Reuters Blog

Optimism and delicious “bailout blend” coffee reigned at the Detroit auto show.

Automakers and officials at the North American International Auto Show struck an optimistic yet cautious tone as they sought to put a toxic year of slumping sales and massive government aid behind.

“This is a new day,” U.S. Transportation Secretary Ray LaHood said at the annual show. “Today is a new beginning, really.”

Following a disastrous year that saw GM and Chrysler forced into government-led bankruptcy, many executives said 2010 sales should be much better after plunging to 10.4 million units last year, 39 percent below the market’s peak in 2005. The unanswered question, however, is what the U.S. economy will do following its longest, deepest downturn since the 1930s.

It is just over a year since America’s automakers went to Washington amid the worst sales slump in decades to seek emergency government funding totaling some $120 billion. In a flash of humor at the show, that dark moment in American car history was honored by local company Great Lakes Coffee, which served its own “Bailout Blend” coffee.

With the outlook for 2010 sales still uncertain, many automakers touted upcoming electric car technology, an area that the U.S. government has backed with subsidies and low-cost loans.

However, every silver lining has its caveat. Jim McDowell, American head of BMW’s Mini unit, said if unemployment rises or the housing market weakens further that could dampen demand.

“In 2009, we discovered we have a new competitor that we have have never dealt with before and it’s savings,” he told Reuters. “Anything that throws major elements of uncertainty in front of the consumer are the kinds of things that could depress sales.”

“But ultimately sales will increase because the car fleet is getting older and older,” McDowell added.


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