German carmakers to weather weak US market

13th January 2008, Comments 0 comments

German car manufacturers expressed optimism Sunday at the Detroit Motor Show despite a weak US market.

Detroit (dpa)- German car manufacturers expressed optimism Sunday at the Detroit Motor Show despite a weak US market.

"We have good chances of cracking the 1 million mark soon," said Matthias Wissmann, president of the German Association of the Automotive Industry (VDA).

Last year, German automobile manufactures increased sales to the United States by 3 percent to 940,000 vehicles, which amounted to a market share of nearly 5.9 percent. The Germans want to gain ground over the Japanese with diesel technology.

The entire US market is expected to decrease by 2 percent to 15.7 million units this year.

Volkswagen (VW) announced record sales in 2007 at the Detroit Motor Show - up 7.9 percent to 6,189 million vehicles. Strong growth in the Chinese and Latin American markets had propelled the company past the 6 million mark of vehicles sold.

VW's Chief Executive Officer Martin Winterkorn said he expected the company could again achieve a record in 2008. Germany was the most insecure market, he said. As a result of the debate on climate change and reducing carbon dioxide emissions, customers were becoming unsure and cars were increasingly being seen as the "root of evil."

VW's subsidiary Audi want to sell more than 1 million cars worldwide in 2008. In 2007, Audi increased sales by 6.5 percent to around 964,000 vehicles. Audi chief Rupert Stadler said the company was looking into the possibility of building a plant in the US.

The head of German automotive concern Daimler, Dieter Zetsche, expressed optimism about the automobile industry's outlook for 2008.

The company had good opportunities in the US, he said. The Stuttgart-based automobile company recorded its 14th consecutive sales record in 2007 when it exported 253,400 vehicles - an increase of 2 percent - to the US.

Zetsche said that the three all-terrain vehicles in the M class, the GL and R class, which are equipped with the particularly clean Bluetec Diesel Technology, are to become licensed in all 50 states this year.

Mercedes Benz Cars wants to overhaul six models in 2008 and launch two entirely new vehicles on the market - the CLC Coupe as well as the small cross-country vehicle GLK which is being presented in Detroit as part of a series study, Zetsche added.

"The GLK is the right model at the right time," Zetsche said in reference to booming sales in the smaller cross-country vehicles.

Zetsche also said that Mercedes-Benz wanted to achieve an operating margin of 10 percent in 2010. He stressed that the flagship S class had sold 58,500 units in 2007 - a increase of 30 percent over BMW and Audi with their top models 7 and A8 together.

All German manufacturers from BMW to VW are to launch several diesel-drive models on the US market this year.

Wissmann said, "It is quite appropriate to say that 2008 is set to be the year of the clean diesel breakthrough in the US."

So far, the share of diesel driven cars is only 3 percent and many experts believe that this could increase to a 15 percent market share by 2015.

However, the weak US dollar was still a problem for German manufacturers, Wissmann said. Apart from several exchange rate fluctuations, the production abroad would become increasingly important.

Meanwhile, 250,000 of the vehicles sold in North America had been manufactured locally. However, that was at a cost to German workers, he added.

"We hope that workforce figures will remain steady in 2008 and perhaps increase slightly." However, real growth was occurring elsewhere.

"In two to three years time, we will be making more vehicles abroad than at home."

The biggest US car manufacturers, who are battling weak sales and billion-dollar losses, are taking advantage of the platform offered in Detroit.

Ford expected to make a profit again in 2009, said Chief Executive Officer Alan Mulally Sunday at the Detroit Motor Show.

Europe, Asia and Latin America were already profitable markets for Ford with growth potential, he added.

The second-largest US car manufacturer had incurred losses of more than 12 billion dollars in 2006 and also sustained an additional loss of 380 million dollars in the third quarter of 2007.

Ford announced six new models for 2008 including two with hybrid drive.

General Motors was also showing its "green side" in Detroit as it joined a US company that wants to use ethanol as a fuel or gain it from the remains of plants and even from tyres.

GM is also set to launch 16 new hybrid vehicles onto the market over the next four years, the Chief Executive Officer Rick Wagoner said.

Meanwhile, the loss-making US automotive concern Chrysler announced Sunday that it was setting itself the goal of doubling international sales in less than five years.

Speaking at the event, Chrysler head Robert Nardelli said there was still room for global growth in the car manufacturing industry.

In 2007, Chrysler - the third largest US auto producer - had a 15 percent increase of sales outside North America to around 238,000 cars. In doing so, the company sold less than 10 percent of its cars outside its home market.

The German company Daimler sold a majority stake in Chrysler was sold last summer to the US financial investor Cerberus.

High petrol prices and more recent financial uncertainty among consumers as a result of the credit crises led to reduced 2.5 percent fewer car sales to 16.1 million vehicles in the US.

Japanese manufacturers had come up trumps in the past years especially Toyota with its popular hybrid drives.

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