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Business

Carmakers Pin US Hopes on New Models

As the North American International Auto Show gets underway in Detroit this week, German carmakers are hoping new models will increase their market share in America despite the strong euro.

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Audi's Allroad Quattro with a new Diesel V8 motor

The largest US auto show opened Sunday, against a backdrop of an American market that is still sputtering despite overall growth in 2004 for the first time in four years. The weak dollar may be making European cars more expensive, but German firms still want to claim at least 10 percent of the all-important US market.

"German automakers have the potential to expand in the world's biggest market," Bernd Gottschalk, president of the German VDA auto industry group, told the German press agency DPA. "We believe we can crack the one-million mark in the coming years."

The Germans last year sold only 883,000 cars in the United States, three percent less than in 2003. To counter the trend, DaimlerChrysler, Volkswagen and other manufacturers will introduce a slew of new models in Detroit. Overall, 65 new car models will make their debut at the show.

The Volkswagen Group will present the new Jetta and Audi's A6 wagon, while BMW will show off its 5 series touring model and M5 sedan. Not to be left out, Mercedes has new versions of the B, M and R-Class and GM's German unit Opel will unveil a hybrid study model based on the Astra.

Competing for attention

Dodge Charger von DaimlerChrysler - Auto Show Detroit

A 2006 Dodge Charger

But the competition for attention will be fierce. Some 60 exhibitors are looking to make a splash with concept sportscars, new trucks and sports utility vehicles and a number of new hybrid gasoline-electric vehicles. American and Asian automakers will dominate the headlines with highlights including Ford's convertible Mustang, the Dodge Charger and Honda's first pickup truck.

Jeep von Chrysler - Auto Show Detroit

The Jeep Gladiator concept vehicle

From German-controlled Chrysler, on tap will be the Jeep Gladiator, described as a "flexible utility truck," featuring an open-air canvas top, an expandable truck bed and a stow-away rear-seat cushion. A high powered sportscar called Firepower will also be unveiled.

DaimlerChrysler said Sunday it also sees "potential" for its quirky, tiny Smart cars in the United States, as it presented the vehicle at the Detroit auto show. The company said the US may take a cue from Canada, which has been selling the Smart car and a variant known as the Smart "Fortwo."

"Following the very successful start in Canada, we see potential for Smart in the US, too," said Eckhard Cordes, board member of DaimlerChrysler from the Mercedes Car Group. "Smart has become a strong and important brand of the Mercedes Car Group," Cordes added.

Präsentation des Smart auf der IAA 1997

Smart City Coupe

Originally developed as a joint venture between the Swiss watch company Swatch and Mercedes-Benz, the brand is now a 100 percent-owned subsidiary of DaimlerChrysler and part of the Mercedes car group, but has been losing money and only the past week, rumors were circulating about a possible end to the ultra-small car.

Euro pressure on exports

Although German exports to the US totaled €22 billion ($28.8 billion) in 2004, Gottschalk from the VDA said the continuing weakness of the US dollar was of great concern to European carmakers. He said the industry was counting on support from Berlin, since there could be political motivation in keeping the greenback from rebounding.

"The current exchange course developments between the euro and dollar have nothing to do with the actual conditions regarding both economies," said Gottschalk.

He said the strong euro would compel the German auto industry to consider moving production to North America at some point. But VW CEO Bernd Pischetsrieder has ruled out building a new plant in the region for the next decade.

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