Los Angeles auto show opens under a cloud

“The perception of Cadillac is of excess; it’s a high-profile, low volume vehicle and not the type of vehicle you want to be seen flaunting right now,” she said. “And you can’t take a chance that the media will catch Bob Lutz swilling Champagne or puffing on a cigar — it’s a PR nightmare waiting to happen.”

Seen as the second-most important U.S. auto show after the Detroit gathering in early January, the Los Angeles show in recent years has fostered a reputation as a venue where automakers can show off their latest fuel-efficient, “green” vehicles and high-end luxury cars, both of which are enormously popular in California.

This year's show will feature hybrid versions of the Ford Fusion, the Mercury Milan and the Lexus RX hybrid sport utility vehicle. Chrysler will offer a first look at three electric vehicles it’s developing, Mitsubishi will show a small electric car called the iMiEV and BMW plans to show the Mini E — an electric version of the two-door Mini Cooper that goes into testing phase at the end of the year.

On the luxury and performance side, Ford will show off its updated 2010 Mustang muscle car, Nissan's Infiniti luxury brand will launch its G37 convertible, while Nissan shows off its new Z sports car and the U.S. version of its boxy Cube — an inexpensive small car designed to compete with models like the Honda Element and Scion xB.

One of the most important cars on show in Los Angles will be the Honda Insight — a reworked version of Honda’s original gas-electric hybrid that will be a direct competitor to Toyota’s highly popular Prius.

But Honda’s Insight comes along at a time of falling gas prices, which puts its future in some question, notes Kelley Blue Book’s Nerad.

“I think that within the halls of Toyota there are significant concerns about how big a premium you can charge for a hybrid and how many you can sell,” he said. “There are cheaper ways to save gas. It depends on how much fuel economy you want — what is the consumer looking for? That is a moving target, and our research shows interest in hybrids is directly tied to cost of gas. It’s a pretty direct correlation.”

“So the Insight puts more pressure on the Prius, and all companies that make hybrids are looking at the fact that demand might be limited,” he continued. “If fuel prices stay at current levels the overall market for hybrids will be smaller than if we had $4 or $5 gallon gas, so it’s going to take longer to pay back the premium you pay for buying one of these vehicles.”

More on Carlos Ghosn | hybrid cars

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