DETROIT – The '06 model year will be fairly typical from a product standpoint. Some 40-odd totally new models launch. Many are good. Some are not so good.
But in 2006, the answer to whether the industry's new products are successful depends largely on two looming market forces: incentives and fuel prices. Both are wild cards with potential to drastically reshape the industry's already shaky relationship with consumers.
At this story's writing in late September, regular-grade unleaded gasoline and diesel was about $2.80 per gallon.
Many markets, enduring a heavy price run-up following the destructive influence of two large hurricanes, had per-gallon prices lingering in excess of $3.
National print and broadcast stories abounded of auto buyers indicating they would shift away from the thirsty pickups and SUVs that have shaped the industry for the last 15 years.
The potential backbreaker of $3 gasoline combines with a market already trending away from “traditional” body-on-frame SUVs, though pickups, for now, seem immune.
A Ward's analysis of 2005 sales through August showed the entire SUV segment projecting to a 15.4% market share, down more than two points from 2002's peak of 17.7% and continuing a disquieting slide from last year's 16.5%.
Even worse for domestic auto makers, many analysts also believe sales of SUVs and large pickups – the longtime profit crutches ofCorp., Motor Co. and DaimlerChrysler AG's Group – were held artificially robust by incentives that culminated this summer with the “employee pricing for everyone.”
The incentives did help to clear bulging inventories and generated strong sales figures that included a 7-point market-share jump for GM. In July,sold 126,905 F-Series pickups, the best single month for any nameplate in modern history.
By the end of this year, it's all likely to add up to the epitomy of profitless prosperity for Detroit. Through the first half of 2005, GM lost a withering $1,227 on every vehicle it sold. Ford lost $139, and theGroup made $186 per vehicle.
These figures compared with per-vehicle profits of $1,826 forMotor Co. Ltd., $1,448 for Motor Corp. and $1,203 for Motor Co. Ltd., says Harbour Consulting.
Now, in the face of high fuel prices and their own vows to break the incentive cycle, auto makers are launching their latest and greatest in a rocky market that most analysts believe may fall hundreds of thousands of units short of this year's total.
The following is a look at important new models and battleground segments for '06:
The '06 model year is crucial for Ford, beset with overcapacity, flagging popularity of once-dominant SUVs and a flailing operations and product-development overhaul.
First, Ford sallies forth with the Fusion, its first serious competition for the midsizeAccord and Camry in more than a decade.
Fusion is a fine car, thanks largely to its basis on the Mazda6 architecture. The styling for Fusion – and its Mercury Milan and Lincoln Zephyr variants – is crisp and not fussily detailed. Ford designers are trying to give all three various brand-identifying grillework and also infuse “excitement.”
Unfortunately, the engine lineup is not its strongest suit. The base mill is a 2.3L DOHC I-4, with the upgrade Ford's aging 221-hp Duratec 3L DOHC V-6 backed by a new 6-speed transaxle.
The Fusion's lack of innovation is offset by what appear to be high-quality, well-constructed interiors. (See related story: Fusion Big Step Up for Ford)
Also on the watch list is Ford's heavily revised Explorer. There are sheet metal tweaks and an all-new 6-speed automatic backing the Mustang-derived 3-valve 4.9L SOHC V-8 that, at 292 hp, is 53 hp stouter than last year's 2-valve-per-cylinder unit.
The Explorer also undergoes some frame and suspension fettling in an attempt to make it ride more like a car and stave off share-grabbing cross/utility vehicles.
The '06 model year at GM's largest division is an ode to the General's sometimes poor market timing.
Chevy Impala LTZ
Chevrolet is set to unleash a bevy of high-powered new SS models in '06, and none will be advertised as fuel-sipping. Leading the list is the TrailBlazer SS and its 395-hp 6L OHV V-8, as well as an SS version of the restyled Impala stuffed with 5.3L worth of 303-hp small-block V-8.
The Impala is Chevy's bestseller, and the new, rounder sheet metal makes for a car that now appears more current. Along with the V-8 is a new 3.9L OHV V-6 featuring GM's first use of variable valve timing for a pushrod engine.
The system helps the 3.9L generate an impressive 242 hp and also is used for the Impala's base 3.5L OHV V-6.
Allegations of poor timing also have plagued the HHR, whose retro styling might have made more of an impact five years ago. The blocky shape is mated to the front-drive Delta platform, while the Ecotec 2.2L and 2.4L DOHC I-4s do yeoman duty.
