L.A. Auto Show a spectacle for the media, not the paying public

By Ken Bensinger

Nov. 16, 2007 12 AM PT

Times Staff Writer

Starting today and for the following nine days, more than a million people are expected to plunk down $10 each to attend the Los Angeles Auto Show. Little do they know, the show is already over.

The spectacle that is the automobile exposition is a breathtaking demonstration of the organizational skill, planning, logistics, design, vision, ambition and piles of money possessed by carmakers, which in a matter of days have once again erected a 760,000-square-foot temple in which to worship the four-wheeled vehicle.

All this, though, is not for you, dear reader. It’s for us, the media.

Before the show opens to the public, thousands of reporters, photographers and bloggers are wined, dined and entertained for two days by the kingpins of Detroit, Tokyo and Wolfsburg, Germany, all in the pursuit of good press.

Among the heavy hitters in town this week: Ford Motor Co. Chief Executive Alan Mulally; Nissan Motor Co. and Renault CEO Carlos Ghosn; and General Motors Corp. Vice Chairman Bob Lutz. They met and supped with journalists Tuesday, made speeches and shook hands Wednesday, and were gone, along with the reporters, by Thursday. Party over.

And the people who actually buy these cars? Little more than an afterthought.

Asked at one of those private dinners to compare auto shows with the big trade events in commercial aviation, the industry he used to work in, Mulally smiled. “The biggest difference is that at air shows there are quite a few customers,” he said.

Car shows are “all about making a venue to create publicity,” said Andy Fuzesi, general manager and co-owner of the L.A. show.

Last year, Fuzesi bowed to pressure from carmakers and moved the show five weeks earlier to attract more press and end overlap with the show in Detroit. It cost him a 17% drop in paid attendance. “It’s about addressing the needs of the industry.”

And while none of this prevents the public from having a good time strolling the Convention Center to gawk at the sleek $1.46-million Lamborghini Reventon and the cute $11,590 Smart Car making its U.S. debut here, it casts a light on the clubbish, expensive and little-understood way some of the world’s biggest companies sell their wares.

Car shows are almost as old as cars themselves. The New York Automobile Show, founded in 1900, claims to be the nation’s oldest, and like nearly all of its peers, it was founded by a consortium of local car dealers to push sales in the slow winter months. Dealers brought in cars off their lots and had salesmen on the floor, ready to haggle.

After World War II, the big American carmakers began using the shows to roll out new products. Over time, their participation became increasingly elaborate, and at the four biggest shows in the U.S. -- Detroit, Chicago, New York and Los Angeles -- dealers’ role was diminished.

Most shows are still owned by the dealer groups that founded them, but only smaller shows, such as those in Philadelphia or Tulsa, Okla., still have dealers working the floor. The big four shows are today entirely affairs of the automakers, and the focus is on image-building.

Not that the dealers are suffering. The New York show, run by the not-for-profit Greater New York Automobile Dealers Assn., brought in $11.7 million in 2005, or about 90% of the group’s revenue, according to public tax records. Even a regional dealer-oriented show, like the one in Houston, brought in $1.5 million last year.

The groups typically use the proceeds to pay hefty salaries to officers -- nearly $500,000 in 2005 in the case of the New York association -- or to build posh headquarters, as the Chicago Automobile Trade Assn. did several years ago. (The L.A. show is privately run, so its financial information is not public.)

This income comes from ticket and program sales, commercial sponsors and from renting floor space to automakers and car accessory firms. The largest exhibitor at this year’s L.A. show, GM, rented 109,000 square feet at $7.25 per square foot, or $790,250, according to Fuzesi. At Chicago’s February show, GM will rent a whopping 190,000 square feet for just more than $1.5 million, organizers say.

As big as those numbers seem, they’re a drop in the bucket. The biggest automakers can spend upward of $10 million on their “stand” -- the lighting, stages, speakers, video screens and rotating car turntables that make up a display -- says Robert Vallee, CEO of George P. Johnson Co., known as GPJ, one of the two or three largest event-display houses in the car-show business. Add to that carpeting, electricity, transport, on-site product specialists, accommodations, advertising and public relations, Vallee says, and the tab for a single automaker can reach $50 million.

Vallee produced the stands for GM, Toyota Motor Corp., Honda Motor Co., Chrysler and Nissan at this year’s L.A. show. To create them, GPJ employees begin working with carmakers more than a year in advance, creating a “story” that they hope to convey not directly to consumers but to the media.

