Geneva Motor Show Hopes to Rev Up Car Industry

The Geneva Motor Show is traditionally considered both the start of the auto industry's year and an omen of how the season will go. Insiders agree that neither pessimism nor exuberance is apparent amongst German carmakers as the car show gets rolling on March 4.

"With the temperatures here in Geneva today, you still have your mind on hibernation. I just hope that doesn't apply to the economy too. Perhaps there is stimulus on the market, though I don't think it will be a big bang," Volkswagen chief Bernd Pischetsrieder said.

On the defensive

Volkswagen, in particular, will be under close scrutiny in Geneva where it will show new models in each of its six brands, from Skoda to Bentley. The firm is hoping to impress with a new VW convertible coupe, the "Polo Fun," and the luxury limousine "Phaeton." The car manufacturer announced extensive cost cutting measures Friday in response to weak sales and a sharp drop in profits in 2003. Pischetsrieder dispelled rumors Tuesday that factories were due to be closed and denied that his own position was in jeopardy.

VW aimed to sell 600,000 Golfs in 2004, Pischetsrieder announced, despite initial sluggishness since the new model's introduction. "Whether we manage that we will see at the end of the year," he said. Volkswagen plans to increase sales from 5 million to 5.5 million vehicles. "Selling more cars is easy; earning money with it is the difficult question," Pischentsrieder commented.

VW subsidiary Audi hopes to increase its sales with the new A6.

The atmosphere is reserved at DaimlerChrysler too. Mercedes saw its sales drop slightly in February compared to the previous year. Boss Jürgen Hubbert doesn't expect an increase until the second half of 2004, thanks to the introduction of new models. Both the new luxury CLS-class coupe and the SLK roadster will be on show in Geneva.

Confidence at BMW, Opel

After a poor showing in January, BMW saw a 4 percent increase in sales in February, selling 77,000 vehicles. BMW is perhaps the most optimistic German car manufacturer at the Motor Show, where the firm is introducing its 5 series Touring station wagon, its M5 sports car series and a convertible Mini.

"The expansion of our product line isn't an end in itself," chairman Helmut Panke explained. New models must fit the BMW brand and increase the company's profitability, he said.

Opel, one of VW's toughest competitors, is showing the new Astra, which is significantly cheaper than the Golf, as well as its convertible Tigra Top twin, a sporty two-seater. Opel heralds the beginning of a battle with Smart by introducing its new "TRIXX" ultra-compact car.

But the introduction of new models in Geneva can't cover up the fact that the world economy remains in a slump. "A cloud of insecurity hangs over this salon," German Association of the Automotive Industry (VDA) president Bernd Gottschalk lamented.

The 74th annual Motor Show runs from March 4-14.