Despite the HHR's inescapable similarities to Chrysler's PT Cruiser (both were penned by Brian Nesbitt), GM's latest line is the HHR is hot and will sell 100,000 units in its first full year.
Chevy Corvette Z06
Chevy also is massaging the maximum feel-good from the new ultra high-performance Z06 variant of the Corvette.
From top to bottom, the Z06 is an engineering masterpiece, with a hydroformed aluminum spaceframe, major underpinnings and structural pieces cast from magnesium and a thundering new 7L variant of the classic small-block OHV V-8, good for 505 hp.
The performance is enough to whup a Ferrari, but the price, $65,800, undercuts even Dodge's Viper SRT-10, much less all those vaunted Euro-snob supercars. “Instant classic” is the definition most 'Vette enthusiasts will use.
The big question mark for GM will be the later-in-2006 intro of the '07 Chevrolet Tahoe and its GMC Yukon and Cadillac Escalade brand variants.
Through August, U.S. sales of fullsize SUVs were down by nearly 150,000 units from last year.
One easily can imagine the figurative beads of sweat on the foreheads of GM execs as they not only launch into a market with gasoline prices hitting record peaks, but do so swearing off the deep, deep incentives that were needed to keep the outgoing models moving even at a losing pace.
GM recently showed the new SUVs to the media, taking great pains to emphasize these mammoths' V-8s feature Displacement-on-Demand cylinder-deactivation technology to save fuel.
But even the normally upbeat GM brass wouldn't say much more than they hope to hold ground with the big utes based on the all-new GMT900 pickup-truck architecture.
Pontiac doesn't have to worry about fullsize SUVs in '06, but it does have to worry about sating demand for the scrumptious Solstice 2-seat roadster.
Pontiac continues to expand the lineup of its relatively new G6 sedan. This year brings the intro of coupe and convertible variants of the otherwise ho-hum G6.
But there isn't much else in the way of excitement from the “Excitement Division” – unless you count the excited steering wheel of the Grand Prix GXP as it telegraphs tortured front tires attempting to direct 303 hp from the 5.3L OHV V-8.
Also unfortunately timed, from Cadillac, are high-powered V variants of the XLR roadster and STS sport sedan.
The XLR-V and STS-V go like stink under the ministrations of a 4.4L supercharged rendition of the Northstar DOHC V-8, but the standard XLR and STS haven't burned up the sales charts. So 443-hp and 469-hp variants may be the answer to a question nobody paying $3-plus for high-octane gas is asking.
The Chrysler Group tasks its own cylinder-deactivation setup, Multi-Displacement System, with maintaining demand for its wide variety of models that sell well in no small part due to the availability of the Hemi 5.7L and 6.1L OHV V-8s.
For '06, Dodge's new Ram features the MDS-equipped 5.7L Hemi and a refinement of the signature Ram-in-your-face styling, as well as an all-new frame and various underpinnings.
It, and the gigantic Mega Cab variant, may be just the thing to swipe some fullsize pickup share from GM and Ford.
Most of the news at Chrysler for '06 is commanded by the Jeep Commander, the 3-row, 7-seat retro-boxy derivation of the Grand Cherokee platform. Jeep thinks it is just the thing to appeal to 100,000 buyers longing for the now-dead square Cherokee, but critics are not convinced.
Meanwhile, the Dodge Charger is all-new and already is proving wrong those who said nobody wants a 4-door car wearing the hallowed Charger nameplate.
PT Cruiser's interior gets a sweet upgrade for '06, prompted, perhaps, by the presence of the new Chevy HHR.
The Asian auto makers, meanwhile, are right on top of the fuel-price jitters.
Toyota, Honda andall are ready to pull the trigger on eco-thrifty subcompacts that once were a weak proposition in the U.S. but now appear to be well-timed product decisions, despite a sales trend that has yet to reflect any potential high fuel-price effect.
Toyota brings an Americanized version of the perky Yaris, which has sold well in Europe since its 1999 launch.
The first '07 models to come to the U.S. in the first quarter of 2006, replacing the unlamented el-cheapo Echo, will be 3-door models propelled by a 106-hp, variable valve-timed 1.5L DOHC I-4.
Suspension is McPherson struts in front and a torsion-beam rear, a setup that served mass-car maker Volkswagen AG for decades before its move upmarket.
Toyota says the Yaris, because of its non-pretension, will not pirate the trendy young buyers scurrying to its Scion division.
