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The end of boring: Auto industry has reinvented itself

2013 Chevrolet Spark Electric Vehicle)


Here's what the 2013 Toronto auto show – officially the Canadian International Auto Show, but who are we kidding with that grandiose title? – tells us about today's auto world: the end of the boring, traditional, mainstream passenger car powered strictly by some sort of gas engine and dominated by the same old ossified auto makers is upon us. It's taken the upheavals of the last decade to get here, but it's happened. The auto industry has reinvented itself.

Don't agree? I'll make the case.

Or just slap on your most comfortable shoes and wander the seemingly endless halls of the Metro Toronto Convention Centre; your experiences will make my case for me. For every middle-of-the-road Chevrolet Cruze compact sedan – a perfectly good car and a perfectly uninteresting one, too – you'll see a brand-new $20,000-something Chevy Spark EV with performance to make enthusiasts cry for joy – until they run out of battery power in about 100 km or so.

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A decade ago, the idea of a pure EV priced in the mid-$20,000s – one actually entertaining to drive – was a fantasy. Chevy is not alone, either. Among the latest electric cars you'll see are Cadillac's 2014 ELR (a luxurious take on the Chevy Volt extended-range EV), the coming Honda Accord plug-in hybrid and more. Of course, they all share floor space with existing EVs such as the Mitsubishi i-MiEV, Ford's C-MAX Energi plug-in, Toyota's Prius plug-in and Nissan's Leaf, to name a few of the most prominent. EVs won't make up a large chunk of the 1.7 million vehicles Canadians are expected to buy this year, but they're here and they're real.

As are normal gasoline-electric hybrids. A decade ago, the only hybrid on the Toronto show floor was the Prius. That was it. During all of 2003, DesRosiers Automotive Consultants tells us that Toyota Canada sold exactly 173 Prius liftbacks. Compare that to 2012, when Toyota Canada sold 20 times that (3,371) number of the basic Prius car – along with thousands and thousands more hybrids and plug-in hybrids of various shapes and sizes.

Toyota dominates hybrids, though others want a bigger piece of that action. Leading the pack: Ford Motor. As I wrote some time ago, Ford Motor wants to pound the "green" out of Toyota and is going to great lengths to tell us exactly how.

Ford touts fuel economy numbers from the U.S. Environmental Protection Agency (EPA) to help make its case: the Fusion Energi (plug-in hybrid) Delivers 620-Mile Range, 21 in EV Mode. That, says Ford, is "nearly triple the electric-only range of the Toyota Prius plug-in hybrid and double the Honda Accord plug-in hybrid."

The final pitch: If you're a U.S. buyer, you might save as much as "$6,850 in fuel costs compared with an average new car over the course of five years." As Ford triumphantly points out, "J.D. Power says Ford now beats Toyota for leading fuel efficiency in every segment where both compete."

Ford is joined by all sorts of other car companies in making a "green" push/pitch that has been driven by two major forces: first, consumer demand for lower fuel costs combined with an equally strong if not stronger belief that global warming is real – therefore the auto companies should launch vehicles that do something about it; and, second, government regulators years ago warned of coming fleet-wide fuel economy rules that go into effect in 2016, and they are nothing if not stringent.

This year's Toronto show is a showcase for the technologies that drive fuel economy and lower, if not eliminate, tailpipe emissions entirely. BMW sells hybrids and downsized engines, and plans on launching a dedicated line of pure EVs soon. Mercedes-Benz sells hybrids and downsized engines which do the same, and without sacrificing performance. And Merc's smart brand will bring a dedicated EV to Canada this year, too.

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While we're talking about the Germans, collectively they have thoroughly shaken up the marketplace. Porsche sold more than 3,000 cars in Canada last year, which is unheard of, and is pushing for 4,000 and 5,000 later this decade. Yes, the latest 911 Carrera4 is here and just arriving in dealerships now, but this is also a relatively thrifty 911 – with lightweight materials, stop-start systems and other tips of the hat to lowering Porsche's footprint on the planet. You will find all the other car companies doing much the same in terms of introducing lightweight materials, aerodynamic designs and efficient powertrains.

The Germans are also leading the charge to bring in younger buyers. They are doing so by pushing down-market with vehicles like the Mercedes-Benz B-Class wagon (less than $30,000 to start) and the four-cylinder Mercedes CLA. Mercedes, BMW and Audi have made no secret of their desire to target buyers in their 20s, 30s and early 40s. This group, said Daimler CEO Dieter Zetche at the recent Detroit auto show, rivals the aging baby boomers in size and cannot be ignored.

As the industry publication Automotive News recently noted, "the three German brands say they can offer lower priced models thanks to a combination of streamlined engineering and manufacturing operations that can produce vehicles at lower cost. The weakening of the euro's value against the dollar as Europe's financial crisis has ground on also makes it easier for the German brands to sell their small, European-built models profitably" in North America.

