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Detroit Auto Show: It's a Small Car World After All

Chrysler, Ford (F) and General Motors are betting that the Atlantic Ocean has shrunk and consumer tastes are converging, especially in the hotly contested "C-car" segment of small cars.

A key reason that so-called "world cars" have failed before now is that consumer tastes were just too different, especially on different sides of the Atlantic. But the Internet has helped make it a smaller world, along with higher gas prices in the United States.

"These customers are much more unified than you might think, about what they want in a vehicle," said Gunnar Herrmann, Ford global C-segment vehicle line director. He spoke at an embargoed sneak preview for reporters last month in Ford's hometown of Dearborn, Mich., in preparation for this week's Detroit auto show press days.

For instance, it's conventional wisdom in the U.S. auto industry that Europeans love hatchbacks, but Americans don't. That's one of the reasons Saab never became a mass-market brand in the United States. It's too late for Saab, but American attitudes towards hatchbacks could be changing.

Derek Kuzak, Ford global vice president of product development, said in an interview at the Consumer Electronics Show in Las Vegas earlier this month that Americans are becoming more interested in hatchbacks like the new Ford Focus five-door. At the same time, he said Europeans are getting more interested in "multi-use vehicles," and less fixated on sedans and hatchbacks. Kuzak said his opinion is based on market research, plus his experience in a six-year stint at Ford of Europe.

The car companies are praying this convergence is for-real, even though U.S. gas prices have moderated, because there is huge money at stake.

Mark Fields, Ford president of the Americas, said in Ford's press briefing last month that today's Ford Focus in North America represents only about 220,000 cars a year. The new Focus four- and five-door models, which are based on an all-new global platform, represent about 850,000 units worldwide.

Not only that, the new platform on which the Ford Focus is based replaces three existing Ford platforms. The three platforms are similar in size but distinct mechanically, so there are few economies of scale. The new C-segment platform eventually represents 10 different models accounting for a total of more than 2 million units, with a reduction in per-unit costs in proportion, Fields said. Rivals GM and Chrysler are following a similar global platform strategy.

"Through global platforms, small cars become profitable," Fields said.

Photo: Ford

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