Detroit Auto Show: Challenges remain for carmakers

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The "Wow" factor is in play this week as carmakers roll out their best new models at the 2018 North American International Auto Show in Detroit. Chinese automaker GAC has introduced three models, including an all electric vehicle, in its third appearance at the Motor City extravaganza. Guangzhou-based GAC plans to enter the American auto market in 2019. Dan Williams has the details.

Glitzy launches gleaming cars imposing stands. The 2018 North American International Auto Show opened with a succession of new vehicle model reveals. No expense has been spared as the auto industry targets a new-year buzz. But the warning signs remain. After seven years of growth, 2017 saw a near-two percent slide in U.S auto sales. Those inside the industry remain upbeat.

ALAN BATEY GENERAL MOTORS EXECUTIVE VICE PRESIDENT "People will say that 2017 was down, but it was down off an all-time record and it was down about two percent. So at some point it is going to plateau. We expect the year ahead to be very strong."

That message was emphasized by US Transportation Secretary Elaine Chao in a keynote address. She hopes the impact of just-enacted US tax cuts, which reduced the US corporate tax rate from 35 to 21 percent, will help the industry. Some analysts predict those reforms will also boost sales in the luxury car market.

DAN WILLIAMS DETROIT "There are potential roadblocks ahead for the auto industry. A possible tightening of access to credit, as well as the risk of higher Federal Reserve interest rates could drag down new car sales. And then there are the ongoing negotiations over a revamp in the North American Free Trade Agreement."

US President Donald Trump has threatened to abandon the agreement and is calling for a greater percentage of car parts to be sourced in the US and not from Mexico or Canada.

JOE HINRICHS FORD PRESIDENT OF GLOBAL OPERATIONS "We do support the modernization of NAFTA. We have had conversations with the administration. We believe in free and fair trade. We believe that North America needs to be competitive globally and NAFTA is a big part of that. We are a part of those conversations, hopefully we see a resolution that will work for all three countries."

Ray Tanguay is an automotive advisor to the Canadian Government. He warns that if the US untangles itself from NAFTA, both the industry and the consumer would suffer.

RAY TANGUAY AUTOMOTIVE ADVISOR TO CANADIAN GOVERNMENT "Anybody who is going to try and interrupt that trade flow and put some barriers into that is just trying to hurt the industry period. To put a tariff on it is increasing the cost. If you increase the cost, you increase the cost of the car, if you increase the cost of the car you going to reduce the demand."

These are the cars that will fill showrooms across the globe. But whether the volume of sales moves in an upward curve, remains to be seen. Dan Williams CGTN Detroit.