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2009's few winners may have company in 2010

Source : REUTERS
Last Updated: Wed, Jan 13, 2010 04:30 hrs
AUTOSHOW - 2009's few winners may have company in 2010

Tom Doll is someone you don't run into much at car shows these days: An automobile executive who loved 2009.

While the worst downturn in decades sent U.S. light vehicle sales tumbling more than 21 percent last year and drove two of the country's three domestic automakers into bankruptcy, Doll, the top executive at Subaru of America, watched his company's U.S. sales rise 15 percent and its market share jump 50 percent.

"I don't think at last year's Detroit show that many people would have predicted that any manufacturer would set a record in 2009," Doll said on Tuesday on the floor of the Detroit auto show.

"After all we were in the midst of the biggest financial meltdown in the U.S. economy in over 70 years. And our industry was smack in the middle of the storm ... (But) times were good for us."

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Subaru, which is owned by Fuji Heavy industries Ltd, wasn't alone.

Although the headlines coming out of the U.S. auto industry were downright apocalyptic for much of 2009, a handful of automakers, including Ford Motor Co and Hyundai Motor Co, also had sales progress worth celebrating in 2009 -- and would like nothing more than to have a repeat in 2010.

But can they?

Analysts say they stand a decent chance. Still, they may have more company this year as a rebound in car sales to between 11 million to 12 million units, up from 10.4 million last year, lifts results for the whole industry.

On Monday, Ford -- the only U.S. automaker to avoid bankruptcy -- swept the North American Car and Truck Awards at the Detroit auto show with its Fusion Hybrid and Transit Connect cargo hauler.

Subaru, which had its Forester named Motor Trend magazine's 2009 Sport Utility of the Year, saw its Outback named Motor Trend's 2010 Sport Utility of the Year, the first time a single automaker has won the award two years in a row.

Hyundai, which has won over dealers and consumers with cars equal in quality and reliability to more pricey Japanese vehicles and won the 2009 North American Car of the Year Award with its Genesis, is now getting high marks for styling.

"Their powerful opportunity is this new Sonata," said Earl Hesterberg, the president and chief executive Group 1, a big publicly traded U.S. dealership chain.

"That's in the fat part of the car segment. It's already recognized as having a good value proposition. Now for the first time it looks like it has styling. We'll see what the market says. But that's interesting and potentially a step forward for them."

Mike Maroone, the chief operating officer of AutoNation, the largest U.S. auto retailer, agrees, saying Hyundai will be "a force to be reckoned with" in the coming year.

But Ford, Hyundai and Subaru are not the only automakers generating buzz at this year's show, an event that takes place in the shadow of the U.S. government's $120 billion bailout of the domestic industry last year.

"At least for the near-term, excess is out," Jeff Schuster, executive director of global forecasting at J.D. Power and Associates told Reuters TV.

"If you look around this show, the message here really is an industry getting back to business."

Among the companies looking serious again is General Motors. Maroone says Chevrolet's Equinox is "the hottest product in America," giving GM, which has also scored big hits with the Chevrolet Malibu and Camaro, another reason to smile.

"Their new stuff is all clicking," Maroone said.

But after last year's crushing slide in demand, which pushed industry-wide sales to their lowest level since 1982, almost everyone here expects 2010 to be a year of rebound that could lift most automakers of the floor they hit in 2009.

"There is the potential for upside because we have a lot of pent-up demand," said Rebecca Lindland, an analyst at IHS Global Insight.

The increasing signs of stability at GM and Chrysler, which both exited bankruptcy quickly, will also be a key factor to watch in 2010.

Schuster at J.D. Powers says that Hyundai and Kia both saw customers migrate to them last year as a result of the rumors of impending bankruptcy at GM and Chrysler -- and uncertainty about what that might mean for warranties and service.

He says that as domestic industry becomes more competitive and the news around it less dire, "it will be interesting to see if they are able to draw those buyers back with their new products."



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