Detroit, January 8:

The Detroit auto show, the traditional barometer of mood in the industry, has opened here, reflecting the serious crisis facing American car manufacturers.

All the elaborate glitter of the displays by General Motors (GM), Ford and Chrysler in the exhibition halls by the Detroit river will not erase the negative headlines about factory closures, tens of thousands of jobs lost, overproduction and dwindling market share.

Chrysler alone among “the big three is profitable whereas GM and Ford find themselves in a sort of struggle for survival”, industry researcher Ferdinand Dudenhoeffer said. German motor bosses will be travelling to Detroit with mixed feelings. The B&D Forecast Institute has predicted a decline of market share in the US from 5.2 per cent in 2004 to five per cent for 2005, with the poor performance of VW as the main reason.

Volkswagen has massive sales problems in the US, with sales sinking from January to the end of November 2005 by 15.5 per cent compared to the previous year, to approximately 198,000 vehicles. The luxury model, the Phaeton, will be taken off the US market in summer 2006, and for 2005 overall VW estimates its US trade will lose $1.18 billion, as it did in the previous year.

BMW is in a fundamentally better position and together with the Mini is set to reach the 300,000 mark for US sales, a new record. Porsche should see a slight increase in sales. Mercedes Benz can expect to sell 215,000 vehicles.

The Stuttgart-based company was at practically the same level as the previous year by the end of November, with a reduction in sales of 0.9 per cent. Exciting product launches can be expected from German manufacturers at the Detroit motor show: Audi can get excited about the launch of its Q7 SUV, which is tailor-made for North America.

Daimler-Chrysler can similarly celebrate a world premiere with the large all-terrain vehicle Mercedes-Benz GL, which should also find its main market in North America. The picture is quite different for the Japanese, who remain right on track with their high-end vehicles in the US market. They are chiefly responsible for the continuing reduction in market share of American manufacturers.

Goldman Sachs analysts calculate that this will be at only 54.5 per cent in December, against 58.1 per cent the previous year. The dramatic fall is the result of a failed design policy.