A series of five BMW is on display at the headquarters of the German luxury carmaker in Munich May 11, 2011.
Credit: Reuters/Michael DalderBy Massy-Helen Beresford and Christiaan HetznerLONDON/FRANKFURT | Fri 09/09/2011 9:26 am EST
FRANKFURT/London (Reuters)-the global automotive industry descends in Frankfurt next week to show the latest models hopes will move away from an economic slowdown in some of its biggest markets, like government spending cuts chip away at consumer confidence in Europe.
Automakers also are experiencing slowing growth in China car market, now the world's number one search engines and major influx of luxury cars over the past two years.
Even if the United States avoids recession, will intensify the competition there as Japanese automakers battle to claw back lost ground when the March earthquake interrupted production.
Car registrations in some major European markets actually rose last month, but analysts are warning the figures, which reflect the cars purchased two months ago, before the fall of stock market of the summer, do not tell the whole story.
"Certainly a point of view, a lot has changed during this time," said Barclays Capital analyst Michael Tyndall. "I take little comfort from August good numbers".
"It was very aptly said that we must be careful that we do not talk ourselves into a recession," he said. "It is very easy from a consumer point of view of getting to a point where you don't want to spend on anything--is very uncertain," he added.
Evaluation of Tyndall of the vicious circle that could choke off demand is shared by the luxury automaker BMW (BMWG.DE) chief financial officer Friedrich Eichiner, who told reporters on Friday: "we don't want to provoke a crisis by the way, why don't we see a moment".
Eichiner said: "we believe that we will have to deal with growth dampened in the future, but not necessarily with a new recession."
However, with the rapidly changing macroeconomic situation, gloomy forecasts could weigh on demand.
Tyndall said: "we are looking for a slower growth and Europe are looking at some pullback in 2012, but not anything like the collapse that we saw in 2008".
But even if the car industry is expecting something far short of an accident, will face the slowdown without the support of public loans and generous scrap schemes that saved the market last time.
PricewaterhouseCoopers analysts see a "difficult" the last quarter of 2011 in Europe that will drag the whole year for a dip of 2.5 per cent in the European automotive market to 13.4 million vehicles.
Josselin Chabert, analyst at Autofact unit PwC said: "With the debt crisis, the reduction of economic forecasts and weak prospects for the labour market, numerous European countries could experience a difficult months ahead."
European car makers may have scrambled to increase their presence in China and other emerging regions, but they still rely on Europe for most of its sales and tough austerity measures threaten consumer spending power.
The Frankfurt show, which opens to the media on September 13, is traditionally an opportunity for German car manufacturers show their new premium models.
These tags in particular has been flying high recently as affluent Chinese buyers have snapped up their plush models, but the smaller cars, they are set to unveil next week should help them gain a larger share of the stagnation of demand in Europe, where the tightening emissions legislation favours small vehicles.
"It's a great tendency, especially to German car makers, shifting down-segment," said the analyst at IHS Global Insight Tim Urquhart, adding that the movement also helped attract younger drivers.
"Can extend into smaller segments and there is a new demographic that will be able to buy their vehicles."
Mercedes-Benz (DAIGn.DE) will take the wraps off its new class b for the first time in Frankfurt, while the BMW (BMWG.Will show your 1) new compact series.
Europe's largest automobile manufacturer, Volkswagen (VOWG_p.DE) will showcase its new small town car, the Up!, which it hopes will rival popular small models including Fiat (FIA.500 MI) and forms a fundamental part of its bid to be the largest automobile manufacturer in the world until 2018.
Drive VW Audi displays an urban concept car powered by a lithium-ion and built around a framework of carbon fiber monocoque in their booth lavish 10 million euros that incorporates its own test track.
PwC said that Germany itself remains a bright spot on in melancholy and expected growth this year of 9.7 percent in this market, Europe's largest, in the region after its economy performed better than some of its neighbours.
If this will last is an open question and dealers are braced for tougher times ahead.
Ernst-Robert Nouvertne, owner of Concessionaire Autohaus Nouvertné am Wasserturm in Solingen said orders had cooled rapidly since may, after a strong start to the year.
"But we hope new models and premieres in Frankfurt auto show to play a key role in giving impetus to new orders."
Juergen Karpinski, owner of Autoschmitt Frankfurt added: "new cars are in demand and can be long waiting lists for several months. However, we expect an impact-what always happens when the economy softens and hurts purchasing power, it just comes with a delay. "
(Edited by Chris Wickham and Mike Nesbit)
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