TheChek News Flow

Get back to the office, say CEOs like Jamie Dimon and Elon Musk. I couldn’t agree more. Exchanging ideas in person is the lifeblood of any thriving enterprise. Give me 50 hours in the big city any week—no, 60. Add 10 for commuting—that’s quality audiobook time.

Still there? Sorry—sometimes management reads the first few lines. Between us, I’m following a standard hybrid plan of high-output isolation mixed with strategic visibility. On the busiest work days, I roll out of bed and straight into business slippers, avoiding human contact at all costs. On office days, I do a bit of extra noisemaking to leave the impression that I was there for longer. Squeaky shoes and jingly pocket change help.

Office REIT yields of around 7.5% speak volumes about work-from-home expectations. That’s more than double the average payout for other types of real estate investment trusts. The market is saying that payment cuts are coming, suggesting that occupancy levels aren’t going to bounce back to former levels soon.

“If we don’t see signs of organic growth bottoming in the next 18 months, we think dividend cuts may be back on the table to preserve capital and reduce leverage,” wrote Morgan Stanley analyst Ronald Kamden this past week.

Office REITs have fallen harder than the rest of the group this year, and the average big one goes for just seven times next year’s projected funds from operations. That’s half the broader REIT average. Before Covid, the discount was 12%. Office landlord incomes are getting a lift from a bounceback in variable fees on things like parking, but vacancies have crept higher. REITs with New York City exposure enjoyed occupancy percentages in the mid-to-high 90s a few years ago. Now they’re in the high 80s to low 90s.

Kamden reckons that nearly all the office REITs he covers will post lower funds from operations next year. Cash balances will help, but if landlords want to preserve cash, many will need to raise outside capital. Kamden is bullish on an office REIT called Highwoods Properties HIW +2.33% (ticker: HIW), which yields 6.7% and operates in Sun Belt markets with lower exposure to work-from-homers. But he recently reiterated bearish calls on New York heavyweight Vornado Realty Trust VNO +1.71% (VNO), which pays 8%, and the smaller Office Properties Income Trust OPI +2.46% (OPI), with exposure to Washington, D.C.; Chicago; Atlanta; and Silicon Valley. It pays 13%.

There are better income opportunities, including outside of REITs. The market strategists at Morgan Stanley expect dividend stocks in general to outperform as inflation eventually comes down from peak levels. They recently ran a screen for promising ones, then asked the firm’s industry analysts which to prefer. Some of the picks are expected to pay more than 4% in dividends next year while providing total returns over 30%. Be reasonably confident in the first number but only prayerful about the second.

On that list are Ohio utility FirstEnergy FE +1.93% (FE), which for now yields 3.8%; drugmaker AbbVie ABBV +1.09% (ABBV), 3.9%; East Coast banker Citizens Financial Group (CFG), 4.5%; and wheeze facilitator Philip Morris International (PM), 5.4%.

As for the future of offices, economists say a labor shortage has shifted power to wage-earners, who want better work-life balance. They must be talking about younger ones. As a Gen-Xer, I’m motivated more by traditional business values, like greed and insecurity. I expect to gradually make more frequent trips to the office. For now, if anyone important is looking for me, you just heard me jingling into a meeting, and it sounded important.

Let me turn to something tangentially related to this week’s cover story: how to charge customers for sitting through advertising. Last week in this space I mentioned Apple ’s (AAPL) yearly iPhone presentation. It’s free, of course. Cupertino could learn a thing or two by looking south, to Anaheim, where Walt Disney (DIS) just held a typically biennial event called D23 Expo.

Tickets were $89 for one day, $229 for all three. Choice seating ran $899. Buyers had to belong to a fan club called D23, after Disney’s founding year of 1923, at gold level, which costs $99.99 a year. And they had to hurry, because expo tickets sold out in July. These lucky few—well, enough to pack the Anaheim Convention Center, which can hold 7,500—got to hear about things like minor ride enhancements and new character greetings. For example, the Star Wars land will soon have a Mandalorian walking around with an animatronic Grogu (baby Yoda to non-sticklers).

I mention this because I just returned from my first Disney World trip since before the pandemic. By now you might have heard that ticket prices have soared, and there’s a new upcharge for something called Genie+ to avoid punishing ride waits, plus another for something called Individual Lightning Lanes on rides too popular to be part of Genie+. Availability can run out. Effectively at 7 a.m. there’s a new show called Parents Frantically Poking Smartphones to Buy Privileged Access to Slinky Dog Dash.

