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Merger talks, muscle cars to mark Paris show

2006-09-26 10:02

Michael Shields

The Paris show, with media days on Thursday and Friday, is one of the major showcases for a car industry whose mass volume manufacturers are struggling to cope with slack demand, chronic overcapacity, a vicious price war and high raw material prices.

New models - which help relieve pressure on carmakers to put heavy discounts on their products - are set to glitter in Paris, but the mood is tentative while the automotive world awaits the possible birth of an industry juggernaut.

Ghosn, the industry's brightest star who is chief executive of both France's Renault and Japan's Nissan, and GM Chief Executive Rick Wagoner will both be on hand, but not Ford's Executive Chairman Bill Ford or new CEO Alan Mulally.

GM and Ghosn have given themselves until mid-October to decide whether to join forces, and Ford is waiting in the wings should the talks collapse. Media reports suggest GM is baulking at the sweeping partnership that Ghosn has in mind.

A global alliance that includes a major U.S. carmaker would shift the industry landscape.

"If the deal goes through, the biggest impact could be on Europe," said one investment banker who follows the sector closely and who believes Europe has two carmakers too many.


Hit by US customers' sudden aversion to fuel-gulping trucks and sport utility vehicles (SUVs), GM and Ford are retrenching heavily to stop the bleeding in North America.

DaimlerChrysler's US arm Chrysler got swept off the same cliff, forcing the group last week to warn that profits would fall short of its 2006 forecast by about $1.3 billion.

Despite the clamour for fuel-efficient cars amid near-record prices at the pump, headline grabbers in Paris are mostly high-performance muscle cars such as the Peugeot 908 RC diesel race car, Alfa Romeo 8C Competizione and Audi R8 supercar.

Under pressure to cut fleets' carbon dioxide emissions or face European law forcing them to, carmakers are also showing innovative vehicles including a diesel hybrid concept from Citroen and a Peugeot 207 Epure powered by hydrogen fuel cells.

Toyota's premium arm Lexus is displaying the LS600h car, the world's first hybrid linked to a V8 engine.

Crossovers that combine characteristics of cars and SUVs are on hand from Daihatsu, Honda, Nissan and Mazda, while new SUVs arrive from Mitsubishi, Opel and Renault amid booming European demand.

South Korea's Hyundai and Kia will show models they will make in new plants in central Europe, a reminder of Asian carmakers' rising manufacturing might in Europe and their ability to penetrate the regional market.

And if the competition in Europe wasn't tough enough already, models from two Chinese entrants will be on display - a Landwind minivan and an SUV made by Jiangling Motors, and a Great Wall SUV and a pickup truck.

BMW's Mini shows off its new Mini Cooper and Cooper S cars.


Inside Wheels24

Take a virtual tour of the McLaren 570S in SA

Want to experience what it's like to be behind the wheel of a 419kW sports car? Take a virtual tour of the McLaren 570S in our interactive Snapchat video filmed in SA.

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