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Massive VW Phaeton hogs limelight in Geneva, as Koreans plan new asssult.
Is upmarket move a mistake? Maybach makes coy debut Mazda, Opel join mini-MPV race |
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| The gargantuan Volkswagen Phaeton, on show for the first time at the Geneva car show, and the bulky, misshapen Vel Satis, grinning inanely at the crowds from the Renault stand, are metaphors for what ails the European car industry. The industry, apart from luxury manufacturers like Porsche and BMW, is either losing money or producing wafer-thin profit margins, even as sales remain close to record highs. The mass car manufacturers are not producing enough of the cars that people want at prices they can afford and are exposing themselves to competition from below. Some are burning huge amounts of shareholders’ money moving into blind alleys already dominated by Mercedes and BMW. Meanwhile Hyundai, Kia and Daewoo from South Korea are making cars that people want and can afford. Companies like Ford decided that the only way they could compete in the luxury sector was to buy the likes of Volvo, Jaguar, and Land Rover which have the brand power to command the coveted fat margins. Toyota invented Lexus to the job for it. But VW and Renault are venturing into the stratosphere where their brands will have a tough time flying. The original Vel Satis concept car suggested futuristic styling would win buyers from BMW and Mercedes. But the actual road-ready Vel Satis on the stand in Geneva has been watered-down to blandness. Europe firing blanks This feeling that Europe is firing blanks becomes more apparent when you amble across to the burgeoning Korean section at the Palexpo exhibition centre in Geneva. The little Hyundais, Kias and Daewoos are practical, often cute, and affordable. Compare and contrast. The VW stand was dominated by four versions of the huge, 6 litre, “W” 12 cylinder, 420 bhp Phaeton, which weighs nearly 700 pounds more than a top-of-the-range Mercedes S class. The Phaeton, retiring chief executive Ferdinand Piech’s farewell gift to new leader Bernd Pischetsrieder, has 4 wheel drive, air suspension and seats that can be adjusted in 18 different ways. It even has a trunk which opens and closes automatically. Prices start at 56,200 euros and soar close to 100,000 euros. Good luck trying to sell that, Bernd. VW hasn’t said how much it has spent developing the Phaeton, and it has slashed its sales forecasts for the vehicle from an original 30,000 a year to between 12,000 and 15,000 by 2004, when the car is on sale worldwide. About half of the sales will be in the U.S. – VW versus BMW, Mercedes, Lexus, Acura and Infiniti. Pischetsrieder said before the Geneva show that the Phaeton project would eventually break even but he declined to say when. But the word from VW is that it doesn’t matter if the Phaeton isn’t a red-hot sales item, the mere fact that it exists will show potential customers the quality and technology that the company is capable of offering. This halo effect will somehow induce potential buyers of Passats, Golfs, Polos and Lupos to pay a little bit more because, according to the marketing men, they will be proud to be associated with such a fine product. This won't faze the Koreans That theory probably won’t have the Koreans shaking in their shoes. Hyundai and Daewoo both unveiled new supermini models in Geneva aimed squarely at the VW Polo, Ford Fiesta, Fiat Punto and Renault Clio. Kia’s stand was impressive. The Hyundai Getz, primarily designed for the European market, will lead the company’s assault on its target of overall sales of 275,000 in 2002, rising to 500,000 by 2005. The company, 10 per cent owned by DaimlerChrysler, will need to sharpen up on last year’s performance when its sales sank 3.3 per cent to 219,800 for an overall market share of 1.5 per cent. But a company which managed to sell nearly 350,000 cars in the U.S. last year, must be doing something right. Hyundai says sales of the Getz will hit 76,800 this year, and 133,000 in 2003. Prices will start at around 11,000 euros. Daewoo’s new 1.2 or 1.4 litre Kalos is offered as a 5-door hatchback and a 4-door saloon. The sedan looks particularly good, rather like a small Alfa Romeo 156, and goes on sale in the second half of 2002. Not bad for a technically bankrupt company. BMW"1" Series BMW unveiled its CS1 concept car at the show, a convertible based on the probable shape of the new “1” series car to launched in 2004. The “1” series will slot into BMW’s range above the Mini and below the “3” series Compact. Speculation at the show cast doubt on the future of the Compact because the “1” series would be perilously close in price, expected to be around 24,000 euros. Camouflaged Maybach Mercedes almost introduced its new huge Maybach V-12 5.5 litre 550 bhp luxury car. The Maybach, likely to retail for around 300,000 euros, was hidden from detailed view behind smoked glass, but apparently has rear seats which individually recline, presumably like a first-class seat in a airplane. Mazda won the prize for the tackiest, most superficial advertising theme, Zoom Zoom, along with its impressive new Mazda6 cars which replace the 626. The Mazda stand was alongside Ford, which owns about one third of the Japanese company. This did prompt the thought that why would a company like Ford allow a company it more or less controls build a car which if successful, would steal sales away from its own excellent Mondeo? The thinly disguised VW Passat, called the Skoda Superb, prompts similar thoughts. Mazda also jumped into the new mini-MPV market, showing its MX Sport Runabout which will appear out of Ford’s Valencia, Spain plant early in 2003. This will compete against the Ford Fusion, which took pride of place on the Ford stand, and the Opel Concept M. The Opel concept will start production next year.
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