“How much product does Ferrari sell in Michigan because of the Detroit show? Not a lot,” Vallee said. “From a sales perspective, Detroit is not important for them. But Ferrari has a very important story to tell in Detroit from the press point of view.”

Detroit is widely considered the most important show in the world when it comes to telling an automaker’s story because of the huge numbers of journalists it attracts. Despite being held in Michigan’s bitter January cold, this year’s show attracted more than 6,000 credentialed members of the media, including representatives of nearly all of the major print and TV outlets most coveted by carmakers. That is by far the largest of any car event, including the Geneva, Tokyo and Frankfurt, Germany, shows.

Detroit’s media presence is so large, experts say, that it outweighs the city’s oft-criticized drawbacks, such as a shortage of hotel rooms and an undersized, outdated convention center.

“If you’re going to launch a game-changing vehicle, you’re thinking Detroit,” says Jay Cooney, who heads auto show-related public relations for GM. This year, the company revealed its Chevy Volt plug-in hybrid concept car, widely considered its most important announcement of 2007, in Detroit.

Los Angeles, by comparison, drew 3,000 accredited media members last year, the most recent number available, and so GM used the forum to this year introduce the redesigned Chevy Aveo and the Malibu Hybrid -- both very important to GM, but not on the scale of the Volt.

“Yes, there’s competition among the shows,” says Paul Brian, director of communications at the Chicago Auto Show. Brian says he has in recent years substantially expanded the show’s media center and added computers to lure more journalists. The show also has a sponsorship deal with tire manufacturer Bridgestone Corp. to fly in 100 to 125 journalists, all expenses paid, to cover the show every year.

Automakers also fly in media members to shows. Chris Martin, who works in public relations for American Honda Motor Co., says the company typically pays to send 10 to 15 reporters to the Tokyo Auto Show, while the big American companies are known to buy trips to the big U.S. shows for as many as 60 or 70 journalists, putting them up in hotels like the Omni and the Marriott.

Add to that the journalists from publications that don’t accept free trips -- such as the L.A. Times and most other large U.S. papers -- and others who have paid their own way, and the media turnout can be impressive. This week’s event in L.A. will be covered by journalists from publications as diverse as Japan’s Yomiuri newspaper and San Antonio Medicine magazine, represented by correspondent Andrew Horne.

“We do some reviews,” Horne said at a Wednesday news conference, “but I’m mainly here because I’m a car enthusiast.”

Getting the press in the building is only half the story. That’s when the media tracking begins.

Show organizers hire consultants to gauge coverage of their events compared with that of rivals. They tout their numbers to attract even bigger auto debuts the next year, which in turn can increase gate receipts.

Meanwhile, the car companies pay their own consultants to carefully measure the print, radio, TV and Internet reports on their brands and those of competitors, producing analyses that break down coverage, car by car, positive and negative, to determine unofficial winners and losers.

Then the car companies can do little but wait and hope that all the media coverage leads to sales. “Press days build buzz around a vehicle or a brand and that in turn trickles down to the consumer,” GM’s Cooney says. “If we’re No. 1 at the L.A. show, does that translate into sales?”

If so, the massive spending can be justified. If not, a company can find itself at the crux of a cruel calculus the next year. With space limited in most convention centers, organizers frequently allocate stand size based on auto industry market share.

“GM has dropped in sales. So we took away a little space from them and from Ford as well this year,” said Mark Schienberg, president of the Greater New York Auto Dealers Assn. He took about 8,000 square feet away from the GM stand, adding that “Toyota grew and we’re giving them a little more space.”

On Wednesday, Chrysler’s Robert Nardelli, the newest and most elusive of Detroit’s CEOs, strode the long aisles at his first-ever U.S. automobile show, studying competitors’ stands. “This has been a great experience for me. Great for emerging trends,” he said. “I keep wondering, what did I sell in the last hour?”

ken.bensinger@latimes.com

Begin text of infobox

2007 Los Angeles Auto Show

Where

Los Angeles Convention Center, 1201 S. Figueroa St.

When

Now through Nov. 25

Hours

* Today: 11 a.m. to 10 p.m.

* Saturdays: 9 a.m. to 10 p.m.

* Sundays: 9 a.m. to 8 p.m.

* Monday to Wednesday: 11 a.m. to 10 p.m.