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Carmakers Roll Into LA Auto Show at Time of Soaring Sales -- And Uncertain Future

Lyft uses the backdrop of the LA Auto Show to announce it is on pace to hit $1 billion in gross annual revenue.

John Sculli / Getty Images

On the surface, everything’s humming along for the automotive industry. U.S. car sales are on track to surpass the record set 15 years ago. Manufacturers are selling tons of sedans, SUVs and pickup trucks — which are the most profitable of vehicles — thanks to cheap gasoline prices.

So why worry?

As the industry rolls into Los Angeles for the largest consumer auto show of the year, it finds itself confronting an existential crisis. Its executives will meet in the city that defined America’s car culture through films like “American Graffiti,” “Gone in 60 Seconds” and “The Fast and the Furious” to confront an uncertain future.

As though to punctuate the racing pace of change, Lyft co-founder and President John Zimmer used the backdrop of the high-profile show to announce that his ride-hailing service is on track to generate $1 billion in gross annual revenue.

Executives from General Motors, Honda, Toyota and Mercedes-Benz will join newcomers Lyft, Google and Uber to discuss the technological changes that will redefine transportation in the 21st century. The topics are as exciting as they are disruptive: The rise of the connected vehicle (and the growing vulnerability to hacking), the advent of self-driving cars and the decline of car ownership among millennials (who are just as happy to share a car or hail a ride).

“We are in a renaissance of the automobile. It’s the rebirth of the car that goes now beyond the shiny object and the latest fashionable colors,” said Thilo Koslowski, automotive analyst with Gartner. “This is all about how the brands are differentiating themselves — based on the technology.”

Missing from the formal agenda of Tuesday’s Connected Car Expo, which precedes Friday’s opening of the Los Angeles Auto Show, is the one topic on everyone’s mind: The possibility that Apple will make its own car and disrupt the auto industry the same way it has the telecommunications and entertainment industries.

“Honestly, it’s one of the issues that keeps me up at night — what happens when Apple decides they’re going to build a car?” said Frankie James, managing director of General Motors’ advanced technology office in Silicon Valley. “If they decide to do a car, they could completely change something like the luxury segment. That’s something we have to pay attention to. What can we learn about how they operate that we can apply?”

The organizers of the LA Auto Show launched the technology-focused sessions three years ago, after discovering attendees like Qualcomm and Intel were crashing its party.

This year, the Connected Car Expo will highlight 10 startups whose inventions hold promise for the industry — from Capio, maker of speech recognition technologies that could be used for voice-activated controls in a vehicle, to Quanergy, which has developed real-time 3-D mapping and object detection for use in self-driving cars.

“Since we’re in California and at the new epicenter of the auto industry, we feel it’s important for the auto industry to have a place where it can meet, do business and discuss issues that are transforming the business,” said LA Auto Show spokesman Brendan Flynn.

Automakers will reserve their biggest technological announcements for the annual Consumer Electronics Show in Las Vegas, which has become a pivotal event for the industry, notes Doug Newcomb, a longtime journalist covering car technology and founder of the Connected Car Conference.

Still, Los Angeles is a venue not to be ignored — and not just because of its proximity to affluent car buyers who crave a glimpse of the latest luxury and performance rides. It’s an opportunity for carmakers to tout their technological street cred through partnerships to bring the latest in communications and entertainment systems into car dashboards with Apple’s CarPlay and Google’s Android Auto.

“The auto industry absolutely has a schoolboy crush on Silicon Valley,” said Eric Noble, president of CarLab, an advanced automotive consulting firm. “Carmakers never talk about their suppliers. But they brag. It’s sort of like the cute girl in the sweater in the front row [of a class]. She’s not really talking to me, but I sit one row behind her.”

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