Reuters reported that executives at the Frankfurt Motor Show predicted a bumpy road to a car market recovery as they showcased their latest green technology, which they hope will transform the industry. News that European car sales advanced 3% in August showed markets were finally stabilizing, but top managers said it would take years to get back to the frothy days before the financial crisis hit.
Mr Bernhard Mattes head of Ford in Germany said that "I do not expect that we will return to conditions like in 2007 or early 2008 in the short term. That means we will see a slow recovery in 2010, 2011 and then have better and more stable market conditions in 2013 and 2014." Korean carmaker Hyundai Motor was more downbeat. Mr Allan Rushforth VP of Hyundai Motor Europe said that "It won't be until 2015 when the market picks up significantly and we'll see 2007 levels in Europe again."
The August rise in new car registrations in Europe was fueled in part by state incentives that could leave the sector with a hangover once they run out. Consumers are also leery of splashing out while unemployment is on the rise. European car sales have edged up since June after a 14-month slump but are down over 8% in the first eight months. Mr Martin Winterkorn CEO of Volkswagen saw green shoots in the market after the worst financial upheaval since the Great Depression. He said that "The difficult crisis in the automotive industry is not over yet, but there are increasing signs that the bottom has been reached."
But Toyota Motor Corporation expected industry auto sales in Europe to stagnate or shrink in 2010 as government incentive programs cease to inflate sales. Mr Tadashi Arashima president of Toyota Europe said that natural demand remained pretty bad. He added that "We're not optimistic at all." Industry watchers are on the lookout for more consolidation after General Motor's decision to sell control of its European unit, Opel, to a group led by Canada's Magna. The deal is drawing a political storm over EUR 4.5 billion in state aid that Germany has promised for the deal.