The Scion FR-S concept sports coupe. Andrew Gombert / EPA
The Scion FR-S concept sports coupe. Andrew Gombert / EPA

Lavish car launch events obscure their products



Walk into the New York International Auto Show at the world-renowned Javits Centre and you'll be greeted by a Mini suspended halfway up a wall and the sight of so many Scions stacked against one another that they look like cord wood. That is, if you're not blinded by all the neon, branding streamers and projector beam displays vying for your attention. In other words, there's a lot of glitz and sizzle, all meant to sell you, the consumer (or, at least the New York consumer) and we, the auto sceptics, on the juiciness of their new products.

Only now it seems that New York, New York's auto show doesn't quite have enough glitz. Actually, it seems that auto shows in general don't have enough glamour because, judging from automakers' recent attempts to gain attention, they no longer pass muster in the sizzle department.

Once upon a time, a fuel crisis and an economic stimulus package ago, auto manufacturers used to unveil their new products on the floors of auto shows. Of course, automobile marketers being the crassest of snake-oil salesmen, there was always a sense of theatrics about the process. Bob Lutz once drove a Jeep through a plate-glass window at Detroit's Cobo Hall just for effect. And one hasn't seen a truly public display of fear until one has watched a Nissan middle-manager rappel down from the roof of an auto show and then try to nonchalantly natter on about his new SUV.

Perhaps it's because it became obvious that further elevating the theatrics of these introductions might start requiring human sacrifice, or simply because public relations consultants decided that auto shows lacked the requisite feng shui for that truly diva-ish, over-the-top Liza Minelli moment. But, of late, more and more automakers are opting for increasingly private new model introductions.

Oh, the whole process still revolves around said auto show. After all, consumers and we auto hacks are already in attendance. But these private viewings offer so much more panache with their supposed intimacy, not to mention free-flowing refreshments and tightly dressed serving staff.

These shindigs have escalated into the realm of true Roman orgy. Mercedes-Benz, for instance, introduced us to the concept of its revised A-Class by tying it in to the grand opening of its new downtown Manhattan dealership, a US$220 million - yes, a quarter of a billion dollars - testament to the power of the automobile. The refreshments bubbled, the hyperbole flowed and the whole affair seemed more like a first-class art exhibition than a car launch.

Not to be outdone, Volkswagen held a private showing of its new Beetle - less iconic and much more of a car than its predecessor, though I'm not sure that's what people want from their Punch Buggy - at New York's Pier 36 to thunderous music and free-flowing libations. As if that wasn't enough, Volkswagen took the assembled multitudes to watch Fergie waggle her tush at a Black Eyed Peas concert (GM is to be blamed for this, having set a precedent by hiring Kid Rock - an amazing live performer, by the way, to launch a Buick). The thought of an entire herd of normally ultra-cynical auto hacks suddenly getting all groovy at a concert is simply too ugly to contemplate.

Ford had a lavish dinner to introduce us all to the fact that their Taurus had a new front grille. Lexus rented out the luscious Centre 548 art gallery, the entire event catered by famed Iron Chef star Masaharu Morimoto, all to show off a hybrid Lexus whose main appeal, one presumes, is to be its frugality. Range Rover and Jaguar also had soirées to show off their latest wares. Megan Fox was allegedly to be in attendance but, since I didn't get up close and personal enough to rub elbows with the Transformer, I can't actually confirm her presence. But, hey, just the possibility got me to attend, right?

Indeed, for an industry supposedly just emerging from the worst crisis since the Great Depression and still struggling for profitability, it all seems a little over the top. No one is so naive as to expect a car's design and abilities to speak for themselves, but there seems to be a race going among car makers to out-Caligula the other. It's great to be along for the ride, but one can't help but wonder how bad the hangover is going to be.

