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Carmakers urge politicians to save the euro

Motor industry executives at the Frankfurt car show are warning that the single currency could be derailed without decisive action

Car industry executives, speaking at the Frankfurt car show, have urged Europe’s politicians to act boldly to solve the debt crisis, warning that the single currency could be derailed without decisive action.

The car industry, once producing in different countries and currencies, strongly backs the euro. Sergio Marchionne, chief executive of Italy’s Fiat and US carmaker Chrysler, warned that without a decisive resolution the single currency could “go off the rails”.

“The problems must be confronted in a serious way … We are not totally calm about this instability and the way in which the European crisis is being managed,” he said, warning of a hard year ahead for Europe’s car industry “unless we start giving certainties to financial markets, building a bit of confidence in the system that at the moment is lacking”.

Ford Europe’s boss, Stephen Odell, said Europe’s leaders need to act fast. “My request to the politicians is even if the medicine’s painful – and there’s a lot of painful medicine out there – we need to apply it quickly and robustly so we can have a sustainable base.”

Although they expressed frustration, there was little advice on offer for the politicians as they grapple with the debt crisis, but Odell summed up the views of many. “I just want to see some agreement, stability and people sticking to that. In business, there’s nothing worse in life than uncertainty and we’ve got a whole lot of uncertainty.”

Daimler’s chief, Dieter Zetsche, was clear that if Greece was eventually forced to exit the single currency it should be done in a way that protects the integrity of the bulk of the eurozone.

“We are clear proponents for a strong united Europe. We believe it is the only way to be relevant on a global scale and that is definitely what we are hoping for and voting for.”

The world’s carmakers are hoping that smaller, greener vehicles will take them through a choppy period for the global economy as they gathered to showcase new models in Frankfurt.

The industry, which suffered through the recession caused by the 2007-09 financial crisis, has been riding the global recovery but now is looking at shakier prospects amid Europe’s debt crisis and worries about the US economy. Fears of possible government debt defaults, starting from bailed-out Greece, are threatening to engulf Fiat’s home market of Italy and are sapping consumer confidence: car sales there are forecast at about 1.8m this year, the lowest level since 1983.

However, there are still 1,007 exhibitors at the show – up from 781 last time – and German carmakers including BMW, Daimler, Volkswagen and Porsche have posted strong profits recently thanks in part to rising sales in fast-growing emerging markets.

The confidence of the German carmakers showed in a lavish display of Daimler’s Mercedes-Benz and Smart lines, with Zetsche saying that no matter the recent “turbulence on the Frankfurt stock exchange … all lights are green” at the company and pledged to make Mercedes the world’s strongest luxury brand by the end of the decade.

Zetsche says Mercedes is launching 10 new entries in the next four years, including five compact cars, in its bid for volume. He refused to set a target, saying the goal was to produce more cars than its top rivals, Audi and Porsche.

“People are talking too much about crisis,” said Rupert Stadler, Audi’s chief executive. He predicted double-digit growth for US sales this year. “It’s always possible to complain.”

But even luxury carmakers were showcasing greener cars built from lighter materials and styled for city driving. Rolls-Royce presented an electric experimental car, the 102EX, while the sports car marque Aston-Martin rolled out its pint-sized Cygnet “commuter” car. Fiat has a new, slightly longer version of its Panda small car, a mainstay that has sold 6m since 1980, while Toyota has a new take on its familiar Prius, offering a plug-in hybrid version and a Prius+ seven-seater.

Daimler has an electric version of its tiny Smart two-seater. Ford is unveiling the Evos, a concept car that will not make it into production but which shows design elements that will appear on Ford’s regular models soon. Those could include the car’s slender, LED headlights, while VW has its new “sub-compact”, which is only 3.5 metres long and has a new fuel-efficient three-cylinder engine. BMW’s small electric i3 saves weight with hi-tech carbon-reinforced plastic. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds