By Jason Stein, Automotive News
Frankfurt, Germany - The bottom of the financial crisis has been hit, industry executives said here last week. But a full recovery will be a long, slow process that may not occur until at least 2012.
"We have an increasing number of signs that the worst could be over," Daimler ceo Dieter Zetsche said at the Frankfurt auto show. There is "a remaining risk of a setback," he added, but the more likely scenario "is that we are in a slow and long but consistent recovery."
Zetsche said the United States is at "a pretty bad level," below that of Europe and China: "It does not seem that we will see, in one or two or three years, a recovery to pre-crisis levels."
The Frankfurt show, which was down 30 percent in terms of exhibitors, opened one year to the day after investment banking firm Lehman Brothers filed for bankruptcy. That event triggered a financial panic and eventual contraction in the auto industry.
Twelve painful months later, there are indications that things are improving.
The United States is beginning to bounce back, Europe is slowly recovering, and China is hot again, industry executives said.
The crisis "is not over yet, but there are increasing signs that the bottom has been reached," said Volkswagen group ceo Martin Winterkorn."The industry can be cautiously optimistic."
Chrysler and Fiat ceo Sergio Marchionne said "the US has seen the worst; it will have better numbers in 2010." Overall, the global auto market was unlikely to reach sales levels seen in 2008 before 2012 to 2013, Marchionne added.
Volvo ceo Stephen Odell said the first signs that the worst is over came in early September, when he decided to increase production by 10 000 units -- the first time in nearly two years. When he took the ceo job a year ago, there were 18 000 unsold Volvo vehicles in US ports. Today there are 300.
Jim O'Donnell, ceo of BMW of North America, said September will be the first month BMW sales will exceed sales of a year earlier. The luxury market, in theory, should recover better than the rest of the market, he said.
"In the final quarter you will see the premium guys come back relative to last year, but not significantly," he said. "It will be slow."
Johan de Nysschen, president of Audi of America, seconded that idea: "The people who have the money will be the first ones back in."
All executives agreed that the government-run cash-for-clunkers program helped the US market.
TRW Automotive ceo John Plant said cash for clunkers provided a much-needed boost. He foresees a US production rate of 5 million cars in the second half of the year and a 10 million rate in 2010.
Renault/Nissan ceo Carlos Ghosn said Renault expected worldwide sales to reach 59 million units in 2009. The good news, he said, is that at the beginning of the year he expected it to be 55 million.
In Frankfurt, "you're talking more about products now," Ghosn said. "We are happy about that."
Paul McVeigh, Dave Guilford, Douglas Bolduc, Luca Ciferri, Diana Kurylko and Reuters contributed to this report.
You can reach Jason Stein at [email protected]