Showcase showroom

Yes, Mercedes-Benz's new flagship dealership in Manhattan cost almost a quarter of a billion dollars. Not only is 770 11th Avenue expensive because New York City real estate costs a bizillion dollars per square inch, but the new outlet is truly over the top. There's a cafe I'm sure will become a trendy hot spot even if you don't own a car, underground parking for 550 cars and a waiting area more hedonistic than you'd find in a Beverly Hills cosmetic surgeon's office. There are 71 service bays, a completely computerised, automatically disgorging parts supply system and two guys in golf carts whose only job is to shuttle parts from the kiosk to awaiting mechanics. Truly, this must be grease monkey heaven.

Fuel fights, less-bug Beetle and Malibu revamp

It somehow makes sense that in New York, as mind-bendingly expensive as that burg may be, that the compact car revolution would actually gain some traction. The city is, after all, the one North American urban centre as congested as European metropolises. So, the rallying cry of the recent New York International Auto Show was 40, as almost every corporate CEO/publicist/marketing maven present trumpeted that their cars achieved the magical 40-miles-per-US gallon (5.88L/100km) mark for motorway fuel mileage.

Though it's old news, Hyundai proclaimed loudly that all models of its new Elantra achieved 40mpg on the motorway where only specific models of the new Ford Focus (the SFE) and Chevrolet Cruze (the Eco version) were similarly scrooge-like. Ditto for the new Civic, which boasts 41mpg but only from its HF model (there's also a new Civic Hybrid that boasts 44). Indeed, if there was a disappointment at the show, it's that Honda did nothing revolutionary to its best-selling compact. The Civic soldiers on with essentially the same 1.8L four-banger and much the same platform. Few were thrilled with the rehashed styling and the new interior was generally seen as backward step.

Subaru's remake of the Impreza, on the other hand, impressed. Oh, one could carp that it gets just 36mpg motorway fuel economy, but it's not bad for a car with all-wheel-drive. And it's an improvement over the outgoing model thanks to reduced weight and the standard four cylinder's reduction in displacement to 2.0L.

More questionable may be Volkswagen's remake of the new Beetle. It's obvious that this latest version has exchanged its iconic musings for more mainstream styling and pragmatic ergonomics; designer Karl Bischoff calls the result "more power than flower." But is that what consumers really want from the "people's car"?

But there was precious little second-guessing Chevrolet's direction with the all-new 2013 Malibu. Decidedly sportier looking than the outgoing model, the revised Malibu picks up a few designer titbits from the Camaro, is widened about three inches and is more aerodynamic. It will only be offered with a 2.5L in-line four with 190hp. As well, GM will be offering an ECO version that, with the optional e-Assist hybrid system, is rated at 38mpg; extremely creditable considering its size.

Also present at the New York show was the Scion IQ, Toyota's answer to Mercedes's Smart car. But the real star of Scion's booth was the FR-S. We've seen glimpses of this red-hot sportster before as part of Subaru/Toyota's FT-86 collaboration, but this is the most production-ready sample yet. It also should be relatively affordable because much of the technology - including the 2.0L flat-four engine - is supplied by Subaru.

In Mercedes's new downtown dealership, Daimler took the wraps off its new A-Class. This is an all-new concept, the A-Class morphing from a dowdy little grocery getter into an aggressively aerodynamic hot hatchback. All flairs and swoopy styling, the concept is powered by a direct-injected and turbocharged 2.0L four, just the ticket for hunting down Golfs and Mini Coopers. It's doubtful the car will get the achingly gorgeous pincushion front grille, but insiders claim the rest of the concept is very close to production.

But not everything was cheap, cheerful and frugal. Jeep provided the backstop for the contrarians, unveiling the latest in its Hemi-powered SUVs. The new SRT8 versions of the company's Grand Cherokee will boast 465hp from its 6.4L Hemi V8 and a claimed zero-to-98kph time of just 4.8 seconds. Chrysler is a little less sanguine about its fuel economy, saying only that there's been an "improvement" over the current model's combined 13mpg.

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'Joker'

Directed by: Todd Phillips

Starring: Joaquin Phoenix

Rating: Five out of five stars

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

David Haye record

Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4

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