Geneva Motor Show

Carmakers attending the 81st International Motor Show in Geneva appear to have put the financial crisis behind them. Some 260 exhibitors are showing 700 brands from over 30 countries, filling the seven exhibition halls to capacity.

"Unfortunately, we even had to turn down some exhibitors' requests for more space," said the show's general director, Rudolf Studer. He added that more space will be available for the show in 2013, when construction of a new exhibition hall is complete.

Car manufacturers are brimming with optimism as sales approach pre-crisis levels. Only last week, Volkswagen announced record earnings for 2010. Even the United States' hard-hit auto industry has recovered from the financial crisis.

The chief executive of Bavarian carmaker BMW, Norbert Reithofer, said he is worried solely about the Western European market: "Germany and Northern Europe are doing fine. But for countries like Italy and Spain, it will be a while before they return to the level of productivity they achieved in 2007."

Asia flourishes

China and India are making their presence felt in Geneva this year. Several new Asian manufacturers are showing off their wares, as are a number of traditional European brands that have been bought by overseas competitors.

Swedish passenger vehicle-maker Volvo now belongs to Chinese producer Geely, while British brands Jaguar and Land Rover have become a part of Indian car giant Tata.

The cross-ownership trend is a two-way street, however. Volkswagen wanted a part in Suzuki's success in the Indian market for smaller passenger cars and promptly bought a 20 percent share in the Japanese company.

Electric issue

China is making rapid progress in the development of electric cars, thanks to heavy subsidies from the Chinese government. Altogether, over 40 new models of electric and hybrid cars will be introduced at the Geneva Motor Show.

Germany, on the other hand, is reacting slowly to the new trends in the field of electric mobility. Only 1,000 new electric cars were registered there in 2010. The German Automobile Industry Association (VDA) has admitted it is in no hurry to speed up the process.

Rash decision-making might see 125 years of German engineering expertise go to waste, the VDA worries. Not only would a higher production of electric cars strike a heavy blow to existing car factories. The components industry, which includes suppliers like Bosch and Mahle, would also suffer if demand for their parts was reduced significantly.

Oil price dampens optimism

The downside to a heavy reliance on fossil fuel-powered cars is the rising oil price. The weeks leading up to the Geneva Motor Show saw price levels reach a 30-month high of well above $100 a barrel.

Rupert Stadler, CEO of German carmaker Audi, said he is not concerned that the oil price could slow the industry's recovery: "We have made a lot of progress in making our cars more fuel-efficient. The customers will appreciate that."

Author: Pascal Lechler, Klaus Ulrich / anr
Editor: Sam Edmonds