It’s hard to quantify true Mickeyflation, because some previous freebies are gone, like the bus from the airport. But I’d guess that my costs were up 40%, fun was down 20%, and the kids were 15% whinier. That last one is on me—they turned feral from too much screen time during the pandemic.

All of this has done wonders for Disney’s park operating margins, but grumbling customers have taken to switching CEO Bob Chapek’s last name to Paycheck. I’m watching for signs of waning demand, but not seeing them yet. And the fact that so many paid so much for so little at the D23 Expo gives me confidence in the cash flows.

But I’m vacationing closer to home from now on, not least because airline travel has come to resemble a porta-potty visit—sometimes necessary, but never good. I’ve got my eye on Bushkill Falls, which they call the Niagara of Pennsylvania. Park entrance is $15, and there’s a $3 charge for a trail map, but no lightning lanes, so long as the weather holds.

Rising interest rates in the U.S. and Europe, a strengthening dollar, and a volatile market that makes investors risk-averse are usually bad news for emerging markets. But a few of them are holding up relatively well and poised to outperform developed markets.

Emerging markets have run into trouble in the past when the Federal Reserve raised interest rates. Countries that borrowed heavily in dollars face rising debt burdens and a weaker currency to try to finance them. Capital tends to flee to safer shores as yields rise elsewhere, further tightening financial conditions and exacerbating the pain.

That is still the reality for a handful of troubled emerging markets, including Turkey, Colombia, and South Africa. But as Barron’s reported earlier this year, more emerging markets this time around are in better shape.

Strong demand for oil and metals like copper and nickel is helping commodity producers, including Indonesia. Emerging market central bankers, such as those in Brazil, have been earlier and more proactive in fighting inflation than the Fed. Structural trends—including tensions between the U.S. and China and the war in Ukraine—benefit countries such as India and Indonesia.

The MSCI Emerging Markets index, at 10.5 times next year’s earnings, is cheaper than the 14 times it has averaged since 2010. With the pandemic, emerging markets have traded at their cheapest valuation versus developed markets since the global financial crisis. Part of the discount stems from the long list of troubles plaguing China—which accounts for almost a third of the MSCI index—as it grapples with a property slump and zero-Covid approach that has locked down millions of people in major cities.

Optimists hope that China will continue to introduce more stimulus and ease up on its Covid lockdowns after October’s 20th Party Congress, when top leadership is selected—moves needed for Chinese stocks to recover meaningfully.

But some emerging markets are already attractive. Brazil, India, and Indonesia are primed to outperform, as their economic situations offer an attractive counter to the challenges facing the U.S. and China.

While the U.S. and European markets are just now feeling the sting from higher prices, Brazil ended last year as one of the worst-performing markets as the country battled double-digit inflation. Corporate earnings took a hit.

Brazil’s central bank raised interest rates over the past 18 months from 2% in early 2021 to 13.75%. That has put it far ahead of its U.S. and European counterparts and closer to the end of its rate hike cycle, with possible cuts coming later this year or next.

That would set up valuations to recover, while U.S. and European valuations are weighed down by rising rates, says Todd McClone, co-manager of the William Blair Emerging Markets Growth fund (ticker: WBEIX), which has been buying more stocks recently in Brazil.

One way to tap into Brazil’s improving outlook is through Brazil’s stock exchange operator, Brasil Bolsa Balcão (B3SA3.Brazil). “As rates go down, equities should bounce, and there will be more secondary and initial public offerings,” McClone says. “Brazil is unique in that it has a private-equity culture, so we could get more IPOs.”

As Brazil’s outlook improves, GQG Partners Chairman and Chief Investment Officer Rajiv Jain favors energy, materials, and financial companies, including oil giant Petrobras (PBR) and Banco Bradesco (BBD). The bank trades at 6.6 times 2023 earnings and generates a 16% return on equity. Jain thinks it can pay more than a 7% dividend yield.

“There’s a fear of nonperforming loans because of higher rates, but [the sector] is not coming from a period of crazy lending in this cycle like it did in 2013 to 2014,” Jain says. Such loans “will rise but not spike,” he predicts.

Brazil’s presidential election in October could inject volatility. The leftist candidate, former president Luiz Inácio Lula da Silva, is expected to edge out President Jair Bolsonaro. At current prices, the market is already bracing for a Lula victory. An upset by Bolsonaro would offer markets a boost, McClone says.

