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Flying high at Frankfurt's IAA

Janelle DumalaonSeptember 15, 2015

Lights, camera, cars: Glitzy new models and high-tech gadgets are coming together at the 66th IAA, the world's largest motor show. And carmakers from around the world are eager to show off what their prototypes can do.

Daimler Chairman Dieter Zetsche at the IAA
Image: picture-alliance/dpa/B. Roessler

Europe's carmakers are feeling optimistic. At least, that is definitely the impression they want to make at the Frankfurt IAA Motor Show, with glittering new models launched to bombastic beats and flashy light shows, presented by the automotive industry's highest CEOs.

They say solid performance in other key markets like Europe and the US is driving that optimism, even at a time of an impending cooldown in China, where many European carmakers like Volkswagen have invested heavily.

"Volkswagen is active globally, so we have to live with the ups and downs in different markets. There are problems in Russia and Brazil, but the US market is improving, China will remain stable," said Volkswagen Chairman Martin Winterkorn. "There's no question about it, the developments in Europe are helping us."

And Winterkorn wasn't the only one quick to say China's market woes were a temporary struggle.

"We're obviously watching what's happening in China very closely," said Ian Robertson, head of sales and marketing at the BMW Group. "But we're on the record saying we always expected the market to normalize."

China simply 'normalizing'

And single-digit growth is simply a process of that normalization, after five years of heavy growth, according to Robertson.

"Putting it into perspective, we are still selling between 35 and 40,000 cars every month," he said.

Industry analysts are also backing that up. Ahead of the IAA trade fair, US-based industry intelligence consultancy IHS slashed its 2015 Chinese light vehicle sales forecast from 4.4 percent growth year-on-year to 1.4 percent, or 23.4 million units.

But Oliver Waschilowski, a senior analyst from the consultancy, said growth would keep picking up next year and rise to nearly 7 percent in 2017.

"Potential for growth in China is still huge," said Waschilowski. "National motorization levels, or the number of cars relative to the population, is still quite low compared to that of developed Europe."

Perfect steering conditions for European car sales

Europe is difficult to catch up to these days. The European Automobile Manufacturers Association, or ACEA, said on Tuesday new car sales in the European Union grew close to 9 percent in the first eight months of 2015.

This high is being fueled by a mix of favorable steering conditions, including a high level of rebates, falling oil prices, low interest rates and rising consumption. Cars are still selling, and automakers are still unveiling new products.

There are 219 launches at this year's International Motor Show in Frankfurt, known as the IAA. That's 60 more world premieres than the last IAA in 2013. And Europe's top automakers are eager to show off the concepts they say will be available very soon.

Audi's e-tron Quattro at IAA Frankfurt
Audi has high hopes for its electro-powered concept car, the e-tron QuattroImage: picture-alliance/dpa/U. Deck

Carrying cars into the future

Audi is betting on its electro-powered concept car - the e-tron Quattro, which charges in less than 50 minutes and is able to last for 500 kilometers, according to its makers. And it accelerates from zero to 100 kilometers in 4.6 seconds, they added. The model, available starting 2018, is supposed to give e-car pioneer Tesla a run for its money.

"The e-tron Quattro is the benchmark for future automotive technologies," said Audi's R&D chief Ulrich Hackenberg.

The fact that Tesla may have gotten there first bothers him little. Hackenberg pointed out that Thomas Edison "may not have been the first" to dream of the light bulb, but he was the one who managed to get a brighter, more efficient one patented.

Not to be outdone, Mercedes-Benz presented its "Concept IAA," or intelligent aerodynamic automobile. Once the car reaches a speed of 80 kilometers per hour, eight segments extend from the rear, forming a sort of aerodynamic tail.

Blasts from the past

Car manufacturers say that's the future. But the IAA is seeing some blasts from the past, as some automakers who have lost relevance in past years make a comeback.

Returning to the Frankfurt Motor Show after a 54-year absence is German carmaker Borgward. Few can remember, but the carmaker was among the largest in the country before going bankrupt in 1963. It's even managed to catch up with the times. The new BX7, as the model is called, can be ordered with a touch screen and is complete with Wi-Fi and adaptive cruise control.

Borgward Isabella
Isabella was Borgward's most famous model back in the old daysImage: Getty Images/Harold Cunningham

However, the car - the product of a partnership with Chinese carmaker Foton - is initially only going to be rolled out in China and other emerging markets. The car may have come back to the Frankfurt Motor Show, but its return to the European market might be longer in coming - a launch in Europe isn't targeted until 2017.

Not so for General Motors' Opel, which is already punching its way out of the woods, after nearly a decade and half of losing market share.

Opel unveiled a redesigned, 200 kilogram-lighter version of its flagship model Astra, with an ad featuring the car flying over parked premium vehicles, including a Mercedes and an Audi.

It's supposed to poke fun at the brands favored by upper-crust buyers - and perhaps itself - for being a popular choice for the average Joes in Europe – although it lost even them for quite a while.

But market share started growing again in 2014, and sales were up 4 percent in the first eight months of this year.

"We want to be successful in Europe and rise to number two again," said Opel CEO Karl-Thomas Neumann. "We're back."

And even General Motors has signaled full support of its subsidiary. GM CEO Mary Barra made her first appearance at a major European car show for the launch of the new Opel Astra. The show of support is a far cry from just a few years ago, when GM entertained the idea of selling the struggling German auto company. Now GM is counting on Opel's growth.

"The Astra will play a significant role in Opel's success, and Opel is vital to GM," Barra said. "Between 2016 to 2020, we want to launch 29 new vehicles."