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The Heavy Hitters Have Arrived At The Detroit Auto Show

The heavy hitters are ready to face off this month.  Mercedes, BMW and Audi will lead the European assault on the U.S. market with new SUVs, sports sedans and coupes at Detroit’s North American International Auto Show (NAIAS), but domestic manufacturers are starting to crank up some effective retaliation.

The Europeans, fresh from a strong 2014, will be helped this year by the fall in the value of the euro against the dollar, and will share with U.S. manufacturers the boost to sales at the gas-guzzling end of the market from the surprising and deep fall in the price of oil.

New vehicles from the upmarket Germans include a sporty SUV from Mercedes-Benz , the GLE Coupe, a big new SUV from Audi, the Q7, and a revamped BMW 6-series range. The 6-series comprises a two-door coupe, a convertible and a four-door Gran Coupe, making their world debut. Porsche is holding its cards close to its chest, only saying it will launch two versions of existing models. FCA’s Alfa Romeo will be marking its return to the U.S. market after nearly 20 years absence with the little 4C Spider. Alfa Romeo, the storied sports-car maker now emerging from a dormant period, won’t emerge as a strong player in the U.S. probably for a couple of years yet.

U.S. manufacturers though are getting ready to rumble, according to Kelley Blue Book senior analyst Karl Brauer.

“The high-end, high-performance European cars are poised to succeed, but so are the largest SUVs and trucks produced by the domestic manufacturers, and those have been growing faster than the luxury brands in the past year, though the luxury brands have grown too. Audi, BMW, Mercedes-Benz and Porsche should continue to grow in 2015, but probably not as quickly as brands like (FCA’s) Jeep and Ram or models like the (Ford) F-150, Ram 1500, (Chevrolet ) Silverado, Suburban, (Jeep) Cherokee and other trucks and SUVs,” Brauer said.

New models from domestic producers include hot versions of the Ford Mustang and Ford GT, and GM’s Cadillac CTS-V. GM’s Buick will launch the Cascada, borrowed from the European Opel division.

The European threat will be helped by the 13 per cent rise in the dollar against the euro since mid-year, which means Americans need fewer dollars to buy these cars. But the yen has fallen even more, 15 per cent over the same timescale, so expect an increasing Japanese threat, especially from manufacturers still making large proportions of their vehicles at home. Japanese content ranges from 85 per cent for Mazda down to Nissan and Toyota’s 52 per cent and 48 per cent, while Honda is the lowest with 22 per cent.  Which car giant will win?

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