Gloomy forecast dulls Paris auto show
Industry executives fret about sales trend
PARIS - Auto executives agree: The industry is headed into a giant storm.
The clouds of global economic turmoil cast a pall over the opening of the Paris Motor Show yesterday - although a staged display of thunder and blue lightning provided a dramatic backdrop for the introduction of BMW AG's new 7 series.
General Motors Corp. chief operating officer Fritz Henderson said the United States hasn't seen such a slump in auto sales in two decades and predicts "chaos" if US lawmakers don't pass a $700 billion financial bailout.
Ford Motor Co.'s chief executive for Europe, John Fleming, said he is bracing for a difficult end to 2008 as declining housing markets and tightening credit take their toll.
And Carlos Ghosn, CEO of French carmaker Renault SA, said the global auto industry could remain in a funk for two years.
"We don't know if we are at the start of the end or the end of the start," he told reporters.
With rock music and clouds of dry ice, automakers unveiled smaller and more fuel-efficient cars to cater to consumers both cash-strapped and environmentally conscious. The new models are testimony the industry is working to adapt to an era of expensive gas and mounting concerns about global warming.
Honda Motor Co. unveiled a five-door, gasoline-electric hatchback to challenge rival Toyota Motor Corp.'s success with the hybrid Prius. Honda said its Insight would be cheaper than any other hybrid car on the market, to make the low-emission technology affordable for more consumers. The Japanese automaker aims to sell 200,000 of the cars each year, launching next spring in Japan, Europe, and North America.
Renault showed off a revamped Megane compact hatchback. France's second-largest automaker, which is cutting 6,000 jobs to maintain profitability, hopes the car will make up for poor sales of the low-cost Laguna.
And luxury carmakers like Ferrari added their own touch of glamour. The Italian automaker introduced its California coupe-cabriolet with a retractable hard top claiming that customers at the very top end of the market are immune - for the moment.
The displays covered the entire range: fast to slow, luxury to economy. Renault displayed a Formula One racer. Peugeot showed a speedster for the Le Mans Series. Mercedes unveiled its latest armored limousine for VIPs, described as "luxuriously spacious and superbly comfortable."
Underscoring the need for green, some models had the amount of carbon dioxide they emit pasted in large numbers down their sides.
The show opens to the public tomorrow after two days for media.
Citigroup expects 2008 to be the first year of volume declines since 2001 for the global car industry, and last month it lowered its outlook for this year and next after double-digit declines in new car registrations in western Europe, the United States, and Japan.
Overall US auto sales plunged last month, dropping below 1 million for the first time in more than 15 years. 