FRANKFURT, Germany - While European political leaders have declared an official end to the continent’s recession, car companies heading to September’s Frankfurt Auto Show know they have a lot of work to do before they start breaking even in a very challenging part of the globe.
“Europe will continue to be in negative territory this year,” says Jeff Schuster, an analyst with LMC Automotive. “We have it down about three percent.”
So the 2013 Frankfurt Auto Show could have a feel very similar to 2010 and 2011 auto shows here in the U.S., when auto companies worked to show the world that new product is coming.
Japanese luxury brand Infiniti is trying to get a foothold in the European market, and it will have a unique crossover at the Frankfurt show. Land Rover, meanwhile will be showing a couple of hybrids that use diesel fuel — an attempt to combine two fuel-efficient technologies. Diesel vehicles make up more than half of the car sales in Europe.
The local German brands always have a big presence in Frankfurt. Each company generally has its own convention hall at the large Frankfurt Messe, which is nearly a dozen convention buildings connected by a moving walkway.
Audi will show a new A-8 flagship vehicle, which is aimed at competing head to head with Mercedes new S-Class.
General Motor’s Cadillac brand is also expected to have a large presence in Frankfurt, as the company works to show European buyers that it can compete with the high-end German brands.
But Chevy should draw interest as well, with the latest version of the Camaro. This comes as Ford has already said that it’s going to bring the Mustang to Europe.
GM CEO Dan Akerson recently told the Detroit News that he’s starting to see some improvement in the European market.
The view from Auburn Hills is a little different, as Chrysler continues to outperform Fiat. CEO Sergio Marchionne remains in an ongoing battle with Italian labor unions over cuts at facilities, and where new investments may come.
While Chrysler’s brands aren’t expected to show anything new in Frankfurt, Fiat should have a strong presence, especially with performance brands like Maserati and Ferrari.
Frankfurt will also feature a number of electric vehicles. While EV’s get a lot of attention in both the U.S. and Europe, they are expected to remain a niche of the market until a number of issues can be dealt with, including range and cost.
The Frankfurt show comes as Ford and General Motors have stated goals of breaking even by mid-decade. And, with a depressed market, the only way to sell a car without deep discounts is to have something new and appealing.
“Any market that lost 6 million out of a base of 18 million is a very competitive market,” said Ford of Europe CEO Stephen Odell, at a July roundtable with reporters. “One of the benefits of having fresher product…is the ability to not have to go to the bottom drawer of discounting.”
Ford will show off a concept of what its next generation S-Max European crossover will look like, and promises a few other surprises.
Odell says Ford learned a number of lessons from its North American turnaround, and will work to apply them in Europe. That includes the importance of new products.
“A lot of people are saying that Europe’s going through the same thing the U.S. went through in 2008. The truth is Europe went through it then as well. It just didn’t get out of it.”
Odell is expected to use the Frankfurt show to give another update on Ford’s European turnaround efforts. But, at his July briefing, he warned that nothing is going to come easy.
“The one issue that, I think, will hold a fast recovery back is just the size of the unemployment,” Odell said. “Twelve-point-two percent in the Eurozone, 35 percent in Spain, and 50 percent youth unemployment in Spain is probably a ticking time bomb.”
WWJ AutoBeat Reporter Jeff Gilbert will be covering the Frankfurt Auto Show the week of Sept. 8. Listen for his reports on air, with even more coverage at CBSDetroit.com.