Auto executives from around the world, car journalists, and thousands of other hangers-on are flocking to the French capital for the Paris Auto Show which is kicking off with an end-of-the-week preview of new models and concept vehicles for the media.
One automaker after another is primping itself for the Parisian catwalk — such as the renascent Volvo, which is unveiling new variants of its V40 at the exhibition, and the snazzy newJaguar F-TYPE, which was feted at the Musee Rodin Thursday night with celebs on hand including American chanteuse Lana Del Rey, above.
But unfortunately, a pall is hanging over the hall and the show's participants: the growing distress of Europe's auto market, which seems to be worsening not only quantitatively but perceptually every week.
So, while strutting their new sheet metal and offering hopeful remarks about the future of this new production model and that new concept car, many of the assembled top chiefs of the world's auto industry also are going to be trying to explain what they're doing about Europe's woes.
Indeed, there's one new report after another of just how much worse conditions and prospects for the European auto market are growing.
Ford expects to lose more than $1 billion in Europe this year and is trying to buy out a few hundred white-collar employees there. Hyundai has indicated that it is revising its mid-term sales and market-share targets for the continent because of the dim sales outlook, deferring by one year at this point its goal of selling a half-million cars in 2013 and also its expectation of achieving a 5-percent market share by 2015.
Sergio Marchionne, who was able to do a nifty two-step between Fiat in Italy and Chrysler in the United States for a few years, now has run up against such a stout stone wall in the European market that he wants to attempt to make Fiat's operations in Italy into an export base — because the European market isn't expected to have enough of an appetite for the company's cars for a few years.
Marchionne spoke to Fiat managers this week to reassure them of the company'scommitment to Fiat, and one way that Marchionne wants to fulfill that commitment is to have Italian factories make cars that will be sold outside Europe, especially in the United States. Of course, Marchionne also lately has moved to turn Chrysler factories in the United States into their own export base, so presumably one of the things he's still figuring out is how not to be sending coals to Newcastle.
But even Volkswagen — whom Marchionne has singled out as inured to the pain of other European automakers, and which he's gunning to meet in a "dawn showdown" on Friday morning — is suffering now in Europe. The business environment has become "significantly more difficult and tougher," the company said in a statement this week, citing CEO Martin Winterkorn addressing his own staff gathering, at VW's headquarters in Wolfsburg.
Some of these same auto executives may have smiles on their faces in Paris, for the cameras and the crowds. But they'll be frowning on the inside.
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