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Geneva show: Tracking out of crisis?

2014-03-03 09:33
GENEVA, Switzerland - The 2014 Geneva auto show will open to the public on March 6 (to the news media on March 4) on an optimistic note as the surrounding European vehicle market appears to have at last accelerated out of the slow lane.

Sports cars, high-end SUV's and city cars will be bumper-to-bumper at the show - one of the auto industry's biggest and most diverse events - as it cruises out from under the long shadow of crisis which, automakers and analysts alike say, is now in the rear-view mirror.

Juergen Pieper, a car industry analyst with German bank Metzler, told AFP: "The mood should be good."


New vehicle registrations in the European Union slipped only 1.7% in 2013 to 11.8-million after five years of far more brutal falls but, according to  German auto industry analyst Stefan Bratzel, sales are finally expected to pick up through 2014.

Similar is also happening in South Africa but by how much Europe (and by association South Africa) recovers remains to be seen: the most cautious observers expect sales to remain flat while the most optimistic are gearing up for three-percent market growth. American observers, however, are seeing the approach of a plateau in vehicles sales according to the Detroit News.

EY analyst Jean-Francois Belorgey said: "The markets fell really low, so will have to start picking up at some point." He added, however, that northern Europe was doing better than the south - which includes Italy and Greece. France also remained a dark spot on the European sales map, seeing car sales in 2013 fall to the fewest in 15 years with little prospect of growth. Italy also touched rock-bottom with only 1.3-million cars.

Belorgey acknowledged: "The economic fundamentals in France and Italy remain fragile."

Despite the expected upturn through 2014, credit insurance and analysis group Euler Hermes, pointing to recent factory closings at PSA, Opel and Ford, said Europe's mid-range automakers remained plagued by over-capacity and questionable profitability.

German brands which sell heavily in North America and Asia where sales - especially at the high end - are up and doing quite well. Their international presence - which includes South Africa - allows them to ride the European slump; their plants are running at full speed. That is also good news for the production lines in South Africa.

Volkswagen raked in a net profit equivalent to about R135bn in 2013 while Daimler, which owns Mercedes-Benz and Smart, among other brands, posted a record net profit equivalent to about R82bn. And German automakers are aiming for even better traction with a range of new products, including VW's-'s third generation Audi TT and a new BMW compact.

France's Renault and Italy's Fiat have seen far more modest profits, while PSA Peugeot Citroen suffered a R34.5bn loss in 2013, although it hopes a cash injection from the French state and China's Dongfeng will put it on the road to recovery.

Despite continued hardship, French automakers should play a more central role at this year's Geneva show, where smaller city cars are expected to get more attention than in earlier years. Pieper said, listing for instance Renault's launch of a new Twingo, which will face off against the Citroen C1 and Peugeot 108: "They are presenting a number of important new products."

Such small, punchy, city vehicles will as always have to battle for attention with exceptional luxury cars at this the 84th Geneva show. While it will not feature 2013's overwhelming display of extravagant machines priced above a million dollars (R11-million) mark, there will still be plenty to see for car enthusiasts.

Ferrari's new version of its California T sport car and Lamborghini's new Huracan, each priced at around R2.98-milliion, will likely draw crowds, but perhaps the most popular attraction at this year's show, open to the public from March 6-16, will be something in between: super-trendy SUV's and crossovers.

Porsche, once known only as a sports-car maker, will for instance speed into the mid-size SUV range with its new Macan in the hope it will prove as popular as its big sister Cayenne, which accounts for more than half of the brand's sales.

Ford, meanwhile, revving up to unveil a third installment of its hugely popular Focus, claimed to be the world's most-sold model.

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