The Year in Rearview

Although auto industry executives are nearly unanimous in voting 1999’s record sales as the story of the year, they are not always reading from the same speech when discussing other issues of importance.

Here are key thoughts on 1999 and 2000 from six of the top auto industry executives in the United States, as compiled by Times staff writer John O’Dell:

On Technology

The global auto industry has remained basically the same kind of business from the beginning: a mass manufacturer--nuts and bolts.

Now we’re on the verge of a transformation that will revolutionize our industry as profoundly and fundamentally as the engineering and manufacturing innovations of the last century.

--Jac Nasser, president and chief

executive, Ford Motor Co.

Exciting technologies on the horizon include continuously variable transmissions capable of handling a significant amount of power while offering improvement in fuel economy; more advanced in-car communications and navigation systems; a diverse array of alternative-fuel vehicles; and new safety measures such as improvements in crash-protection and braking systems.

These technologies, some regulatory-driven, some consumer-driven, will be introduced in the next few years as auto makers finalize their research and development, and they will change the way we perceive and use our vehicles.

--Nobuo Araki, president,

Nissan North America.

The first Honda Insights, the first gasoline-electric hybrid vehicles to be sold in the U.S., are being delivered this month.

Our use of low-emission technologies also expanded during the year. About 85% of all new Hondas now being sold feature some form of low-emission technology. And in January, we’ll start selling an Accord model that has earned a super-ultra-low-emission vehicle rating, meeting California limits that don’t even go into effect until 2004.

--Dick Colliver, executive

vice president, American

Honda Motor Co.

On Product

Light-truck sales continue to set the pace for industry growth, and it’s truer at Honda than most other companies. Five years ago, light-truck sales accounted for just 6% of Honda’s overall sales. This year, truck sales will account for about 22% of our total.

--Dick Colliver

We’ve dropped 30 car products and added four or five new truck products. We’d like to be heavier in trucks, and that will play out over the next few years.

--G. Richard Wagoner Jr.,

president and chief operating

officer, General Motors Corp.

Twenty years ago, you had just a few choices: big sedan, small sedan, station wagon, truck. Today, there are more variations on the SUV--from small to large, rugged to refined--than there are categories of four-door sedan.

And completely new concepts, such as car-truck hybrids like the Lexus RX 300 and Toyota RAV4, became huge hits by combining attributes that suit an increasing number of owners. This trend to more innovative and specialized products will continue.

The introduction [in Japan in 1998, in the U.S. early next year] of the Toyota Prius, the world’s first mass-produced gasoline-electronic hybrid vehicle, is just one example of the upcoming innovations.

--Jim Press, executive vice

president, Toyota Motor Sales USA

One of the other big trends is the number of innovative products that continue to come off truck platforms, in terms of derivatives that drive this continuing trend in what consumers want.

--James P. Holden, president,

DaimlerChrysler Corp.

On the Internet

The assumption is that buying cars is no different than buying books, CDs, toys or flowers. But an automobile is a complex product and a major investment. Purchasing one involves both rational and emotional decisions.

A new car can’t be shipped via UPS, and nobody has figured out how to take a trade-in or service a vehicle via the Internet. Ultimately, many car buyers will reach the same conclusion as some frustrated online shoppers this holiday season: Sometimes there’s just no substitute for a professional, in-person presentation of a product.

The future of auto retailing will combine the best aspects of both traditional dealerships and the online virtual retail world--a combination of high tech and “high touch” that will provide the right combination for each customer’s needs.”

--Jim Press

All signs point to an increase of electronic buying and selling, and this trend will continue to impact the industry. However, I see a balance between the traditional sales channel and the Internet.

I believe consumers will use the Internet more and more for research, but I also think most consumers will want to do some tire kicking before purchasing a vehicle. And the best way to do that is to test-drive the vehicle at a retailer’s site. New-car retailers also provide the consumer with the ability to service the car.

Therefore, it’s my prediction that existing sales and distribution channels will remain in place in the foreseeable future--perhaps with some consolidations--but with evolutionary rather than revolutionary changes.

--Nobuo Araki

Our electronic-business initiatives weren’t a top-of-the-mind issue for me a year ago. But e-business has really come on fast. It’s a lot bigger than I thought.

Nothing has the potential for higher returns in the next five years.

--G. Richard Wagoner

On the Future

In terms of what will have an effect on us in 2000, the biggest single thing, I believe, will be product.

Those of us with the hot new products and product renewals in all the right segments will be winners, regardless of whether or not industry sales settle back a little bit.

The second big and continuing issue will be cost containment. I would expect in an election year that the U.S. economy will remain strong. But I see little likelihood that inflation will come back and allow us to recover costs for regulatory or content or competitive actions.

As a result, we will have to protect our margins with cost controls. It will be a continuing industrywide challenge in 2000.

--James P. Holden

Most people agree it is unlikely the industry can maintain this year’s sales pace. But even an anticipated decrease in sales, say to about 16.5 million units, will result in one of the best years in industry history.

One issue that cropped up during the year is the price of gasoline. The price of a barrel of oil nearly doubled during the year, and consumers now are paying more for gasoline than any time since the Gulf War. We still pay a lot less for our gas than most people pay elsewhere in the world, but it bears watching.

--Dick Colliver

In the U.S., car prices are staying relatively flat, which is great in terms of consumer interest and vehicle sales [but is] a challenge for the industry.

Truck and SUV sales continue to be strong, while car sales are beginning to show signs of weakening.

On the whole, the U.S. economy is good and shows little signs of slowing.

--Nobuo Araki

Just as cars are becoming more diverse, so will their owners. The growing vitality and economic power of young adults and ethnically diverse car buyers will shape the car business of the next 10 years.

They will be the most informed and demanding consumers ever. Successful car makers will hear their voices and meet their needs.