Restraint was the watchword at the Paris Car Show as auto industry leaders unveiled their latest vehicles, with worries about Russia and the wobbly European economy putting a stop to the usual hype and bluster.
Usually, the assembled CEOs at global car shows can be relied upon to outbrag each other as they claim that the good times are just around the corner, and their new motor will lead the way.
Not this time.
The trouble is that the European industry is only tentatively moving away from the Great Recession, and sales are still about 20 per cent lower than the pre-2008 economic crash. Nobody expects these levels to be reached again anytime soon, if ever. Worries that sanctions against Russia because of its actions in eastern Europe might push Europe into recession, and signs of an overall slowdown in Europe are combining to make car buyers here hesitant, again.
Volkswagen, Europe’s biggest carmaker with pretensions to be number one before the end of the decade, doesn’t seem to think the good times will ever return.
Maserati CEO Harald Wester (right) with the Ghibli Ermenegildo Zegna concept at the Paris Car Show
“Perhaps we will arrive at 13 million or 13.5 million (overall sales in Europe). But the market won’t return to (the pre-crisis level) of 15.5 million, I’m sure of it,” said VW CEO Martin Winterkorn according to Reuters.
Ford Europe chief Stephen Odell was equally reticent, saying that the momentum earlier this year suggesting a healthy rally was about to start, has lost its way. That’s not surprising considering the shock news earlier this week that Ford Europe had dumped its plan to breakeven next year, and slashed the 2020 Europe profit target of six to eight per cent down to three to five per cent. International Strategy & Investment raised its loss estimate for Ford Europe in 2014 to $1.2 billion from its previous forecast of a $487 million loss.
BMW reckons it will take more than three years to return to the good times.
The new car launches at the biennial Paris show were dominated by fuel efficient cars, with new plug-in hybrids like the Volkswagen Passat, Mercedes S class and Porsche Cayenne, and small SUVs like the Fiat 500X, Jeep Renegade, Suzuki Vitara and Honda H-RV. The small SUV sector is booming in Europe. Jaguar showed its new XE small sedan, and Mazda unveiled its latest iteration of the little MX-5 roadster, known as the Miata in the U.S.
There were plenty of supercars for the assembled crowds to lust after when the show opens to the public October 4, including the Bentley Mulsanne Speed, Ferrari 458 Speciale convertible and Lamborghini Asterion. Maserati unveiled its Ghibli Ermenegildo Zegna concept.
IHS Automotive analyst Stephanie Brinley agreed that the atmosphere at the show was a bit down beat, with some exceptions.
“The mood of the show is cautious, with flashes of optimism,” Brinley said.
“Earlier in the year, there was expectations for a better result out of Europe. Recognition that while the decline might have been arrested does not mean return will come quickly, and that markets are likely to continue to perform unevenly, is a disappointment. Concern over Russia is high, countered by the recognition that the players there have no intention of giving up, but are looking to mitigate short-term pain while making long-term decisions that include investment,” Brinley said.
The show runs through October 19, at the Porte de Versailles, Paris.
