Paris Motor Show and European automotive reality
The 2012 Paris motor show just closed its doors – and, with more than 1.2 million visitors, was once again the world’s largest automotive gathering. More than 100 new car models were released – from mainstream bread-and-butter vehicles such as Renault’s new “Clio” or VW’s 7th generation “Golf” to high-end sports cars as Jaguar’s “F-Type” or McLaren’s “P1”. BMW presented its first ever van – featured as “Active Sports Tourer” – with front-wheel drive and 3-cylinder hybrid engine. Porsche unveiled a new version of its “Panamera” – essentially a station wagon, which Porsche marketing dubs “SportTurismo”. There were small SUV’s, large SUV’s, cross-overs, parallel hybrids, plug-in hybrids, all-electric vehicles, light-weight innovations and myriads of new electronics-based offerings such as lane-departure warning systems, in-car wifi hotspots, cloud-infotainment solutions.
So the auto industry seems to be truly on fire, its innovation engine hitting on all cylinders. Yet economic reality looks very different.
European auto sales fell 11% in September, representing the biggest annual plunge in almost 2 years. The full year market is projected to come in at a 17-year low.
As a way out, simple cost adjustment will not do it, more drastic restructuring actions are called for. Peugeot-Citroen is in heated debates with labor representatives and politicians regarding the proposed closure of its Aulnay plant near Paris. At the same time, GM considers merging its money losing Opel unit with Peugeot-Citroen. The Renault-Nissan alliance announced to double their annual cost savings within four years. Daimler kicked-off its own global savings program while in parallel expanding its partnership with Renault. And ACEA president and Fiat-Chrysler CEO Sergio Marchionne even proposed a EU-led European-wide industry restructuring.
Are these “industrial” restructuring steps – capacity adjustments, tighter partnerships, mergers – adequate moves to ensure the future of this fascinating industry? Or is there a completely new global industry model required to more systematically weather these economic cycles – now in Europe, previously in the US, maybe next in China/APAC? Please check out our new viewpoint “Electronics-ization in Automotive: Reinventing the Car Industry Model to Boost Profitable Innovation“ in which we propose a model that is inspired by the collaborative approach of the ICT industry. And give us your feedback whether you think this might be a way to ensure future motor shows will produce the same level of excitement and innovation – in Paris and elsewhere.