Global Insight Perspective | |
Significance | Manufacturers present in the European marketplace are preparing to launch an array of new models and concept vehicles in an attempt to fuel growth amid stiff competition. Surprisingly PSA and Renault will have a rather "platonic" presence at their home motor show, with a strong display of innovative concepts but little novelty to present. |
Implications | With Renault and PSA's current corporate and strategic affairs more likely to grab attention than a robust new model offering, other leading carmakers will rise to the challenge with a number of new models and take the opportunity to underscore their environmental credentials by presenting an array of environmentally friendly vehicles and technologies, but without omitting to present a complete range of large and fuel-thirsty sports-utility vehicles (SUVs). |
Outlook | Although an array of new and refreshed models are being presented, much of the interest is going to new concepts, which give a glimpse of future shapes and trends but new powertrain technology will also be unveiled with the objective of raising consumers' environmental awareness. |
The Paris Motor Show opens its doors on Thursday (28 September) with a press review and although much of the attention will be attracted by innovative concept vehicles and environmentally friendly technologies, domestic carmakers PSA Peugeot-Citroën and Renault will certainly seize the occasion to disperse concerns about their current performance, but will have a rather "platonic" presence at their home motor show, with a strong display of innovative concepts but little novelty to present. In the background, other leading carmakers will also rise to the challenge with a number of new models and take the opportunity to underscore their environmental credentials by presenting an array of environmentally friendly vehicles and technologies, but without omitting to present a complete range of large and fuel-thirsty sports-utility vehicles (SUVs). Allegedly the oldest Motor Show in the world (first held in 1898), the 2006 incarnation of the Mondiale de l'Automobile will host no less than 282 brands from 24 countries, and welcome for the first time brands such as Dacia, Dodge, Landwing and Great Wall.
Citroën, Peugeot and Renault to take Centre Stage
In a context of declining sales in Europe and at home, falling profits, an ageing model line and a chief executive on the way out, PSA Peugeot-Citroën is surrounded by uncertainty, which should be dispelled by the details of a company-wide recovery plan, but will strive to redirect attention to its model range and styling capabilities.
Against all expectations Jean-Martin Folz announced deep restructuring measures to reverse a three-year profit fall. This includes shedding 10,000 jobs in Europe, cutting capital spending, streamlining product line and accelerating new model launches but also eliminating management bonuses this year and lower profit-related pay for workers. Overall the carmaker aims to save 500 million euro by cutting capital spending, 125 million euro form the elimination of bonus and profit schemes, more savings will be realised by reducing R&D expenditures by 15%. Job cuts will be achieved by freezing recruitment and the ending of temporary contracts.
Citroën will showcase the new C4 Picasso alongside a rally version of the C4 and the C-Métisse four-door coupé concept (see France: 7 September 2006: Paris Motor Show 2006: Citroën to Present Innovative C-Métisse Concept) powered by a revolutionary diesel-hybrid engine. For its part, Peugeot will present the 207 Epure, a coupé-cabriolet (CC) version of the new 207, and the powerful 908 RC concept equipped with a V12 HDi engine.
Renault, which is going through a drought in terms of new models and is equally challenged in the western European market, will have little novelty to present but the carmaker will undoubtedly divert attention with its aggressive development strategy plans, which call for a rapid succession of new and replacement models being launched between 2007 and 2009, and ongoing alliance discussions with General Motors (GM). Nevertheless, in Paris, Renault is expected to present three prototypes: the next Twingo concept, the sensational four-seat premium cabriolet Nepta (see France: 8 September 2006: Paris Motor Show 2006: Renault to Present Luxury Cabriolet Concept) and the Z45 SUV developed by its South Korean affiliate Renault Samsung Motors. Renault's weak point in its model cycle will at least have the benefit of giving more exposure to its Romanian division Dacia, which will present a station wagon version of the infamous Logan. Renault's Japanese partner, Nissan, which is also eager to improve its fortunes in Europe, will come with the new Qashqai.
But with about 65 world debuts, this year's Paris Motor Show will also welcome important new models from Volkswagen (VW), Alfa Romeo, Honda, Fiat, Mini, Nissan, Skoda, Audi, Suzuki, Mitsubishi, Ford and Hyundai among a host of others. VW will provide a hint of the upcoming new Scirocco by presenting its new Iroc concept and also take the wraps off its restyled Touareg SUV. Honda is taking the opportunity to unveil the all-new CR-V four-wheel-drive model and Civic Type R while Alfa Romeo will come with an impressive high performance coupé, which is currently known as the Alfa 8C. Fiat will try to persuade the sceptics that it can maintain the current sales momentum it enjoys in Europe with the sporty Fiat Panda Sport. Skoda will show a new off-road version of the Octavia, and an interesting three-door concept called the Joyster. Mini is showing its revamped three-door model, and may even showcase the all-new five-door version.
Mercedes will make a demonstration of force with the splendid CL 63 AMG, which is the upscale version of the new CL-Class coupé, and the ultra-high-performance SLR McLaren 722 Edition supercar. Audi will also present a supercar with the new R8 while Aston Martin will reveal the V8 Vantage. Finally, Toyota will present two key models, the replacement Corolla, which is rumoured to be changing its name to become the Auris, and the fourth generation Lexus LS.
Outlook and Implications
A year ago, the Frankfurt Motor Show opened in a context of high oil prices and closed after most leading manufacturers apart from the French ones confirmed that they were ready to embrace petrol (gasoline)-hybrid technology and a number of partnerships were announced. In the past year few things have changed, at least nothing positive has emerged; oil prices have not declined but rather have fluctuated at record levels. Rising raw material costs are adding pressure on manufacturers and competition is intensifying while regulatory pressures are becoming more apparent. This has pushed a number of leading carmakers such as GM, Ford, VW, DaimlerChrysler (DCX) and now the PSA Group to take drastic measures to safeguard their survival while bringing the likes of Renault and Fiat to make a profound reassessment of their strategies.
However, what has changed is that most European companies have been forced to take into consideration new market dynamics created by record fuel prices and greater environmental concerns. As a result, European carmakers continue to show little interest in classic hybrids where Toyota has taken a solid lead but are continuing to push for new diesel technology, even in the form of diesel-hybrids, new direct injection petrol engines and biofuels, in the race to reduce both CO2 emission and fuel consumption. However, new models and concepts presented in Paris will offer a mixed bag, reflecting the increasing pressure felt in the global auto industry, as segments and brands fragment further and successes and failures become harder to predict.
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