Special Coverage
Geneva
Auto Show
GENEVA – Major auto makers at this month’s auto show understandably are pessimistic about sales volumes this year, but some new competitors see opportunity in the ongoing global economic crisis.
“I think it’s an opportunity as well,” says Eric Sipe, Infiniti’s executive vice president-global marketing and sales. “I mean, the stories that you have read say you couldn’t have picked a worst time to come into Western Europe, right? But I think it breaks the clutter a little bit.”
Nissan Motor Co. Ltd. launched its Infiniti luxury brand in Western Europe last year, and sales have helped the parent company stay even with 2007 despite a down market, he says.
“Lexus, at least in the (U.S.), is showing the possibility of having some chinks in the armor maybe. Everyone is showing chinks in the armor now, so it gives us an opportunity.”
Says Hans-Ulrich Sachs, CEO of HSO Motors Europe S.a.r.l., the German importer of China Brilliance Auto Group cars: “The crisis is a disadvantage for everybody, but there is a big chance for cars with appropriate value for the money.”
HSO has imported about 600 Brilliance BS4 sedans that are selling in Germany for about €15,990 ($20,200) and plans to begin deliveries in three other European countries this year.
GTF Innovations SAS, a French niche vehicle maker, has just started offering a €15,800 ($19,960) beach car for sale in France.
The open car, fitted with boat-quality foam seats and speakers, so it can be washed down with a hose, is “aimed at people with a secondary residence on the coast – their third or fourth vehicle,” says Cesar Theodore, cofounder of the company.
The cars are built by Heuliez Automobiles SA using Renault SA powertrains and chassis. Production capacity is just 2,000 units annually.
“We think (the economic crisis) is an opportunity,” Theordore says. “We get more help from dealers and we have better relations with suppliers than we would have if the industry was in normal times.”
In Italy, where DR Motor Co. imports cars from China’s Chery Automobile Co. Ltd. and adds European safety and comfort equipment, “the crisis is a good moment for us,” says DR Motor CEO Luca Falasca. “We are opening a market. It is a new opportunity. It is a good moment to introduce this new way to manufacture a car.”
Falasca believes his company can sell as many as 10,000 Brilliance vehicles annually, once the new models come on line.
Nor is the economic downturn discouraging auto makers and suppliers developing new technologies for electric vehicles, which are not cutting funding for their programs.
“Now is the time to push it,” says Magna Steyr’s Robert Schaffernak, who is working on lithium-ion battery technology for a Ford Focus model it is developing for 2011. “We invest a lot to be ready.”
Investment in Li-ion battery technology also is high at Smith Electric Vehicles in the U.K., says Dan Jenkins, media relations manager. Smith makes electric versions of the Ford Transit Connect commercial van in Europe and will have a U.S. version next year.
Jenkins says some European EV customers are delaying purchases this year, but in the U.S., where the “customer base will be those who want to be involved in the future, we are not seeing that same sort of push back.”
French company MCE-5 Development SA is taking a long-term view with its innovative variable compression internal combustion engine, which it doesn’t expect to see in production until 2016 or 2017.
“It is essential to have new technology for gasoline engines that are at the heart of the market,” says Vianney Rabhi, MCE-5’s founder and strategist. “It’s the moment to invest. OEs have to be ready. It takes 20 years to develop an engine.”
Among global auto makers at the show, none are pessimistic long term.
Jerome Stohl, Renault’s executive vice president-sales and marketing, introduced six new models here this year, saying the renewal of the French auto maker’s lineup “is good in a crisis. It gives people a reason to buy a car.”
Ford of Europe CEO John Fleming says his company “will reduce capacity to meet demand, offer outstanding products and conserve our cash. We can follow the market down as low as it goes, but we don’t want to do that. We will come out even stronger than when we went in.”
Guillaume Drelon, a spokesman for Chrysler LLC in France, says the auto maker’s goal in Europe “is to go through this crisis in the best position for the distribution network. We are not stopping, waiting for a decision. We go forward.”
Tata Motors Ltd., which does not yet have a significant presence outside India, expects to meet its sales goals for the tiny low-cost Nano car in India and in export markets several years from now.
Problems like crisis, competition and trade barriers are not important in the long run, says CEO Ratan Tata, expressing the optimism of someone with something to sell. “There will never be barriers to what a consumer wants” that can’t be crossed.
