Weekly Brief: Detroit Show on Wane But Boasts Ford and VW Alliance

Commentary by Andrew Tolve

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21st January 2019

The end is rarely pretty – The North American International Auto Show in Detroit was once a global spectacle.

Auto enthusiasts flocked to the event from around the world as nearly a thousand debuts and concept vehicles rolled into the exhibition hall, under the bright lights of Motown. There was buzz. There was hype. There was opportunity for whatever vehicle best captured the crowd’s imagination and excitement and the crowds: they used to approach 1 million people per week.

Last week was a shadow of those days. Only 30 new cars launched and Audi, Volvo, Porsche, Jaguar, BMW, Mercedes and Land Rover opted to skip the show entirely. Nissan’s debut of its QX Inspiration concept car was a perfect microcosm of the event. The vehicle wouldn’t start and some Nissan reps had to push it up onto the stage like a stalled rig in the breakdown lane.

What’s going on here? Blame it on Vegas. As more carmakers seek to brand themselves as mobility companies, the Consumer Electronics Show in Las Vegas appears a more exciting and on-brand event. If you debut a car alongside other cars, you’re a car. If you debut it alongside smartphones and smart refrigerators, you’re a mobile technology. Plus, the audience members in Las Vegas are less likely to be car nuts and thus more capable of being influenced and excited. Much to the Detroit show’s chagrin, CES happens to be held the previous week on the calendar. No wonder the big three German carmakers of Mercedes, BMW and Audi all went to Vegas this year and skipped out on Detroit altogether.

That explains why Detroit organizers say they plan to move the event to the summer in 2020. They hope warmer weather and a lot more calendar distance from CES will help return the event to its former glory. Increasingly carmakers are wondering if shows are worth it in the first place when they can host events at their own sites or online and drum up lots of media attention. Tesla is a master in this respect. Nonetheless, the summer date may help things out next year. For now, all we know is that the 2019 NAIAS was pretty much a dud.

It did manage to produce one piece of significant news, however. After more than a year of posturing, Ford and Volkswagen announced during the show that they’ve finally formalized a partnership. It’s not a merger, rather a joint commitment to develop and build medium-sized pick-ups and vans together. In particular, the two plan to jointly develop the next Ford Ranger, which is due out in 2022.

If you’re asking yourself why Ford, the king of trucks, would want to partner with a European company to produce its next big truck, remind yourself of the global forces at play here. In the face of stiff competition from upstart tech companies, traditional automakers are attempting to transition into the new world of ride-sharing, car-sharing, and autonomous vehicles while maintaining market share in their bread and butter vehicle segments. It’s not an easy balance. Many of them are partnering up with each other to share the load.

Honda has invested in General Motors’ self-driving unit, GM Cruise. Fiat Chrysler Automobiles has become bedfellows with Waymo, Toyota has banded together with SoftBank and BMW and Mercedes have partnered on alternative mobility solutions. Just last week in Detroit while petrol heads clamored to see the 700+ hp Shelby Ford Mustang GT500, Toyota arguably had the biggest hit of the show with its Supra sports car, a powerful ride that just so happens to feature BMW engineering under the hood.

Partnerships are the way of the future and Ford and VW can be seen as simply falling in line. Ford CEO Jim Hackett has preached the idea of “fitness” through restructuring, partnerships and newfound efficiencies ever since he came on board. It makes sense, then, that Ford wants to offload some of the expense of producing its next truck so it can shift focus to EVs and AVs. Not surprisingly, the partnership includes a memorandum of understanding that Ford and VW will work together to pursue EVs and AVs further down the line. VW already has an Autonomous Intelligent Driving unit that’s 150 researchers strong and Ford owns a large share of Argo AI, so some smart synergies could come of it. Or maybe it’s a bust. We’ll soon find out.