Carmakers Put on Brave Face at Motor Show

It’s already been a blazing display of chrome, colors and curves despite the fact that the 60th Frankfurt International Motor Show doesn’t actually throw its doors open to the public until Thursday. Before the drooling punters are allowed to come and dream amongst the 125 world premieres – including 35 new German models – the press and a ‘who’s who’ of industry bigwigs have had the opportunity to gaze admiringly on the latest models.

Alone at the preview opening on Monday, 60 all-new concept and production cars were unveiled. Those lucky enough to get a sneak peek made complimentary noises about such notable debutantes as the Audi Le Mans Quattro, the BMW 6-series, the Mercedes-Benz SLR McLaren, and the Volkswagen Concept R.

But to anyone who has followed the recent trials and tribulations of the global auto industry, all this glitz, glamour and shine could be perceived as one of the world’s most expensive brave faces ever, covering up a collective look of concern. Because many car industry observers think things are going to get worse for the sector before they get better.

"Sales are down in Europe, down in North America, and flat in Japan," one analyst told Dow Jones Newswires at the opening ceremony on Monday. "The world's three largest markets are flat, and the prospects for the next 18 months are not good."

Public opening stirs optimism

Despite the gloom surrounding the market, the Frankfurt Motor Show, the world's biggest by exhibitor numbers, is reason enough to face the future with a mere hint of optimism. Such a spectacle not only grabs the attention and the imagination of the public but also gives the manufacturers a forum to push the products they hope will jump-start their troubled sector. Over 1,000 exhibitors from 42 countries will hope to turn the event into a celebration of innovation – at least until the show’s close on September 21.

The show this year is widely regarded as a gauge of how well the market is coping with a decline brought on by the global economic slowdown, overcapacity, shrinking demand and increased competition. It is also hoped to be the start of the industry’s long-awaited recovery after a 2.6 percent fall in global sales in the first half of 2003.

“We’ve had a unprecedented price battle, one could say price war,” Daimler Chrysler board member Dieter Zetsche told Deutsche Welle. “All carmakers have felt it.”

Makers target public with volume models

While in previous years the show was dominated by niche and luxury vehicles, Frankfurt 2003 will welcome the return of the volume model as manufacturers attempt to tap into the most lucrative market: the general public. Expected to dominate the show in that respect is Germany’s Volkswagen, Europe's biggest carmaker, with its new Golf which will be shown to the public for the first time in Frankfurt this week.

VW is looking towards a significant improvement in profit and unit sales next year on the back of the Golf launch, according to the company's incoming chief financial officer, Hans Dieter Pötsch. "We will significantly increase our operating profit in 2004,'' he told reporters at the show. He also said unit sales would be noticeably higher than the five million vehicles VW expects to sell in 2003.

Other volume models likely to appeal to the majority are the latest Astra from General Motor’s Opel division and new versions of Renault's Scenic minivan.

But the show will also be important for the luxury brands, such as BMW. The Bavaria-based company is hoping that its 6-Series coupe will start repaying some of the heavy investment pumped into it this year while expectations are high that the new X3, a small version of its hot-selling X5 sports utility vehicle, will make a huge impact.