Detroit auto show highlights industry’s balancing act

Ian Thibodeau
The Detroit News

Correction: The story has been updated to say Ford will invest $11 billion in developing electric vehicles by 2022. 

The original car from the movie Bullitt is driven into the stage during the Ford reveal on Sunday at the Detroit auto show. Ford is not alone in leveraging its past to produce near-term profits to fund electrified, self-driving technology for the future.

The exhaust fumes from the unearthed ’68 fastback that inspired Ford Motor Co.’s new Mustang Bullitt muscle car were still thick in the air when the company announced its plans: the Blue Oval would invest $11 billion developing electric vehicles by 2022.

The Dearborn-based automaker is not alone in leveraging its past to produce near-term profits to fund electrified, self-driving technology for the future.

For the next several years, at least, the global auto industry faces a financial conundrum unlikely to be particularly popular with shareholders: Automakers are engineering and building vehicles in the truck-and-SUV-fueled present to finance an electrified future that so far is short on customers and profitability.

The automakers don’t have a choice. As Fiat Chrysler Automobiles NV CEO said this week at the Detroit auto show: “I don’t know the guy who is making money selling electric vehicles.”

The companies sell what they have, and that’s on display at this year’s North American International Auto Show. Automakers generally replaced lofty messages about the future there with products — or plans for products — that real people will actually buy within the next few years.

Still, the contrasts are jarring: General Motors Co. rolled out a brawny new Silverado pickup just a day after announcing it is ready to launch an autonomous fleet in 2019, minus any profit projections for the latter. The company expects the Silverado, a line of crossovers and a new GMC Sierra pickup to keep profits steady as the Detroit automaker gears up to deliver promises on new technology.

Crosstown rival Ford announced its new EV plans after debuting a performance-oriented Edge SUV, the 2019 Ranger and the limited-edition Mustang. The automaker said it would launch a 700-plus horsepower Mustang Shelby GT500 as it announced general plans to to electrify legacy nameplates to reinforce brand recognition and drive future business.

And the day after expounding on the virtues of the cutting-edge four-cylinder VC-Turbo gasoline engine in its Q Inspiration Concept, Infiniti on Tuesday said it will start phasing out gas-powered vehicles in 2021 and switch to “all electrified” models.

The companies seem to have figured out that they won’t make it to a future potentially full of battery-powered robotic cars without delivering — and continuing to deliver — new, exciting products that people will buy today.

GM, like Ford, is leveraging legacy nameplates to drive profits and maintain a consumer following the company hopes to hold onto during a decade of change. The companies decided almost simultaneously that the Chevrolet bow-tie and the Blue Oval will be key factors in the future. And they’re saying so.

“When you take a look at the EV space, the autonomous space, that’s on top of everything else we’re doing today to feed the marketplace as it exists right now,” said Paul Edwards, vice president of marketing at Chevrolet. Electric and autonomous vehicles are “more of the long game in terms of where transportation is going. We definitely want to make sure we’re well-positioned for the future.

“I would say we’re more relevant today than we’ve been in a long time.”

Several Ford officials said at the Detroit show that the company has a strong product plan that will act as a base for the new business segments. Read: Ford trucks and SUVs are going to pay the tab for products people won’t buy for a while.

“Execution today is critically important,” Joe Hinrichs, Ford president of global operations, told The Detroit News.

Others feel the same. Fiat Chrysler Automobiles NV had events for Ram and Jeep, at which the executives spoke only about the new Ram 1500 or the 2019 Jeep Cherokee. Those press events straddled a roundtable in which CEO Sergio Marchionne again swore off making any promises for futuristic vehicles.

At last week’s CES technology show in Las Vegas, Toyota showed its version of the electric future with the e-Palette battery-powered concept vehicle; Monday in Detroit, the automaker debuted a new Avalon sedan. The company’s RAV4 SUV was the fourth-best selling vehicle in the U.S. last year.

The companies are following a more consistent and focused messages. Automakers have placed bets, but leadership at GM, Ford and some other companies have a newfound confidence amid uncertainty. Most of that seems based on strong and growing product lineups, and the brands that excite consumers.

“It’s becoming more clear that they should really make sure that the futuristic technology is more window dressing on an otherwise meaty product offering,” said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. “We all know that you’re working on self-driving cars. You don’t need to tell us that anymore.”

The Detroit show again became the Big Three’s megaphone for that message this year. After lackluster vehicle unveilings here from Ford and others in recent years, the companies used the show to talk metal.

They hardly mentioned the self-driving vehicles they plan to launch. That’s what CES is for — even if the Detroit show organizers have built up a mobility facet, according to Brauer and others.

“Detroit felt like a more traditional auto show,” Brauer said. “They showed real product people are going to be driving. It was better for them. It was a very standard issue auto show. And there’s nothing wrong with that.”

Detroit News auto writer Nora Naughton contributed.