Blog: Dave LeggettLA reflections

Dave Leggett | 4 December 2006

The Los Angeles Auto Show seemed to thrive last week now that it is out of the shadow caused by its former proximity to Detroit in early January. As expected, GM made its play for the more modern American consumer who has been deserting it, long-term, for the likes of Toyota and Honda. It’s about time.

Also in LA, Volkswagen showed its new Golf-based crossover – called Tiguan. That was perhaps overshadowed by the candid admission that Volkswagen probably won’t be making a profit on US sales until 2009. More NAFTA area production would help offset the adverse impact of the weak dollar for Volkswagen. Making US market Tiguans in Mexico would perhaps be something to seriously consider.

But all players in the US market will be eyeing market forecasts for 2007 closely. Demand could contract next year on the back of a slowing US economy and housing market. For some, that could tip the scales in the direction of offering higher incentives again to maintain volume.

At least for Ford and GM the North American manufacturing footprint is getting to a level that makes more sense. There’s still the cost of the restructuring to bear, but there is movement in the right direction. And there are some good signs that there is movement in the right direction in terms of product too and understanding what meeting market needs really means.

Over at GM, Kerkorian appears to have bailed more or less completely after his strategy to lead GM down a very different path was left in tatters. I don’t suppose Mr Wagoner was sorry to see him go. But if his plans don’t work out, Kirk Kerkorian and Jerry York will probably be the first to say ‘I told you so’.


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