For Carmakers, a Big, Green Showcase in Los Angeles
General Motors CEO Fritz Henderson was supposed to give the keynote address at the Los Angeles Auto Show on Dec. 2. But when Henderson resigned in a surprise announcement the day before, General Motors' chief marketer, Robert Lutz, stepped in. Lutz came with his characteristic good humor and one big request—don't ask about Henderson. "I know all of you want the true inside story," he told the crowd of more than 1,000 reporters and industry insiders. "I'm not going to give it to you." The impromptu change of speakers was a sign that the auto business remains wobbly in the wake of one of the worst recessions in decades. It was also a symbol of the industry's newfound ability to react quickly to events. The Los Angeles show, which opens to the public on Dec. 4 and runs through Dec. 13, is a showcase for dozens of new small cars and environmentally friendly technologies, projects that were on the back burner just a few years ago when gas prices were lower, consumers were flush, and Detroit was focused on selling big SUVs and trucks. David McCurdy, the former Oklahoma congressman who runs the Alliance of Automobile Manufacturers trade group, noted that the industry now has more than 200 models that get better than 30 miles to the gallon, a 47% increase over last year. "No U.S. industry is doing more than the auto sector to reduce carbon dioxide emissions," he said. Lutz was even more sweeping in his take on it all. "The auto industry can no longer rely on oil," he said. "This will be every bit as momentous as the transition from horse power." Carmakers are getting a big shove in the green direction from Washington. Legislation passed in May requires them to reach 35 mpg, on average, for cars and light trucks sold by 2016. Mike Omotoso, senior manager for global power train forecasting at industry researcher J.D. Power & Associates, thinks that target is possible in part because of a big leap in sales of electric cars and hybrid gas/electric vehicles. He expects these will make up nearly 10% of the market over the next five years, up from 2.8% today. A new generation of clean-burning diesel vehicles could similarly rise to 8% from 2.5%. It's hardly a sure thing, however. Omotoso says "a lot is dictated by gas prices," which he expects to climb from the current $2.60 a gallon. It will also depend on consumers' willingness to pay more for green rides. "Even the cheaper solutions," Omotoso notes, "still cost more money." Lighter VehiclesThat's certainly the case with GM's new Volt electric car, which the company is showing off at the Los Angeles show. It runs on electric batteries for the first 40 miles, after which a gasoline-powered generator can keep it running for an additional 300 miles. The Volt carries a significant price tag—expected to be around $40,000—and its success will ultimately depend on a network of charging stations installed everywhere from public garages to parking meters. The first Volts will be available late next year. Lutz predicted GM would sell as many 10,000 in its first full year, 2011. "We know the demand is there. We expect it to exceed supply," he said. GM wasn't the only U.S. carmaker showing some life. Ford (F) unveiled its Fiesta compact, which will hit showrooms next summer. The company has already sold 500,000 of the sporty, 40 mpg fuel-sippers in Europe and Asia. Mark Fields, Ford's president for the Americas, says the company has reservations from 80,000 U.S. customers for the car, which will come in such colors as "red candy" and "lime squeeze." In sharp contrast to its Detroit brethren, however, Chrysler didn't have any press conferences scheduled or cars to debut. Volkswagen, a company that has recently seen gains in sales and market share in part because of its TDI clean diesel engines, used the show as a chance to unveil its Up! Light concept car, a two-door family sedan it claims will get as much as 70 mpg from its combination turbo diesel and electric motor propulsion. The Up! Light weighs less than 1,500 pounds, part of a trend from carmakers to make lightweight vehicles. Spicy SpyderNot every carmaker was promoting alternative-fuel vehicles. Toyota (TM), which dominates the hybrid car market with its Prius, did show a plug-in hybrid Prius concept but also unveiled its new Sienna minivan. The minivan category has been declining in favor of crossover SUVs, but Toyota still sees opportunity. The 260-horsepower, eight-passenger Sienna has surprising features such as a second row of lounge like seats with extendable footrests. "I never thought I would use the words 'sexy' and 'minivan' in the same line, but I love this vehicle," said Toyota's U.S. general manager, Bob Carter. Porsche, being, well, Porsche, used the show to unveil its Boxster Spyder, a $61,000 ragtop that will be the lightest Porsche on the market. The company stripped away anything that might weigh the car down, including cup holders and interior door handles. "We call it our stimulus plan," said Porsche's North America head, Detlev von Platen. "It'll add spice to your daily commute." Here, see a slideshow of highlights from the 2009 Los Angeles Auto Show.