The DC Auto Show: What We Learned About Detroit, Luxury Brands, and Toyota

The “Detroit versus the World” mentality played out on the convention center floor.

Feb 6, 2014 at 1:44PM

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Photo courtesy the author.

(Editor's note: This article contained factual errors. We apologize for the mistakes and have corrected this version.)

The Washington DC auto show is by no means one of the majors, but it's a popular run-up to New York. Like other auto shows, it is a microcosm of industry concerns and complexities. In some ways, it was like college. There are the guys with something to prove, the legacy kids who are carrying on the family name, the ones who don't have a clue, and the guys who were there just to have a little fun.

The ones with something to prove – Chrysler, Ford, and GM

The big three American automakers were out to show that if in the auto industry it's "Detroit Against the World," then Detroit is ready. Coming up the escalators to the second floor of the Walter E. Washington Convention Center, the first thing in sight is an array of Dodge Ram pickups and Chrysler's "Imported from Detroit" carousel. Ford (NYSE:F) and Jeep were not far behind with their tribute to Special Forces Raptor and Camp Jeep ride-along displays. They are still emerging from a bad case of public fatigue related to the government bailout a few years back, not to mention the perception of a lack of creativity and responsiveness to consumer concerns about gas prices.

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Photo courtesy the author.

"Detroit" has responded to those criticisms. Both General Motors (NYSE:GM) and Ford have revamped their truck lines, offering eco-friendly options such as the Sierra with Ecotec and Ford's F-150. Ford has pushed this option across brands from the Fiesta up to the large trucks and SUVs. Both companies are also creatively reaching out to a new demographic in returning veterans by offering special purchase programs and incentives. The move will build their customer base and generate goodwill with consumers and investors.

Both Ford and GM's stock rose steadily throughout 2013 and the companies are poised to continue the trend with the launch of new models this coming year. Now that Fiat fully owns Chrysler, that pairing should generate some interesting offerings. This could be the year the Detroit companies show the public they can still make good business decisions and great cars.

BMW, Jaguar, Mercedes keep it simple and secure

Downstairs at "luxury lane" were neatly outlined blocks of imports and luxury vehicles: Mercedes (Daimler), Audi, Jaguar, and BMW (NASDAQOTH:BAMXF), among others. There were no contests or elaborate displays. Probably the best display of swaggering was the absence of overt swagger at BMW. The Winter Olympics sponsor didn't even bring a model of its best-selling 3-series to the show. They know their cars, their customers, and the simple fact that they'll keep coming back.

The show here was the low-tempo competition between Mercedes and BMW. Motor Authority reports that Mercedes and BMW posted a 12.1% and 9.9% increase in U.S. sales this past year, meaning Mercedes outsold BMW here for the first time. Mercedes would like to keep that pace with its CLA, an entry-level class aimed at the same young professional buyer as the BMW 1-series. In BMW's conservative lineup was its new 4-series, a slick-looking sports sedan clearly meant for the city driver who likes the highway-friendly 3-series, but isn't ready to move into the bona fide sedan experience you get with a 5-series. 

Toyota tries to pitch 'American' and promote Scion

Filling the space of the clueless kid was Toyota (NYSE:TM) and its alternate attempts at pitching itself as a safe American car company and trying to convince people the Scions are cool cars. Its displays were large, bold, and sandwiched in between Ford and the rest of Detroit -- another metaphor for the state of the industry. Toyota Live! featured a game show style setting in which players could name the U.S.-based Toyota manufacturing plants and service centers in different states.

Also packed into this space was a "Fast and Furious" style display for Scion. Beyond the smoke, there was no aesthetic or mechanical improvement to the novelty car of the early 2000s. It's hard to identify Scion's customer. If you are in the market for something cute and sort of fast, you will get a Fiat or Mini. If you are on the street-racing circuit and want to go Japanese, you want a Nissan GT-R and its compact, easy to steer body and 530hp.

Toyota has been dogged by recalls, a Congressional investigation related to the "runaway Prius" problem, and attempts to make it look like a bad import even though it's been here since the '80s. Despite all this Toyota has a strong brand, a three-year global sales record, and America's best-selling car in the Camry. That should be its focus. 

Everyone else is just there for the fun

The rest of the show was about fun and America's love of fast cars. The Historic Vehicle Association brought classic cars while the National Capitol Region Mustang Club celebrated 50 years of the pony. All the key models from the 1964½ to the 2014 GT were on display. There was even a 1974 Shelby.

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Photo courtesy the author.

There was fun, nostalgia, and anticipatory talk of April 17, the release date for the 2015 Mustang GT. For Ford, this could translate into a sales increase among both Mustang enthusiasts and customers looking for a car that is just fun to drive – another reason to hold on to Ford.

Between the Detroit automakers' push to get back into the public's good graces, Toyota's earnest attempts to just keep selling cars, and this German rivalry, 2014 will be an exciting year for car lovers and investors.

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Monica Sanders has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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