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Geneva show opens to public wary of auto purchases

Geneva show opens to public wary of auto purchases
AP
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First Published: Thu, Mar 05 2009. 09 25 PM IST
Updated: Thu, Mar 05 2009. 09 25 PM IST
Geneva: Spectators flocked to the public opening Thursday of the Geneva Auto Show, where they could gawk at the world premieres of over 100 new models without the pressure to buy during a period of economic uncertainty.
Albert Willimann of Switzerland surveyed a gleaming white new Audi A4 priced at 71,800 francs ($61,075). He likes the German brand, which is on course to overtake Mercedes and BMW in the European market next year, for its reliability. But he said the new models were too pricey for him.
“Second hand cars, a year or two old, are interesting right now,” Willimann said.
Even in Switzerland, where there is no auto industry to weaken the national economy, visitors said they were acutely aware of the difficulties some manufacturers are facing at the moment.
U.S. companies - which have been the hardest hit so far - are taking a back seat at this year’s show, scaling down their new releases and executive presence. None of the Big Three’s chief executives, who took flak when they flew in private jets to testify in Washington last year, showed up.
General Motors Corp. and Chrysler have already received $17.4 billion in federal loans to stay afloat, and together want additional loans of $21.6 billion. On Thursday is was revealed that GM’s auditors have raised “substantial doubt” about the company’s ability to stay in business.
The fate of GM’s European brands is in the balance, too. Germany’s Adam Opel needs euro3.3 billion by the second quarter to stay in business, while Saab recently filed for bankruptcy.
“I’m sad that European companies like Saab and Opel are being affected by what’s happening in America,” said Marcus Germann, who visits the show every year just to see the latest technology.
An engineer by training, Germann said he would think twice about buying a new car from a company on the brink of collapse.
Organizers said they had no problem filling the floor space ceded this year by the likes of GM, and were still anticipating to match last year’s attendance of 700,000 before the March 15 close.
Volkswagen, which managed to still post a profit in 2008, is one of the few automakers to put on a show for its new car presentations. Pop singer Pink feted executives with a song promoting the new Polo on the eve of the show, and dancers wearing a colorful palette of green, purple, red and turquoise introduced the car during the media presentation.
One ray of hope for U.S. auto makers hoping to sell to European customers came in the form of Chevrolet’s Spark, a compact car that immediately drew admirers to the GM brand’s otherwise empty stall.
“It’s so cute, so pretty,” said Rosetta Puliafito, who said the car’s American origin would not influence her buying decision. “My father has a Chevrolet, and he’s an Italian,” she said.
The show featured fewer lavish presentations, and many executives spent more time than they would have in the past working on their dealer and sales networks.
Lamborghini CEO Stephan Winkelmann said the company will consider closely which auto shows it attends as part of its cost-cutting measures to weather the financial crisis. The company will consider offsite events, to avoid higher costs.
“We will keep Geneva because it is very important to us,” Winkelmann said.
Jim Press, Chrysler’s president and vice chairman, said auto shows like Geneva remained an important part of the company’s strategy, largely because they provide a venue for buyers and auto lovers to connect with the product.
“Customers come and glimpse the future. They can look at the thing and they enjoy an emotional connection. How many business do people pay to come to see your product?” Press said.
But he added that the crisis is forcing a rethink in priorities.
“Auto shows are a great venue where it makes sense for investing for sales. I think some of the big lavish expenditures where people are spending money for publicity and not generating sales, that doesn’t make sense, especially in this environment.”
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First Published: Thu, Mar 05 2009. 09 25 PM IST