VW & Ford cancel Detroit Auto Show appearance to announce alliance
The Detroit auto show was abuzz over what Ford and Volkswagen would announce on Tuesday, after the car giants called off a joint appearance during which they were widely expected to announce an alliance.
The two car giants have been in discussions for more than six months over a partnership to develop self-driving and electric technologies. But a source close to the talks told AFP that they had so far only produced a deal over commercial vehicles.
A highly-anticipated announcement at the US's premiere auto show in the Motor City was called off late on Monday, and the two sides planned a conference call with reporters instead for the following morning.
"We don't have enough details yet to go out in front of more than 500 journalists, so we decided to call it off," Ford spokesman Mark Truby told AFP.
Earlier in the day, Ford Chairman Bill Ford had told reporters that discussions were going well but that they would have "more to say later this week."
Both Ford and Volkswagen CEO Herbert Diess appeared optimistic about a potential partnership.
"Volkswagen is a really big car company worldwide ... but we are not as big in small commercial vehicles," Diess told the Detroit Free Press newspaper.
"So we decided to join forces there. And we will become very, very competitive together in this segment – which consists of small commercial vans and small and midsize pickup trucks."
Aside from the abrupt cancellation by Ford and VW, the show began as scripted, with SUVs, trucks and sports cars centre stage, with extra showmanship to pump up the excitement despite fewer carmakers and more uncertainty this year.
Automakers have all but abandoned compact cars and sedans, an ever-shrinking portion of the North American market, as evidenced by what models were on display.
Pick-ups, SUVs and high-performance vehicles dominated the new debuts. Volkswagen was among the few exceptions with a new Passat sedan.
For the first time, Ford publicly displayed a redesigned Explorer SUV, including a hybrid version, which first debuted in Detroit on Friday.
Fiat Chrysler unveiled redesigns of larger models of its popular Ram truck.
For those looking for an alternative, carmakers were emphasizing sporty cars and nostalgic pasts – largely eschewing the traditional sedan in favor of flashier options.
With a flair of showmanship that included virtual-reality goggles and a sports car levitating down from the ceiling, Ford revealed a high-powered version of the Mustang called the Shelby GT500 – boasting more than 520kW.
A practically jubilant Akio Toyoda introduced a refresh of his beloved sports car Supra, which Toyota stopped producing 17 years ago.
Toyoda trotted out Spanish racecar driver Fernando Alonso to attest to the car's racing authenticity with an everyman appeal.
"It's like a race car you can drive quite comfortably every day," Alonso said during a scripted presentation.
Aside from VW, German carmakers abandoned the Detroit show this year, amid competition from events in New York, Miami and Las Vegas where increasingly tech-centered car announcements were presented.
Hoping to revitalize the show, organizers were holding the event for the last time in January and will move to June next year to allow for outdoor activities such as test drives.
For the industry at large, the hope was that bigger and more profitable SUVs and trucks would help weather economic storms – whether from tariffs or fewer consumers buying cars due to rising prices, higher interest rates or a lagging world economy.
Analysts predicted slowing sales in 2019, following a decade of growth.
The Detroit show was also clouded by uncertainty in US trade policy.
Beijing and Washington remained locked in a trade war that could escalate as soon as next month, when the Commerce Department is expected to deliver a report on possible new auto tariffs.
Analysts predict rapid contraction in the auto industry should more tariffs take effect.
"Tariffs would be devastating to the entire industry," said Robert Carter, chief of Toyota's North American sales, adding that vehicle prices would increase and suppress sales.
"Not only would it affect the Toyota brand, it's going to affect every brand in the industry, every car in the industry."
The president of Chinese automaker GAC, Yu Jun, said the ongoing trade war had delayed the company's entry into the US market from 2019 to the first half of 2020.
"We have postponed our plans due to the recent development on trade. We're making steady progress towards it," Yu said, according to a company interpreter.