Longer term, the country stands to benefit from the energy transition. Brazil is known as a major oil producer. More surprising is that roughly 85% of its installed power-generation capacity is renewable, including hydro and wind—the highest of the Group of 20 nations, according to TS Lombard.

Indonesia is also well positioned for strong commodity demand, especially as countries scramble for alternatives to Russia’s nickel and oil. Demand for its metals and palm oil has contributed to a record current-account surplus, helping to keep the rupiah relatively strong. Its resources position it well for the long term, with many of them needed for green-energy products.

The short-run bull case for Indonesia is that the economy is reopening as Covid restrictions are eased. Retailers are in the sweet spot for a recovery, says Laura Geritz, co-manager of the Rondure New World fund (RNWOX), which is overweight Indonesia with companies like Ace Hardware Indonesia (ACES.Indonesia).

While Indonesia is among the best-performing markets so far this year, McClone, who has a heftier allocation to the country than peers, still sees potential, noting that Indonesian companies are expected to generate 30% earnings growth in the coming year. McClone’s fund owns companies such as Bank Rakyat Indonesia (BKRKY), a microfinance lender with a 30% return on equity, and United Tractors (UNTR.Indonesia), which sells equipment for coal mining, which is seeing increased demand in the wake of disruptions created by the war in Ukraine.

Indonesia and India are also well positioned to take market share in the global supply chain from China as U.S.-China tensions increase and companies look to diversify production, especially in areas like technology, medical equipment, and high-end manufacturing.

If there’s an emerging market that fund managers see as taking China’s role in the asset class, it is India, which Capital Economics says is on track to becoming the world’s third-largest economy by 2030. Foreign investors have been net buyers of stocks in India in recent months.

While China is struggling to get out of its economic rut, India is emerging from a decadelong malaise, following years of tackling a debt crisis and short-term pain from major structural reforms—among them tax reform and demonetization, which invalidated 85% of the currency in circulation overnight in 2016 in a bid to crack down on tax evasion and corruption.

India’s corporate and bank balance sheets are in their healthiest condition in almost a decade. The changes that took a while to digest are now collectively “repowering India,” says Justin Leverenz, manager of the Invesco Developing Markets fund, which has a fifth of its portfolio in India.

He points to a wave of digitization and formalization of swaths of India’s informal economy. India is also at the cusp of a housing and credit growth recovery—a marked contrast to China, which is reeling from a property market bust.

William Blair’s McClone is finding opportunities in HDFC Bank ( HDB ), which he describes as the JPMorgan Chase of India, as well as tile company Kajaria Ceramics (KJC.India) and property developers including Oberoi Realty (OBER.India), which is well positioned for a housing recovery.

India is one of the pricier parts of emerging markets. It is also an energy importer, needing roughly 1.1 billion barrels of oil a year. While energy prices have eased off their highs, McClone says a $10 increase in oil prices would hurt its fiscal situation and hamper its expected economic growth, which the International Monetary Fund forecast at 7.4% economic growth this year.

While roughly 5% of its energy needs came from Russia before the war in Ukraine, that has climbed to 20%—and that oil is priced at roughly a 20% discount, McClone says. Policy makers are also helping to buffer its currency by tapping $50 billion of its reserves. Further weakness is a risk, but India still has roughly $560 billion in its reserves.

India, Indonesia, and Brazil combined account for less than a quarter of the broader emerging markets index. Some active funds have higher allocations, including Jain’s GQG Partners Emerging Markets Equity fund (GQGPX), which has a quarter of assets in India, 18% in Brazil, and almost 2% in Indonesia. McClone’s William Blair Emerging Markets Growth fund has 21% in India, 6% in Indonesia, and 5.6% in Brazil.

Other funds with strong track records and bigger exposure to at least two of the three markets include Rondure New World, which has 17% allocated in India, 8% in Indonesia, and 3% in Brazil, and Touchstone Sands Capital Emerging Markets Growth (TSMGX), which has 11% allocated in Brazil, almost 31% in India, and 3% in Indonesia. Fidelity Emerging Markets Discovery (FEDAX) has about 9% allocated in Brazil, 19% in India, and 4.5% in Indonesia, according to Morningstar Direct.

Given the sharp moves in currencies, with the yen and euro falling to multidecade lows versus the dollar, Jain says he sees more macroeconomic risk in developed markets like Japan and Europe that are grappling with high levels of leverage, less fiscal discipline, and anemic growth prospects than emerging markets like India, Indonesia, and Brazil.

