Paris auto show launches Thursday
Self-driving vehicles and smartphone integration will be among the top features at Europe’s biggest auto show this year, as executives focus on something that’s become increasingly hard to come by: buyers.
The nascent recovery in the region’s car market is already running out of steam after sales contracted for six straight years to a two-decade low in 2013. That puts pressure on carmakers at the Paris Motor Show, which kicks off Thursday, to showcase new technology and gimmicks like an even more powerful version of the ultra-luxury Bentley Mulsanne sedan and running lights shaped like Thor’s Hammer on the new Volvo XC90 sport utility vehicle. With the European economy struggling, the efforts may not pay off.
“The outlook for Europe on the whole is darkening,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. The slowing growth and prospects for renewed declines in the second half “make me wonder if European car demand will manage to be positive for the year as a whole.”
Sales in the region grew 1.8 percent in August, the smallest hike this year. Fourth quarter deliveries are forecast to decline 0.3 percent, IHS Automotive estimates. Europe’s slowing recovery comes after the market tumbled 23 percent from the 2007 peak to 12.3 million vehicles last year.
“The question is if the pre-crisis level will ever be reached again,” Martin Winterkorn, chief executive officer of Volkswagen AG, the region’s biggest automaker, said in a Sept. 25 interview with German broadcaster N-TV.
To kick-start demand, manufacturers are turning to gadgetry like vehicles that drive themselves and smartphone integration to win over consumers weary of being cut off from the rest of the world while behind the wheel. The advances are part of the response after the industrywide contraction left most mass- market carmakers unprofitable in the region, according to Max Warburton, an analyst with Sanford C. Bernstein.
Ford Motor Co., which posted its first profit in Europe in three years in the second quarter thanks to waived bonuses, is reacting to the disappointing pace of recovery by reducing production of the Fiesta subcompact in Germany the rest of the year.
Along with high youth unemployment, auto demand has been held back by a sputtering euro-area economy that prompted the European Central Bank to lower interest rates and announce other monetary stimulus measures in early September. That’s led manufacturers to woo consumers with new features.
Daimler AG’s Mercedes-Benz is rolling out an optional Stop&Go Pilot on models like the C-Class sedan. The feature enables the car to steer itself while matching the speed of the vehicle in front of it, including coming to a complete stop. Volkswagen’s luxury Audi brand plans to roll out similar technology soon.
In Paris, Mercedes will show an upgraded version of the B-Class hatchback, which automatically avoids collisions, as well as a 100,000-euro ($127,000) Mercedes GT sports car that will vie for buyers of models like the Porsche 911.