Geneva Motor Show hits the road amid optimism | Business| Economy and finance news from a German perspective | DW | 07.03.2017
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Geneva Motor Show hits the road amid optimism

The world's major carmakers are cautiously upbeat about the industry's prospects for 2017, despite facing fundamental change from tighter emissions rules, electric vehicles and autonomous driving.

When the 87th Geneva International Motor Show opened its doors to experts and the media on Tuesday, the automotive industry celebrated Europe's return to growth in car sales, with levels last seen in 2008.

Despite a wave of political uncertainty and the persistent shadow of the 2015 emissions scandal of German auto giant Volkswagen (VW), executives were largely upbeat about the prospects for this year and 2018.

"What we see in 2017 is a market which is more stable, with slight growth, it's a situation which suits us just fine," Peugeot SA chief executive Carlos Tavares told the news agency AFP a day after signing a deal to buy General Motor's (GM's) European business, Opel-Vauxhall.

The acquisition sees the French carmaker resuming its position as Europe's largest carmaker after Volkswagen, and making PSA more capable to "absorb any fluctuations in the market," Tavares said, adding however that he didn't see any at the moment.

Deutschland Berlin - Opel Vernissage mit Crossland-X (picture-alliance/Geisler-Fotopress/S. Schraps)

GM and PSA have developed common vehicle platforms for years. The Opel Crossland X and the Citroen C-Aircross concept SUV on show in Geneva are a sign of the new projects and synergies they hope to achieve as one company.

The same opinion was expressed by Jürgen Stackmann, head of VW brand sales. "We are expecting a stable European market this year, in all likelihood with regional challenges," he said, with a reference to the uncertainty over Britain's vote to leave the EU.

But Toyota's European president and CEO Johan van Zyl took a more sober outlook. "We are facing many factors of uncertainty on the European market... which are going to have a negative effect," he predicted.

Figures released by the European Automobile Manufacturers' Association (ACEA) seem to bear him out as they suggest growth in the sector will be almost flat at just one percent in 2017 - a far cry from the 6.8 percent increase in 2016.

Peugeot 3008 (Getty Images/AFP/A. Grosclaude)

And there was more good news for PSA in Geneva after its Peugeot brand won European car of the year for its 3008 urban 4x4

Efficiency squeeze

But a dark cloud is gathering over the outlook due to ever-tighter European emissions rules in the wake of VW's dieselgate scandal.

Volkswagen admitted in 2015 to having installed software in 11 million diesel engines worldwide to circumvent emissions tests. Dieselgate has turbo-charged regulators' eagerness to crack down on pollution. Carmakers now have to steer toward engines that emit no more than 95 grams of CO2 per kilometer by 2021 to meet European requirements, compared to 130 grams in 2015.

"Solutions are more and more expensive," said Marc Charlet, at Mov'eo, an automotive and mobility research network. "There is much at stake here, and the competition is fierce," he told AFP.

Automakers failing to meet the CO2 targets - capping petrol consumption to 4.1 liters per 100 kilometers and diesel to 3.6 liters - will have to pay 95 euros ($100) for every extra CO2 gram emitted by each car, which might add up to tens of millions of euros of fines.

Porsche 911 GTS Cabriolet 2017

In Geneva, German sports car maker Porsche announced it may offer an all-electric version of its Macan compact SUV and could turn the iconic 911 into a hybrid amid a push by parent company Volkswagen to move on from dieselgate.

Luxury and CUVs in the focus

Despite the greater emphasis on fuel economy, the Geneva Motor Show won't disappoint in terms of its usual glitz and glamour. The legendary Ferrari, Lamborghini, Pagani, McLaren and Bentley have all picked Lake Geneva's shores to present new models.

"Geneva has always been the show of beautiful automobiles and prestigious racing cars," said Ferdinand Dudenhoeffer of the Germany-based CAR institute.

But the greatest buzz is expected to come from so-called "crossover" vehicles (CUVs), which combine features taken from sports utility vehicles (SUVs) with those of passenger cars.

The segment, including fashionable urban four-wheel drive vehicles, now makes up nearly 30 percent of the European car market and features the Volvo XC60, the Citroen C-Aircross, the DS7 Crossback and the Land Rover Velar.

Some 180 companies will be present at the 10-day show which opens to the general public on March 9. Last year's show attracted 687,000 visitors.

Genfer Autosalon - VW Konzernabend (picture alliance/dpa/U. Deck)

Volkswagen has unveiled its first prototype autonomous car, the electric Sedric, saying it planned to invest billions of dollars in self-driving vehicles

uhe/kd (Reuters, AFP)


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