Honda glides into the segment with a U.S.-spec variant of the Fit, a 4-door hatch that is well downmarket from the Civic, which itself is all-new this year. (See related story: A Return to Form)
The Fit's 1.3L DOHC I-4 musters a mere 75 hp and is mated to a continuously variable transmission (CVT) with seven “virtual” ratios that can be self-shifted. The Fit also offers ingenious storage spaces and passenger-cargo configurations.
Nissan will launch a version of its Tiida subcompact, a newer model that has been the rage in the mini-car infatuated home market.
The small hatchback and sedan will be called the Versa in the U.S. and Canada and is expected to have a base price of $12,000. It also will be available with a CVT drive.
Honda Civic Si
These subcompacts will battle for compact-car buyers with an all-new Honda Civic lineup. One might expect high gas prices and an all-new Civic to amount to increased sales, but Honda refuses to forecast an increase over the 300,000-odd units Civic will sell this year.
The burgeoning Korean brands are not about to cede the compact segment, and for '06,Motor Co. Ltd. launches an all-new Accent that, as a single-trim proposition for about $12,000 (A/C optional), will challenge the Japanese subcompacts for low price.
And Kia Motors America's new Rio 4- and 5-door lineup employs a new 1.6L variable-valve-timing 4-cyl. that generates 110 hp.
Hyundai also comes out with a new Sonata midsize sedan, with standard electronic stability control. Another worthwhile upgrade for this value-oriented Camry fighter is an optional new 3.3L V-6.
The Toyota brand's other major entry for '06 is the all-new RAV4 CUV. The RAV will for the first time offer the option of 6-cyl. power and 3-row seating.
Segment innovators Toyota and Honda (CR-V) have until now resisted the move to V-6 power for their mini-utes. And like GM's launch of a bevy of high-powered SS models, the market's reception may be cool, as one of the RAV's past attractions has been its comparative fuel-thriftiness.
Toyota's got big things in mind for its Lexus division, banking on the all-new '06 version of its IS entry sport sedan. The IS 250/350 models are propelled by a couple of the most-sophisticated V-6s around.
Both feature direct-injection gasoline (DIG) technology, and the larger 3.5L unit of the IS 350 couples DIG and a conventional port fuel-injection system to generate meaty power – a class-leading 306 horses – and surprising efficiency, a happy effect we've noted with other new DIG engines.
Volkswagen AG and its Audi AG unit have invested heavily in DIG technology, and some of '06's tastiest models come to market with VW/Audi's sparkling 2L turbocharged DOHC I-4 that makes excellent use of the driveability, power and economy of the company's FSI (Fuel Straight Injection) DIG system.
The 2L FSI powerplant is the base engine for the completely redesigned '06 Passat, which tries to stake out the upper end of the midsize sedan market with its high standard of interior accommodation. The upgrade Passat motor is a revised 3.6L variant of the still-intriguing VR-6 “narrow angle” V-6 architecture.
Audi, meanwhile, uses the same 2L FSI to good effect with the sharp-handling and economical A3, which, although others have failed, once again will test the public's stomach for the premium hatchback.
AG's seminal 3-Series is all-new, with a spectacular new driveline based on meaningful upgrades to its 3L inline 6-cyl. engine and outstanding transmissions.
The curvy sheet metal, trial-ballooning a few Asian styling overtones that makeloyalists queasy, may be the only facet to keep the car from instant glory.
New engines also are on tap for several '06 Mercedes-Benz models. The C-Class gets a couple of new V-6s, and the somewhat bland E-Class enjoys a surge from the superb 3.5L DOHC V-6.
The SLK roadster lineup expands to two models with the addition of the SLK 280 and its 3L variant of the 3.5L V-6, presumably to present a more palatable price point.
Mercedes' biggest risk for '06 comes in the form of the R-Class wagon. The 3-row sedan-wagon-CUV R-Class rides on the M-Class unibody platform and its big footprint is matched by a big $48,775 starting price for the R350 with 6-cyl. power.
Mercedes also adds to its now almost obsessively expanded model range with new 5L normally aspirated and 5.5L supercharged V-8s for its alluring CLS 4-door coupe-sedan.
Wise to the fact those buying marginally useful $95,000 sedans probably don't mind $3 gasoline, the CLS 55AMG's 5.5L forced-induction mill deals out a rather insane 469 hp.
Hey, doesn't Cadillac already have dibs on that number?