That largely explains why the Audi, BMW, Mercedes and Porsche brands together sold nearly 90,000 vehicles in Canada last year and will sell even more in 2013. At this year's Toronto show, these Germans have the metal and they plan to move it – in some cases at the expense of mainstream car companies like Toyota, Ford, General Motors, Honda and others. How? The push down-market represented by cars like the B-Class and the CLA which, on price, compete against the Toyota Camry, Ford Fusion, Chevrolet Malibu and Honda Accord.

Then we have big pickups. Last year, Ford topped the Canadian sales charts by selling more than 100,000 F-Series pickups, the first time any model in Canada has passed the 100,000 post. The pickup wars will continue with the arrival of new ones from GM (Chevy Silverado and GMC Sierra) this year and the ongoing success of the reinvented Ram pickup from the Chrysler Group. And while Toyota does not have the 2014 Tundra on hand, it was recently shown at the Chicago auto show. It's worth asking Toyota Canada why Chicago got what Toronto didn't when pickups matter so much to buyers.

Pickups are big, working rigs, and while they represent a huge chunk of the Canadian market, what Canadian retail buyers love even more are car-based crossover and SUVs. I've already mentioned little rigs like the Trax and Encore and Honda's Urban Concept, which is based on the Honda Fit subcompact and is surely coming to showrooms later this year. But there's more to the story of change than that. By 2016, market forecasters expect the crossover/SUV market to reach 500,000 vehicles a year – or nearly a third of every new light vehicle sold in Canada. In a word, massive.

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A decade ago, what we saw in Toronto was a smattering of new crossovers – a Chevrolet Equinox Concept and the production version of the Nissan Murano stand out from 2003 – but truck-based and highly fuel-thirsty SUVs dominated. That's all changed. Essentially, the truck-based SUV died with the arrival of the latest Ford Explorer. You can still find big SUVs, but they sip fuel carefully compared to those of a decade ago. Case in point: the latest Nissan Pathfinder with its three rows of seats and the impressive fuel economy. Nissan is hardly alone, of course. SUVs, crossovers and wagons like the Prius v and Ford's C-MAX are steadily replacing boring old sedans. No one expected that in 2003.

Also, take note in Toronto of the cutthroat competition among the car companies. In 2003, Ford, GM and Chrysler were stampeding to bankruptcy – a U.S. Chapter 11 story that culminated in court and government protection for GM and Chrysler. Ford has tried not to be smug about avoiding bankruptcy, but we all know that the company only just escaped the gallows thanks to some savvy borrowing practices prior to the 2008-2009 financial collapse. But now, the Detroit Three are profitable and intent on reinventing themselves with all-new models that look nothing like the tired ideas they had in showrooms a decade ago.

Meanwhile, Hyundai and Kia, when combined, represent Canada's fourth largest auto retailing group, ahead of Toyota with its three brands – Toyota, Lexus and Scion. Five years ago, DesRosiers notes that these two were together moving barely 100,000 vehicles off dealer lots. Last year, Kia and Hyundai had combined sales of 214,083 (77,800 for Kia and 136,283 for Hyundai). These two South Korean brands from the same parent company out-sold Toyota/Lexus/Scion (192,058) in Canada. The Japanese have noticed and are fighting back with new models (the 2013 Honda Civic comes to mind), but the point is that the marketplace has expanded with many more choices from many more viable car companies.

Finally, this Toronto show contains a message about quality that is reflected in the latest reliability study from Consumer Reports. What's clear from the research is that traditional mechanical systems are improving, says CR's auto testing boss Jake Fisher, and that the overall problem rate across the industry is similar to five years ago.

But the industry would be able to boast big quality gains if only it were not so challenged by electronic problems. They're increasing with the complexity of the latest models and no one company is immune to this issue. Anyone using the Toronto show as a shopping trip will want to look closely at not so much mechanical issues, but the ease of use and reliability of all those various gizmos and gadgets that dominate today's new models.

Ten years ago, the floor of the Toronto auto show was a mix of mid-size sedans, small sedans, pickups and largely truck-based SUVs, almost none equipped with alternative power trains or advanced electronics such as voice-activated command systems, touch screen displays and crystal clear sound systems that can make your ears bleed.

And a decade ago, the Detroit companies were racing to oblivion, the Japanese were ascendant, the Koreans were a blip and the Germans were mostly about fancy luxury cars and dare we say arrogance. Today, Detroit makes money and continues to rebuild product lines with highly, highly competitive models. The Japanese today are fighting to reclaim the lost market share of the past several years, but they won't have an easy time of it, and not just because Detroit is back in the game. Indeed, the Germans have swallowed their pride and seeing rich profits are moving down-market and challenging old ideas about luxury brands. In doing so, they are chasing young buyers. And did I mention that the Korean car companies are real and aggressive competitors, where once they were merely the butt of jokes?

Oh, how things have changed since Liberal Jean Chretien was ending his run as prime minister. Today's PM, Conservative Stephen Harper, is as much a Chretien contrast as the cars of the 2013 Toronto show are to what we had in 2003.

For more Toronto AutoShow coverage, please click here.

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More


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