While emerging markets are far from immune to the jitters hitting the U.S. and other markets, some of these countries are going against the trends playing out in the U.S. and Europe. That is a good reason to take a closer look.

Airlines have taken a one-two punch, with the pandemic cutting global travel, and labor shortages and spiraling fuel costs crimping profits.

But Ryanair Holdings , Europe’s largest airline by passenger numbers, stands out from the pack, having hedged 80% of its fuel until early next year, protecting itself from price volatility. It also stuck with much of its workforce when others reduced head count to save costs. These moves put Ryanair in a strong position to benefit from a rebound in travel.

The stock (RYA.Ireland), which also has American depositary receipts trading on the Nasdaq, has plunged along with its peers, losing 21.45% over the past year to 12.79 euros ($12.85). The dip could be an excellent buying opportunity. The Stoxx Europe Total Market Airlines Index is down 23.4% over the same period.

Ryanair, like almost all of its rivals, saw travel fall off a cliff in the past two years due to Covid-related lockdowns. Just when passenger numbers were picking up, Russia invaded Ukraine and related sanctions reduced fuel supplies and disrupted Eastern European routes.

The industry has also suffered some self-inflicted pain. Airports and some airlines let too many workers go during the pandemic and now can’t recruit fast enough to handle the spike in demand.

Gerald Khoo, an analyst at broker Liberum, wrote in a note that Ryanair benefited from an early commitment to growth.

“It chose to keep flight crews and aircraft current and operational through the pandemic,” he wrote. “Not only did this mean its own staffing levels were in the right place for the surge in volumes that has come through, but also it gave its suppliers and partners the confidence to make similar commitments themselves.”

Others agree. Alexander Paterson, an analyst at Peel Hunt, has forecast the stock could increase 46.6% to €18, and says the business continues to increase its market share.

Ryanair is targeting 166.5 million passengers for 2023, an increase from 97.1 million recorded in the 2022 annual report. “We see recent weakness as an excellent buying opportunity for a group with solid growth potential,” Paterson wrote in a note. The Dublin-based airline has 90 bases in 36 countries, with a focus on Europe, and a market value of €14.1 billion. It flies 483 Boeing 737s and 29 Airbus A320s, with 137 Boeing 737s on order.

The company fetches a multiple of 11.6 times this year’s expected earnings and is valued at a 10% discount to its peers. Ryanair posted a pretax loss of €430 million for the year to March 2022, which was narrower than the €1.1 billion loss in 2021. Total 2022 revenue was €4.8 billion, significantly higher than €1.6 billion in 2021.

A Ryanair spokesperson told Barron’s that the company is operating a “full schedule of 3,000 daily flights this summer, unlike many other airlines that have failed to plan adequately for the return of travel post-Covid. We kept our pilots and cabin crew current throughout the pandemic, and as a result remain able to meet pent-up customer demand.”

Ryanair’s fuel hedge locked in a price around $65 a barrel for 80% of its needs until the first quarter of 2023. This not only sets it apart from its peers, it also presents an opportunity.

Liberum’s Khoo wrote: “Counterintuitively, higher fuel prices may cause Ryanair to add more capacity to exploit its strong fuel-hedging position...and anticipated capacity cuts by competitors.”

Ryanair also has a strong balance sheet, and in a high-interest-rate environment where other airlines are heavily leveraged, it doesn’t need to refinance forthcoming bond maturities because it has sufficient liquidity, Khoo said.

Hawks with ties to the security apparatus carry more weight than liberal critics of the war on Ukraine

Russia’s military reverses in Ukraine are stirring rage and frustration among hawkish nationalists at home. Does the hardliners’ discontent represent a serious threat to Vladimir Putin’s regime?

First, some housekeeping. I am away next week so the Saturday edition of Europe Express will be written by my colleague and FT Brussels bureau chief Sam Fleming. You can reach me at tony.barber@ft.com. Following the Italian elections, the FT will host a virtual briefing for subscribers on September 27 to discuss what is next for the nation and Europe. Register for free today and submit your questions in advance for the panelists.

In western societies, there’s an understandable tendency to focus on Putin’s liberal antiwar critics. For sure, we can only respect their bravery.

Here are some examples:

Earlier this month, municipal lawmakers in Moscow and St Petersburg signed a petition calling for Putin’s resignation. The authorities are poised to shut down the St Petersburg district council where opposition surfaced.

Lev Karmanov, a Moscow voter, was arrested for painting a dove with the words “no to war!” on his ballot paper in a local election.

