GENEVA — Such is the state of the European car industry that one of the main topics at the Geneva auto show on Tuesday was the political situation in Italy. While automakers continued to show new models with extravagant events, almost everything is overshadowed by the economic crisis in Europe and the risk that political turmoil in Italy will undermine any recovery.
Elections last month, which gave no party enough votes in Parliament to form a stable government, have added another element of uncertainty in the euro zone and helped discourage expectations that the car market in Europe could begin to recover as early as this year from its worst crisis in almost two decades.
“The country is not being governed. This is something that worries me a lot,” said Luca Cordero di Montezemolo, the chairman of Ferrari and one of Italy’s best-known business leaders. The strong showing by protest parties means “the decision by voters was not to take care of the future,” he said.
Not that Ferrari sales are much affected. Mr. di Montezemolo said that there was already a surplus of people willing to pay the sticker price of 1 million euros, or $1.3 million, for the limited-edition supercar, called simply LaFerrari, that the company introduced Tuesday. Only collectors who already own another Ferrari will be allowed to buy one of the 900-horsepower, hybrid models, Mr. di Montezemolo said in an interview.
LaFerrari drew unusually large crowds even by Ferrari standards, Mr. di Montezemolo said, perhaps because it offered a distraction from the gloom prevailing elsewhere.
Outside Ferrari, the only point of debate among car executives here was how long the slump in Europe would last and whether it could get any worse. New-car registrations in the European Union fell 8.2 percent last year, to 12 million vehicles, the lowest since the mid-1990s.
The relative optimists, including Stephen T. Odell, president of Ford in Europe, said they saw a chance that 2013 could be the low point.
“It feels like we could be in the trough,” Mr. Odell said in an interview. He noted that surveys have shown business people are becoming more optimistic, but added there was little hard data to support his gut feeling that the worst was almost over.
Sergio Marchionne, the chief executive of Fiat and Chrysler, was also cautiously upbeat. “My expectation is that we will see a recovery in 2014 of some fashion once Europe gets its act together,” he said.
Mr. Marchionne, whose company is the largest private employer in Italy, said he had met Tuesday with Giorgio Napolitano, the Italian president, who is responsible for mediating among the parties in Parliament. “I am confident Napolitano will have the wisdom and know-how to shepherd the country through the next phase,” Mr. Marchionne said during a news conference in Geneva.
As has happened in the United States, European car owners will reach a point where they have to replace their old vehicles. After five years of declining sales in Europe, that point could be near, said Stephen Girsky, vice chairman of General Motors and overseer of the company’s European unit, Opel.
But other auto executives were far more pessimistic. Carlos Ghosn, chairman of the Renault-Nissan alliance, said that European car sales have already declined more so far this year — by 8.7 percent in January compared with those in the month a year earlier — than most analysts had forecast. And the downturn has begun to spread beyond the crisis countries in southern Europe, Mr. Ghosn said.
“Europe is going to be a very tough market for a while,” he said at a news conference, adding that the slump could last until 2016.
Even when the European market does recover, it will look a lot different than it did in 2007, when the crisis started. New European restrictions on carbon dioxide emissions, a response to global warming, mean that carmakers must spend billions of dollars developing new technology. Mr. Marchionne said it might be difficult to pass that cost to buyers.
Article source: http://www.nytimes.com/2013/03/06/business/global/politics-steals-the-show-at-geneva-car-event.html?partner=rss&emc=rss