Buying spree too good to last

By ALASTAIR SLOANE

Americans have been having a love affair with their car industry for the past couple of years, a cosy relationship not seen since the 1970s. Sales have accounted for about a fifth of American consumer spending, fuelled by jingoism and generous post-September 11 zero per cent finance deals.

Consumer spending has kept the American economy fizzing. What Detroit's big three made, Americans bought.

Utilitarian pick-ups and the growth of four-wheel-drives helped to give General Motors, Ford, and DaimlerChrysler some of its best sales since the oil shocks 30 years ago.

The boom allowed the big three to hoard cash to service long-term debt and meet health and pension scheme obligations. But it cost the carmakers a small fortune and led to them being devalued by Wall St.

The specialists have put the market capitalisation of GM at US$17 billion against US$23 billion in cash and cash equivalents. Ford is down US$1 billion to US$15 billion.

DaimlerChrysler is worth about as much as GM and Ford combined, says Wall St, but that value is more to do with the strength of Daimler-Benz than confidence in the Chrysler side of things.

Now the car-buying spree is slowing. Last month, new-car sales in the United States fell to their lowest in four years, down about 8 per cent on February last year. Sales of sports utility vehicles are down more than 20 per cent on a year ago.

The big three carmakers plan to cut production sharply this year. Analysts say Americans will buy 15 million vehicles this year, a significant drop against the 17 million last year.

The main Japanese carmakers with American assembly plants - Toyota, Honda and Nissan - will absorb an economic downturn better than the debt-laden Americans, say analysts. The same goes for the luxury Europeans, like BMW and its North Carolina plant.

Japanese and European cars are seen by Americans to be safer and more energy-efficient. Their carmakers are more innovative. That's why the Toyota Camry and Honda Accord have for some years been the best-selling mainstream cars and the Lexus, BMW and Mercedes-Benz the best luxury models.

The Stateside big three, on the other hand, have been regarded as relics, content to cash in on the good times without adapting to foreign growth and changes in technology.

Two recent concepts point to old habits and new directions. The Cadillac Sixteen, the 750kW V16 luxury saloon concept that was one of the more outrageous cars at the Detroit motor show, won't go into production. It was just another expensive styling exercise.

But the Chrysler Airflite, unveiled at Geneva, is almost certain to be built. It provides a strong hint of the new styling direction under development at DaimlerChrysler. The company dubs it "functional art".

"Think of the five-door hatchback as a four-seat Chrysler Crossfire," said design director Trevor Creed.

The comparison is obvious, thanks to the sloping roof line carrying the Crossfire's trademark centre crease.

Each leather seat appears to float individually off the unusual wood floor with aluminium accent strips. The look recalls the classic era of wooden boats, added Creed.

The Airflite received a strong reception at Geneva. Chrysler president Wolfgang Bernhard said he was serious about putting the car into production "if we get the right feedback".

Chrysler designers drew on influences as diverse as contemporary furniture design, classic marine architecture, and the Chrysler building, an Art Deco icon of the New York City skyline.

The result, says Creed, is a sedan-coupe hybrid that offers five doors and full-size seating for four. It is 4838mm long, 1870mm wide and 1488mm high. Its wheelbase is 2946mm and it rides on 21-inch tyres at the rear and 20-inch in the front.

The Airflite is based on a shortened version of the LX platform, the foundation for a new generation of Chrysler rear-drive passenger cars. The concept used a 3.5-litre V6 engine.

Another concept almost certain to go into production is the Audi Nuvolari coupe, which sits on the space-frame A8 platform.

The 450kW/750Nm 5-litre V10 two-door points to how Audi's A8 coupe will look when it goes into production in 2006.

It was penned by Audi's design boss Walter de Silva and symbolises the company's aim to adopt a more sporting role among the Volkswagen Group's seven brands.

It will compete against the new 6-Series coupe from BMW and the CLE from Mercedes-Benz. Other, more luxurious models, will rival the Benz CL and Bentley Continental GT.

The scuttlebutt around Geneva was that the coupe's distinct styling had already been signed off. The only changes to the production version would be bodywork details.

The coupe's upright grille is similar to that of the Pike's Peak concept shown at Detroit. This feature is expected on all new Audis, starting with the next-generation A6.

The Nuvolari coupe is 4800mm long and 1400mm high, slightly shorter and lower than A8 sedan. The production model is expected to weigh in at under 1600kg, thanks to the aluminium spaceframe and bodyshell.

The design study has been named after Italian racing ace Tazio Nuvolari, the last driver to win a Grand Prix in an Auto Union car in Belgrade on September 3, 1939.

Nuvolari was born in Mantua, Italy, in 1892 and died on August 11, 1953. His trademarks were his daring, spectacular driving style and the yellow pullover that he always wore in the car.