Polina Osetinskaya, a classical pianist, had her second concert in a week cancelled after she spoke out against the war. Liberal creative artists can expect worse to come: an ultranationalist group named Grad (“hail”) has emerged in the State Duma, or legislature, to crack down on “anti-Russian cultural activities”.

From a western point of view, the bitter truth is that liberals are a minority in Russia. Grigory Yudin, an eminent Russian political scientist, estimates that antiwar dissenters — not all of whom are liberals, anyway — account for about 20 to 25 per cent of public opinion.

Their influence is limited because “they are banned from Russian-based media and generally depressed”. For insights into the mood of Russian society, I encourage you to read Yudin’s illuminating Twitter thread in full.

By contrast, the hawks’ outrage at Russia’s retreat in north-eastern Ukraine is loud and fierce. In the view of Tatiana Stanovaya, another Russian political analyst, “the pro-war opposition could become one of the most serious challenges for the authorities since the defeat of the non-systemic [liberal] opposition”.

Nationalist attacks on Putin’s conduct of the war point to one of his main vulnerabilities — the myth, cultivated year by year after he came to power in 2000, of his almost superhuman invincibility.

They illustrate how the war is aggravating tensions in Russian society, including over support for Putin’s regime. Denis Volkov and Andrei Kolesnikov write for the Carnegie Endowment for International Peace:

All across Russia since February 24, old friends have fallen out; parents and children are no longer on speaking terms; long-married couples no longer trust each other; and teachers and students are denouncing each other.

Who are the hawks, and how big is their influence?

In the words of Alexey Kovalev, investigative editor at the Meduza news site:

[They are] a loose coalition — mostly active online — of far-right ideologues, militant extremists, veterans of the 2014 Donbas war, Wagner Group mercenaries, bloggers, war reporters running their own Telegram channels and individual Russian state media staff. Some are soldiers or mercenaries fighting in Ukraine.

Let’s be clear: the ferocity of Russia’s unprovoked invasion goes hand in hand with Putin’s intention to destroy Ukraine as an independent state in its internationally recognised borders. Doubtless it offends Ukrainians to draw a distinction between the Russian president and his inner circle, on one hand, and ultranationalist fanatics on the other.

However, Ekaterina Vinokurova, a writer for the Yarnovost website, says her contacts with the Russian authorities indicate that “there are many balanced people in the Kremlin . . . [who] treat radicals like a barking dog that should be on a leash”.

This applies to men like Igor Girkin — nom de guerre Strelkov, or “sharpshooter”. He is a Russian former intelligence operative who has never forgiven the Kremlin for cutting him loose after his role in fomenting Donbas separatism in 2014.

Girkin wanted Putin to implement the “Novorossiya” project, a vision of Russian-controlled Ukrainian territory stretching from Kharkiv to Odesa. He now berates the Kremlin for mishandling this year’s invasion.

The all-important question is the extent to which the hawks have connections and influence with the security and military officials who are, in the last resort, the people who keep Putin in power.

In an article for the Moscow Times, written a few weeks before the invasion, Mark Galeotti, a British expert on Russia’s security services, made this point:

There is . . . a strong strand of nationalist critiques of Putin that interconnects with elements of the systemic and non-systemic opposition, but also has a constituency within the security apparatus on which the Kremlin depends . ..

Scroll through their Telegram channels or some of the more recondite message boards and it soon becomes clear how strong the nationalist critique of the government can be, even within such bodies as the National Guard intended to be its bulwarks.”

In her forthcoming book Hybrid Warriors (which I shall review soon for the FT), the Russian-American author Anna Arutunyan makes a similar observation. She says key figures in the FSB intelligence agency and Russia’s wider security community were unhappy in 2014 with Putin’s reluctance to expand Russian support for the Donbas separatists.

What do you think? Are the ultranationalists a threat to Putin’s hold on power? Vote here.

Consumers are returning to a different kind of Detroit expo

Detroit opened its first auto show since the beginning of the coronavirus pandemic this week, and the subdued spectacle illustrated how automakers are changing the way they market cars and trucks.

More automakers are skipping shows and unveiling fewer products at them, with less glitz. While Jeep did unveil a plug-in hybrid version of its Grand Cherokee on Wednesday by scaling a two-story-high indoor track, 30 years ago the company drove one up the convention centre’s steps and through a plate of sheet glass.

