Geneva Car show opens against backdrop of sector gloom
Plenty of new cars on show, but not many are leaving the showrooms. Global Car industry profits plummeted 67% in 2008 and carmakers around the world are looking for support. Among those pressing governments for cash is General Motors, which warned it could go bust within the next thirty days, according to Carl-Peter Forster, President of General Motors Europe
“This is the worst economic crisis since the 1930s and its impact is effecting everybody especially the entire automotive industry. We've seen a dramatic drop in car sales across all manufactures; a trend that is beginning to show its effect through the value added chain in our industry.”
In Russia, GM sales dropped nearly 30% in January compared to the same period last year. Local car makers did even worse. Imports of new cars into Russia plunged nearly 75% in the first month of this year.
But analysts say domestic manufacturers producing cheaper cars will increase their market share in the near future. Globally, Chinese producers are among the few with a brighter future, according to Ivan Bonchev, Analyst at Ernst and Young.
“Reinforced trend which started even last year before the crisis, with Asian companies taking over new technologies. And, most probably, Chinese companies will be on the rise because they were perhaps the first ones to get state aid for international expansion and acquisition of new technologies.”
In order to stimulate demand, the Russian government has promised to partly subsidise the interest paid on car loans. But experts say consumers are holding back on buying whilst waiting for these measures to get off the ground.