Detroit auto show a tale of haves, have nots

Henry Payne
The Detroit News

On a frigid Thursday before the Detroit auto show, Mitsubishi Motors hosted a media reception just up-river from Cobo Center at the Detroit Port Authority. Japan’s oldest automaker showed off two crossover concepts for the U.S. market, then packed them up and left town.

Like a child’s face pressed to a toy store window, the symbolism of Mitsubishi outsider status at the North American International Auto Show is undeniable.

While big manufacturers like General Motors, Nissan and Ford invest billions in battery-powered cars and the driverless transportation of the future, smaller manufacturers like Mitsubishi, Mazda and Fiat Chrysler are literally being left out in the cold.

Mitsubishi hasn’t had floor space in Cobo since 2006, much less had an executive sit on a panel speaking about robot cars. With U.S. sales under 100,000 last year, Mitsubishi is desperately trying to keep up with a market that has gone whole-hog for SUVs. But while it retools to make new utes, it must also keep up with exploding regulatory costs in the U.S. that it can’t absorb as easily as bigger manufacturers.

“Clearly in the U.S., emissions and safety rules are huge costs,” said Mitsubishi North America Executive Vice President Don Swearingen. “Those regulations are starting to grow and be as restrictive in the rest of the world. When we look at bringing a product into market with a smaller volume, it’s very difficult to make a strong business case.”

So Mitsubishi has sold a 34 percent ownership stake to Japanese giant Nissan. “Our partnership with Nissan makes life a lot easier,” adds Swearingen. “Being able to share a platform in the future (with Nissan) will help us better share costs.”

Other small automakers like Mazda and Fiat Chrysler can be found on Cobo’s floor this week. But they, too, are seeking partnerships to keep up with the rapidly changing environment that demands investment in new vehicles whose market viability is not yet proven.

“Chrysler did not have the funds” to invest in electric cars before its 2009 bankruptcy, says ex-GM and Chrysler product guru Bob Lutz: “Even now they can’t divert scarce capital and engineering money for these money-losing compliance vehicles.”

Chrysler CEO Sergio Marchionne has openly courted a partner.

In November, Mazda announced it would partner with Toyota, an established maker of hybrid-electric vehicles, to produce an electric car by 2019. Mazda is known for sporty small cars like the MX-5 Miata and CX-9 crossover. But Mazda CEO Masamichi Kogai said at a media roundtable that an EV is necessary to “accommodate the zero-emission vehicle regulations in North America.”

IHS Auto Analyst Stephanie Brinley says, “For a smaller automaker, a partnership or a supplier relationship to get the technology they need can be the most expedient and prudent way to reach the necessary technology. It can benefit the larger partner as well, in that the partner can spread costs out further.”

But it’s not just regulations that are widening the gap between haves and have-nots. Witness the voluptuous Vmotion concept that’s the centerpiece of Nissan’s sprawling Cobo floor display. With a configurable interior and “cabinet” doors, it is part of Nissan’s vision of a self-driving future.

Meanwhile, little Mitsubishi just needs Americans to notice its SUVs. Swearingen says the company has moved on from performance sedans like the Evo: “Everybody knows that the CUV market is continuing to grow and sedans are dropping off. Clearly, our focus in on the CUV market. We had an SUV on drawing board even before the Nissan alliance.”

Mitsubishi will show a compact SUV — based on the EX Concept shown in Detroit — in Geneva this year. Mitsubishi plans to bring it to the U.S. in early 2018 to complement the Outlander and Outlander Sport, its SUVs that account for 65 percent of sales

If successful, the automaker that’s been making cars since 1917 might have enough money to come in out of the cold.

“We reduced the number of auto shows as one cost-saving measure,” says Swearingen. “We’re hoping we’ll bring our presence back to Detroit auto show in the near future.”

Henry Payne is auto critic for The Detroit News.