The tab for exhibiting at a show runs into the millions, and automakers, particularly luxury brands, are choosing to tout their wares instead at the Consumer Electronics Show in Las Vegas, or the Texas state fair or via a virtual launch. Frankfurt held its last show in 2019, and the Geneva International Motor Show said it will not hold another event until next year, and then in Qatar, not Switzerland.

Yet US consumer attendance at auto shows is recovering as the pandemic ebbs, and proponents say they still represent a unique opportunity for automakers: a place where potential buyers pay to be marketed to.

“That is gold,” said Dan Bedore, an industry consultant who worked in communications for Ford and Nissan. “People would kill for that in other businesses . . . The death of the auto show is exaggerated.”

But he added, “the decline is certainly real”.

Auto shows grew out of 19th-century industrial expositions and bicycle shows. The first US show featuring all cars was staged in 1900 at New York’s Madison Square Garden.

The shows spread across the US, and today a “season” of more than 60 shows runs from October to May, punctuated with important expos in Los Angeles, New York and Detroit.

Detroit’s show vaulted into the international ranks in 1991 following a rebranding as the North American International Auto Show. Held in January, a month when many automakers released new models, the number of launches peaked in 2004 at 70, with public attendance hitting a high of 811,000 a year earlier.

Automotive executives flew in for show openings to speak at 20-minute press conferences with reporters, usually leaving before the floor opened to the public. Manufacturers competed to outdo each other with lavish exhibits, which can cost more than $10mn to design and build.

Executives began to question why they were spending so much to compete with other companies for media coverage, said Chris Stommel, president of the Michigan firm Foresight Research.

Jaguar Land Rover, Volvo and Mazda skipped the 2018 show, followed a year later by Mercedes-Benz and BMW. The companies argued that Michiganders’ loyalty to US automakers made it too hard to crack the market, Stommel said. Their absence prompted others to reconsider their participation, and “then it just started to snowball”.

Covid-19 devastated consumers’ attendance at shows and introduced nerve-racking uncertainty into the multimillion-dollar process of launching a new vehicle at one. Auto executives worried that supply chain disruptions might derail an unveiling or that an auto show might be cancelled, as happened with the 2021 New York show. At the same time, they realised online launches could still generate media coverage.

Auto shows once measured their relevance by the number of products manufacturers debuted there. In Detroit this year, there were six, down from dozens in the aughts. Automakers can only tolerate so much ambiguity “before they give up and do something else”, Bedore said.

Matt O’Mara, an executive vice-president at Texas-based Czarnowski, a firm that designs and builds automotive exhibits, said he is handling the same amount of business, but automakers, particularly luxury brands, are redirecting their spending. They want to either produce an event where they are the sole headliner, or appear at venues geared to the wealthy, like the Pebble Beach Concours d’Elegance, where a ticket costs $525.

“Every luxury automaker has the same problem: they have champagne taste and a beer budget,” he said. Since fewer people buy luxury cars, the brands command smaller marketing budgets, pushing automakers to spend dollars “in target-rich environments”.

Even though luxury car buyers are more likely to visit auto shows, Stommel said, it is the high-volume brands that most frequently attended shows held during the truncated 2021-22 season. About half of 35 auto brands appeared at 17 shows or more.

Floor space at this year’s show was dominated by General Motors’ family of brands, at 75,000 square feet altogether; Stellantis at 85,000; and Ford and its luxury brand, Lincoln, at 64,000.

Stommel’s research shows that before the pandemic, each season the US’s 56 largest auto shows drew a combined 11mn people. Thirty-five of those shows took place last season — 63 per cent of the whole — and they drew about 5.5mn people, or half of pre-pandemic attendance.

The changing nature of auto shows can be seen in GM’s unveiling of its Chevrolet Equinox. Marketed as an electric sport utility vehicle for the masses, the company launched it a week before the Detroit show. But when consumers arrive at Huntington Place, an Equinox will be parked on the carpeted floor with a product specialist nearby to explain the tech to visitors without drifting into a hard sell.

Those specialists are the corporate descendants of the 1980s “spin and grin girls”, who displayed the cars on turntables but were barred from talking about them. Many are employed by talent agency Productions Plus, helmed by president Hedy Popson. Just as the staffers’ job has changed in the last decade to emphasise product expertise over glamour — “This isn’t where pageant queens come to die” — auto shows are changing too.

Business at the agency roared back this year, Popson said, but now automakers are focused less on generating news coverage and more on educating and entertaining the public.

“Saying the auto show is dead is like saying the state fair is dead,” Popson said. “It might attract a different audience, and for different reasons, but I don’t think it will ever go away.”