Bullish automakers and jittery analysts
European manufacturers go big on electric cars even though demand low
FRANKFURT, GERMANY— It’s the start of the auto show season and all eyes were on Frankfurt this week to see how the world’s automakers plan to weather the coming year.
This is supposed to be a time of economic recovery and, as a result, more than 200 different vehicles were unveiled during the Frankfurt International Auto Show’s media preview days.
Most are destined for the European market, where the economy is rebounding in many of the EU’s member countries, just as it is in the United States. European sales have increased in the past 23 months and were up more than 8 per cent in the first half of this year.
Luxury and premium vehicles are in high demand and every maker is betting big on electrification and connectivity.
But — and this is a very big but — other essential regions of the global market are cutting right back, and this was not expected.
China accounts for 30 per cent of worldwide sales, but its economy is faltering and ostentatious vehicles are out of favour in a time of corruption scandals.
The Russian market is struggling, and its car sales are expected to drop by more than a third this year. Brazil is also in trouble, with car sales down 20 per cent from last year.
The United States’ recovery is far from certain, and if interest rates rise, sales will inevitably fall.
All this comes after carmakers ramped up production in new plants around the world.
The question is whether enough people will be able to buy them.
Publicly, automakers are bullish but industry watchers are still nervous.
“For Nissan, there will be no scaling back of production, but any additional capacity will have to be weighed carefully,” said Carlos Ghosn, head of Renault Nissan.
“I think there’s a kind of overshoot on the Chinese market. People are probably too worried about what’s going on. Even with a 5-per-cent growth in China, which would be very reduced compared to what we’ve seen in the past, still that’s an additional one million (vehicles) a year.
“There is no doubt in our opinion that growth will continue, but at what level will that growth rate be?”
The show did not start well. There was a scary moment at the beginning of the preview Tuesday when the new head of BMW collapsed on stage just after starting the German manufacturer’s press conference, the first of the show.
Harald Krueger then had to be helped to walk offstage.
The flashy introduction of the X1 SUV was cancelled and 49-year-old Krueger flew home to Munich. BMW later stated his health was stable and he’s recovering well.
His collapse was blamed on an intensive work and travel schedule.
It was a foreboding beginning to the show, but the other makers did their best to shrug it off and continue as scheduled.
The international auto show in Frankfurt alternates with Paris, while Geneva wraps up the show season every spring.
The European shows dwarf those in North America: while Detroit and Toronto boast about having 1,000 vehicles, Frankfurt has more than1,000 exhibitors, spread among a dozen
“Demand (for electric vehicles) around the world is still weak.” THOMAS WEBER MERCEDES-BENZ
large halls connected by public transit.
This year, more vehicles than ever include some form of electrification, whether or not drivers want to buy them. “Demand (for electric vehicles) around the world is still weak,” said Thomas Weber, the head of research and development for Mercedes-Benz cars.
“Even Tesla, on a global scale, is low numbers. Something has to be optimized.
“Range is a limitation, and there are infrastructure problems, especially in crowded areas. In Paris and Beijing, there is no parking (for charging the car). But our strategy is still in going electric.”
Fuel economy and emissions control are still a priority for international governments. Mercedes is going big on plug-in hybrids, which don’t rely on a home charge to go places, and it expects to double its available models to 10 by 2017.
Other makers of all-electric cars are chasing the benchmarks of a 500kilometre range and recharging times of half an hour. Battery capacity and technology is constantly improving; those targets don’t seem so impossible now as they did just a few years ago.
What car buyers really want these days, however, is seamless connectivity with their phones and friends. Audi calls its vehicles “rolling mobile devices” and says the car of the future will be “a powerful, digital, mobile device.”
After all, new buyers in the congested cities of Europe and Asia are not so concerned about handling and horsepower that can rarely be experienced on crowded roads. They want a vehicle that doesn’t interrupt them from their busy lives — something that welcomes them into a comfortable environment while immediately detecting their phones and keeping them in touch with modern distractions.
This means cars must be even safer, for people who don’t really want to think about driving. These cars must detect the road and other vehicles and must take over as many tasks as possible.
There’s no Google car or Apple vehicle at the Frankfurt show, but the California companies will surely be the talk of the Los Angeles show in November. In the meantime, the European makers still stress the driving enjoyment of their cars — to those who’ll listen.
“In a Mercedes car, we will always have a steering wheel,” Weber said. “We believe that, in the future, sometimes you will give control to the car, maybe in boring situations, but sometimes, you will say, now it’s really fun to drive my car. The customer decides.” Freelance writer Mark Richardson is a frequent contributor to Toronto Star Wheels. His trip to the Frankfurt Auto Show was paid for by Mercedes-Benz. To reach him, write to wheels@thestar.ca and put his name in the subject line.