Technology, frugality overtakes glitzy glam of Detroit auto show
Thirty years after the Detroit Auto Dealers Association rebranded its hometown auto show an “international” must-do for the global industry, the era is over.
The North American International Auto Show, launched in 1989, next week holds its final media preview before its latest reincarnation. Come June 2020, it’ll aim to be the cornerstone of an automotive extravaganza showcasing a reinvigorated Detroit as much as an auto show reimagined around experience and advanced technology.
This month’s show is a diminished husk of its former grandeur, abandoned by European automakers, sparsely attended by executives and increasingly deemed unnecessary to media outlets now accustomed to covering the industry via the web or at focused events organized by a single automaker.
Just 30 new models are expected to be unveiled, organizers confirm, down from 69 a year ago. In just a few short years, the Detroit show has morphed from mandatory to a barely optional stop on the auto show calendar. The swift reckoning, felt most acutely in the United States and Europe, is a very public manifestation of the changes transforming the century-old industry with the speed of the internet.
"We see it as an evolution, and we want to be where consumers and the manufacturers want to be," said Doug North, vice chair of this year's Detroit auto show and president of North Brothers Ford in Westland. "There certainly were a series of events" — the global financial meltdown, bankruptcies that claimed brands and models, the techification of the industry — "that have impacted the traditional auto show."
Detroit is not alone: Ford Motor Co.'s Blue Oval and Volkswagen AG's eponymous brand skipped last year's bi-annual Paris show. The Germans who dropped Detroit after last January’s show are no sure things at Frankfurt and Geneva, even as they stick with the New York and Los Angeles shows because that’s where the money and customers are.
The German no-shows in Detroit nonetheless are in Las Vegas this week for CES, the sprawling technology showcase, confirming how rapidly electronics are transforming the humble automobile. BMW AG, Daimler AG's Mercedes-Benz and VW's Audi are using CES — not Cobo Center — to tout electric and self-driving vehicles.
Detroit's auto show "has become quite unimportant for us," Stefan Menzel, a veteran auto writer for Handelsblatt, the influential German business daily, wrote in an email. "Today it’s only a regional show without any big news for us. The German OEMs more or less don’t send executives to Detroit any more. So there is nobody left for us to accompany. The CES in Las Vegas has become much more attractive for us — there is quite a lot of news."
And fewer working journalists are likely to attend the Detroit show because fewer brands will be represented, fewer new models are scheduled to be revealed and fewer executives are expected to attend. Show organizers expect roughly 4,500 journalists to attend this year's show, down from 5,078 officially credentialed for the 2018 show.
Driving the trend away from traditional auto shows, industry insiders say, is a growing need for global automakers to burnish their tech cred with Silicon Valley types and the media that covers them. And that's one of the first steps towards building legitimacy with investors as automakers push to be considered higher-value tech companies that happen to build cars, trucks and SUVs.
Also influencing the trend are cost, the technical capability to precisely target messages to specific audiences and the higher returns on capital invested in stand-alone events. A press conference at a major auto show could cost $500,000 or more, compared to half that for something like Ford's unveiling Wednesday of its all-new Explorer SUV at Ford Field.
"It's better and more impactful to do something in a more isolated environment," said Jay Ward, director of product communications for Ford of Europe. "You're competing with a number of other OEMs at an auto show. It increasingly doesn't make a lot of sense when you can own your own space."
Budgets are tighter, despite the longest run of rising North American profits and sales since the 1960s. Sophisticated online tools enable automakers to track the penetration of their messaging with media, dealers and paying customers. And that has automakers increasingly gravitating toward the "clear air" of stand-alone events far from auto show floors.
“There is much more focus now on profit margins and costs than there used to be,” said Michelle Krebs, an industry analyst for Cox Automotive. “Automakers are sharpening the pencil and looking at how much they spend on a reveal and what their return is on that. The fact is they’re not getting a big enough return on the investment in an auto show.”
As automakers increasingly opt for stand-alone events to reveal new products or make news, many foreign automakers and their brands have abandoned NAIAS altogether. When media descend on the Motor City next week, only Volkswagen and a handful of mainstream Asian brands will represent the international players.
The hometown contingent will be comparatively light, too. Only General Motors Co.'s Cadillac brand is planning a product reveal; its Buick, Chevrolet and GMC brands have not scheduled pressers, though they will be represented on the show floor. Ford's Lincoln and Fiat Chrysler Automobiles NV's Chrysler, Dodge, Jeep, Fiat and Alfa Romeo brands have not scheduled press events, leaving only FCA's Ram and the Ford Blue Oval on the official press schedule.
Detroit show organizers are hoping automakers will reconsider the value of NAIAS when it makes the jump to June 2020 and re-emerges as an automotive festival in the spirit of the Goodwood Festival of Speed in the United Kingdom. It would be the Detroit auto show’s second rebranding since becoming an international show 30 years ago.
But there are no guarantees. This generation of the Detroit show debuted long before mobile phones, email and digital content became the everyday tools of business and commerce, before cars and trucks carried more computer code than an airliner, before automakers focused intensely on building value with a new class of investors.
"The industry is changing, and interfaces with the customer are changing," said Tony Cervone, GM's senior vice president of global communications and a senior adviser to CEO Mary Barra. The auto show is "in a rightful transition ... that will be way more consumer-focused — which is the way they started 60 or 70 years ago."