The top automotive story of 2011? The return of reinvented car companies from Detroit.
Ford Motor Co., General Motors Co. and Chrysler Group LLC are serious and legitimate contenders in ways we haven't seen for decades. How long will they continue to attract the hearts and wallets of mass-market car buyers remains to be seen, but at least for the present Detroit is back in the game.
All three are, in fact, making money and building some of the best cars and trucks ever. This is a global story and it's evolving by the day and market, but before going around the world, let's look at what's happening in Canada.
Chrysler Canada's sales are up 13.4 per cent on the year. This year Chrysler had added a point and half of market share (now at 14.6 per cent). That's stunning and for the first time in decades, Chrysler's share in not far behind GM Canada's at 15.3 per cent.
Meanwhile, Ford Canada is No. 1 in Canada overall at 17.4 per cent of market share. Ford sales are up 3.2 per cent in an overall market that has increased on the year by just 1.8 per cent. Ford is beating the market. GM? In Canada sales are down 0.9 per cent and that's worrisome, but GM overall is very, very profitable.
Ah, profits. We'll get to that in a moment. But before we do, it's fair to ask what models from Detroit are selling. The answer is trucks, but Detroit has a handful of hot cars, too.
The Ford Focus, Ford Fusion and Chevrolet Cruze all rank among the top 10 best-selling cars in Canada. Not bad. But on the light truck side the story is almost all about Detroit and it's a great story.
Indeed, eight of the top 10 best-selling light trucks are from Detroit automakers: Ford F-Series, GMC Sierra, Chevrolet Silverado, Ram pickup, Dodge Grand Caravan, Ford Escape, Dodge Journey and Chevrolet Equinox. Light trucks account for about 56 per cent of the new passenger vehicle market in Canada, so dominance here matters.
Okay, profits. Chrysler expects to earn a net income of $600 million for all of 2011, up from previous estimates of $200 million to $500 million (all figures in U.S. dollars). Chrysler has paid off all its government loans and is in the early stages of becoming completely integrated with Fiat SpA of Italy into a global automaker. The story continues to unfold, but the point is, taxpayers are no longer on the hook for any part of a Chrysler bailout.
At General Motors, which like Chrysler went through bankruptcy protection in 2009, remains 26 per cent owned by the U.S. federal government, with another 12 per cent owned by Ontario and our own federal government. That said, GM has earned $7.1 billion through the first nine months of 2011.
Oddly, being profitable has not helped GM's stock. According to regulatory filings, GM has lost about one-quarter of its value since the company's initial public offering in 2010. GM is viable and profitable and its leadership is anxious to see the share price rise so that governments can sell their stakes and rid GM of the label "Government Motors."
Ford, of course, has not taken any government bailout money and earned $1.65 billion in the most recent quarter. Ford is also reinstating its dividend for the first time since 2006 and keeps growing, earning piles of cash and paying off debt at an astonishing rate. What a success story this is.
So to the future. This fall Chrysler began assembling a new small car at a plant outside of Chicago. The Dodge Dart, which will be unveiled in January at the Detroit auto show, will compete with the Ford Focus, Honda's Civic and the Chevy Cruze in the heart of the small car market.
If this car is successful, Chrysler looks like a good bet to survive and thrive. Moreover, by launching the Dart, Fiat will get an additional five per cent stake Chrysler, boosting its holdings to 58.5 per cent. The company's only other holder is a union retiree health-care trust that received shares during the bankruptcy restructuring.
No one model speaks to the future for General Motors, but a brand might. That brand is Buick. There are some promising signs.
The Verano compact car is receiving plaudits for its ride quality and styling and the Regal is emerging as a legitimate player at the entry point in the premium segment. The Enclave crossover, meantime, is on a record pace for sales, even though it debuted way back in 2007 and has changed little since its introduction.
In any case, Buick's sales in North America on up 18 per cent on the year. The future of Buick will be signaled by the Encore crossover, set to have its debut in January at the Detroit show.
As for Ford, the Escape crossover will be all-new in 2012 and that's a massively important development for Ford. It will be telling as far as Ford's future is concerned.
Almost as import is the updated Taurus, which also gets restyled and the Fusion is expected to be redesigned, too. Also look for a Focus electric car, and the Focus ST is likely. A C-Max hybrid minivan is coming, too.
The next step in the Ford story is to be found in Lincoln, its moribund premium brand. Lincoln has been talking about grand plans for the future, but for this year we can only say that the big Navigator is due to be restyled this year, and there is talk of a new Lincoln small crossover. Also, the MKZ and MKS are due to be reinvented in 2012.
Here at the dawn of 2012, then, Detroit's car companies are viable, profitable, and preparing to launch a truckload of new models. That's the top automotive story of 2011, without a doubt.
