How the Cancellation of Detroit’s 2020 Auto Show Affects Our Economy

The 2020 North American International Auto Show — an economic feast twice denied
detroit auto show
Auto Show photograph courtesy of North American International Auto Show 

The bright lights, the elaborate displays, and hundreds of shiny, new vehicles that should be filling the exhibit halls of the TCF Center right about now are nowhere to be seen. Instead, workers spent the spring preparing the space for a seemingly inevitable flood of COVID-19 patients.

The 2020 North American International Auto Show (NAIAS) was canceled in March, as so many large gatherings were, to avoid the spread of COVID-19, and the Federal Emergency Management Agency converted the show’s venue of 31 years into a field hospital for patients overflowing from local hospitals wards. But the beds went largely unfilled, and on May 7, Mayor Mike Duggan announced the field hospital’s closure — more than a month before the auto show would have begun.

As prudent as those moves were, the loss of the industry’s marquee event is an especially painful financial blow to Detroit. The 2019 NAIAS was the last to be held in January before the move to June was supposed to begin this year. That means the loss of this year’s show creates a bruising 2.5-year gap.

Downtown businesses muscled through the NAIAS-less winter, when the show usually generated an estimated $430 million in revenue off of some 800,000 attendees, on the now-dashed promise that the new, juiced-up summer show — complete with a street fair and festival that would have been unthinkable in a Detroit winter — would be an even bigger moneymaker.

For a business corridor and gig economy already devastated by coronavirus-related shutdowns, social-distancing guidelines, and sudden, epic unemployment rates, this multimillion-dollar hit is just another existential threat. What’s more, thousands of people, including carpenters, electricians, models, Teamsters, designers, cooks, and rideshare drivers, are missing out on a significant chunk of their typical yearly income.

“You’ve got millions of dollars that aren’t going to be spent, and that kind of thing ripples up and down the supply chain,” says Allen Goodman, a Wayne State University economics professor. “It’s going to be a major hit, especially for the hotels, restaurants, and entertainment facilities that were depending on this huge week of commerce.”

As the preferred florist for the TCF Center, the Viviano Flower Shop provides most arrangements at NAIAS and its associated events. Joe Viviano, who handles the finances for the family business, says NAIAS-related sales generate at least 5% of its annual revenue.

tcf center detroit auto show
The TCF Center, below, which was to host this year’s auto show, instead served as a COVID-19 field hospital. // Photograph courtesy of TCF Center

Likewise, restaurants, shops, and hotels are feeling the squeeze. Mudgie’s Deli and Bar owner Greg Mudge says the week of NAIAS normally brings about a 25% increase in business every year — and that was when the show took place in winter. As hard-hit businesses struggled to reopen amid easing shutdown restrictions, a June NAIAS could have been a panacea. “This has crushed us, and cancellation of the auto show is piling onto all this,” says Mudge, who has had to lay off 22 of his 25 employees. 

One industry that seems relatively unfazed by the loss of the 2020 NAIAS is, surprisingly, the car business itself. Auto analysts do not expect the impact of the show’s cancellation to be especially significant in light of the industry’s other concerns.

“Auto shows will be just a minor part of what happens with the auto industry right now,” says Autotrader executive analyst Michelle Krebs. “Survival of companies, dealerships, and suppliers is the most important thing, and then consumer confidence, employment, and ability to get credit. Those are the key factors that fuel car sales.”

Indeed, Detroit’s carmakers seem fairly well-positioned to ride out this COVID-19 downturn. Krebs predicts overall 2020 sales of between 12 million and 13 million vehicles, which would be more than in the worst year of the Great Recession. Carla Bailo, president of the Center for Automotive Research, agreed: “Sales are down, but less so than anticipated. That’s because auto dealers have done a fabulous job of ramping up online sales and service.”

Goodman, the Wayne State economist, also believes the auto industry will recover more quickly than other sectors. “It’s the places that deal with a lot of customers that are going to get hammered,” he says. “It’ll be easier than running something like a Tigers game or a Corktown restaurant.”

Even though Bailo says clever online sales strategies are enabling auto dealers to scrape by in the absence of the auto show, she does not regard the show itself as superfluous. “We need it to come back,” she says “It’s part of Detroit’s heritage, and the plans for this year were phenomenal. It was really going to turn into a festival of vehicles and mobility.”

In the face of a bleak present, many Detroiters are looking forward to NAIAS 2021, to a healthier auto industry, and to a recovered city. “We will find a way to make it through this,” Mudge promises.

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