesel: GM's E85-capable Chevrolet Impala, which can run on a blend of 85% ethanol and 15% gasoline; Ford's Edge HySeries, an electric plug-in vehicle with a fuel-cell generator that isn't yet in production and Chrysler's biodiesel-capable Jeep Grand Cherokee. Biodiesel is a diesel blended with renewable fuels like soybeans. The blend has lower emissions than regular diesel. Detroit's Big Three auto makers have pledged to make half of their fleets E85 or biodiesel-capable by 2012.

The 2008 Ford F-150 Foose Truck has a supercharged 5.4-liter V-8 delivering 450 horsepower. But auto makers -- who stress making such vehicles successful requires upped alternative energy production, more alternative-fuel capable filling stations and government investment in better technology for electric plug-ins -- aren't exactly clamoring for the government to mandate higher fuel efficiency standards.

Although the overall luxury market is "stagnant," Audi's Mr. de Nysschen says demand for large luxury SUV's -- among the least efficient models sold in the U.S. -- is growing. Mr. de Nysschen says his company will respond to pressure for better fuel efficiency by bringing to the U.S. in late 2008 versions of its Q7 large luxury crossover wagon with diesel and hybrid gasoline-electric power plants.

Ford President and Chief Executive Officer Alan Mulally says the Supreme Court ruling earlier this week that federal environmental regulators have a duty to consider limits on the carbon dioxide chugging out of vehicle tailpipes made him even more committed to improve fuel efficiency, develop alternative fuels technology and advanced engines.

"The citizens of the U.S. are really going to decide what we want to do about energy and what do we want to do about the environment," Mr. Mulally said in a dialogue with reporters on the sidelines of the show. "The cars you see today are what customers want. The customers are going to decide, not Ford."

General Motors vice chairman for product development Robert Lutz says shaving horsepower isn't the solution to cutting CO2 emissions. Instead, he says the government should help auto makers invest in "transformational" technology such as plug-in hybrids. He challenges industry critics to "come to my office. Show us your technology.... If the technology were readily and easily available what on earth would be our motive for withholding it?"

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