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OEMs Differ, More or Less, on Issues Facing Industry

OEMs Differ, More or Less, on Issues Facing Industry

WardsAuto takes the pulse of the U.S. industry with a survey of top auto maker executives.

As the global economy flirts with a double-dip recession, consumer confidence lags and pending U.S. fuel-economy regulations weigh heavily on auto makers, WardsAuto queries the U.S industry’s movers and shakers. Fielding questions are:

  • Reid Bigland, Chrysler sales chief and Dodge-brand president and CEO.
  • Audi of America President Johan de Nysschen.
  • Mark Fields, Ford president-the Americas.
  • Bill Krueger, vice chairman-Nissan Americas.
  • Kia Motors America’s Tom Loveless, vice president-sales.
  • Doug Speck, Volvo Cars acting senior vice president-marketing sales and customer service and president-Volvo Cars North America.

What follows is a lightly edited transcript of interviews that suggest there is considerable agreement on some issues and room for debate on others.

WardsAuto: Has the economic recovery taken hold, or do you fear the U.S. is headed for a double-dip recession?

Fields: We are seeing signs of growth in the U.S. market. It’s moderate growth, ramping up more slowly than any of us would like or, in fact, expected earlier this year. But it is growth, and it leads us to believe that the U.S. economy remains in recovery mode.

De Nysschen: We interpret several leading indicators as signaling positive economic development ahead. We are very optimistic about the near-term future prospects.

Krueger: Nissan has seen steady growth in our U.S. sales throughout 2011, and we expect the fourth quarter to be the best quarter of the year. Next year, we expect our business to continue to get stronger.

Bigland: I am not exactly sure what people mean by “a double-dip.” If they mean we are going back to the second half of 2008/2009 where the credit markets were frozen, U.S. new vehicle sales hit 10 million annual units and the Dow was flirting with 6,000, I don’t think so.

Loveless: While many of the key economic indicators such as housing and unemployment have not improved, the good news is that the auto industry as a whole is up from 2010 and will continue to elevate slightly next year. The bad news is that we expect the economy will continue to be a challenge.

Speck: I have a gut feeling that the answer is, neither. I think the economy is still struggling and that it will be a long upward climb.

WardsAuto: What do you expect will be the next game-changer in vehicle technology?

Bigland: Continuous improvement of the existing gasoline internal-combustion engine and advancements in transmission technology are the most obvious trend over the next five to 10 years. I know it is not as sexy as self-driving vehicles, fuel cells or cars that can run on lawn clippings, but I think it is reality.

Fields: Technology that allows people to stay connected to their digital lives will define automotive leaders in the next few years. The real point of differentiation is in infotainment technologies, and Ford intends to remain a leader in this space.

De Nysschen: Game-changer is too dramatic. There will be ongoing evolution of technology across many parts. In addition to (continued) development of gasoline engines, we can expect wider application of clean diesel technology, as well as further improvement of hybrids. Another big focus will be vehicle-weight reduction.

Krueger: The continued rollout of zero-emission technology such as (in the all-electric) Leaf will help us grow our leadership position in electric cars. We can also use that expertise to develop hybrids, fuel-cell vehicles and other new technologies.

WardsAuto: Other than the economy, what is the biggest single threat to your business? In other words, what keeps you awake at night?

Loveless: Making sure we take the best possible care of our growing owner base is critical to our long-term success. We’ve gained a significant amount of market share. We’ve turned an important corner, but that kind of growth raises expectations.

Speck: The ongoing fluidity of regulations around the world. Now that I'm in a position of global responsibility, I see how amazingly complex regulations can be from one country to another – and how they can have a significant tactical effect on long-term strategies.

Fields: Consumer confidence. It is so important that the American public grows its faith in the fundamentals of the economy and the performance of top businesses here. When people are confident about the state of the economy and the likelihood that they will have – and keep – their jobs, they are far more inclined to buy new products, including vehicles.

De Nysschen: I am very optimistic about the future prospects for Audi. We will exceed 1.3 million units (globally) in 2011. We are financially stronger than ever. We have established a solid platform on which to build our U.S. business. I sleep well at night.

Krueger: We have to stay vigilant on our plan to combat the impact that currency fluctuations have on our business, and manage accordingly.

Bigland: Jet lag. Traveling back and forth to Italy gets my internal clock all turned around, and I often find myself wide awake at 2 a.m. The economy is not a major concern for me because I can’t control it.

WardsAuto: How do you see the vehicle-segment mix changing in the U.S. in 2012? How will your business be impacted?

Loveless: Downsizing will continue to be a trend in 2012 and beyond, and any industry gains likely will be driven by small and midsize cars and CUVs. That’s good news for Kia, because we have traditionally been strong in those segments and with products like the (compact) Soul and all-new (subcompact) Rio.

Speck: I think the core segments in the luxury business will continue to be sedans and crossovers. However, you are likely to continue to see more stylish coupe-like sedans.

Fields: If there’s any shift, it would be further growth in cars – especially small cars – and utilities. Both are increasingly fuel efficient, and we know that matters to customers.

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