PARIS — Plunging prices and overcapacity will again this year cast a shadow over the Geneva International Motor Show, which kicks off this week, but plenty of luxury racing dreams should still be prominently on display. The European auto industry got off to a bad start in January, when new car registrations in the European Union plummeted to their lowest level since 1990 after an already catastrophic 2012. Only 12 million cars were sold last year — the lowest number since 1995.
Switzerland, the host of what is one of the auto industry’s biggest events, is a rare bright spot on the crisis-hit continent. The Swiss, who do not belong to the EU, saw new car registrations jump 2.4 percent last year from an already record year in 2011, with 431,000 new registrations. For the neighboring EU nations, however, the end of the tunnel remains out of sight and most experts refuse to guess when, if ever, the market will come roaring back and hit its pre-crisis 2007 level of 16 million cars sold. Stefan Bratzel, a German car industry analyst, expects to see sales across Europe slip 5 percent this year and predicts that the mood in Geneva will be jaded. German carmakers, who sell heavily in North America and Asia where sales — especially at the high end — are up, are nonetheless doing quite well. Daimler and Volkswagen raked in record net profits in 2012, and BMW looks set to do the same. European leader VW, which saw its net profit soar 40 percent last year to 21.7 billion euros (US$28.6 billion), pulled far ahead of the next in line, PSA Peugeot Citroen. The French company has had a very bumpy ride and suffered a 5.0-billion euro loss last year. In July it announced the closure of its historic plant in Aulnay, near Paris. U.S. carmakers Ford and General Motors, who lost billions of dollars in Europe last year, also decided to shut down plants, with Ford closing sites in Belgium and Britain and GM closing an Opel plant in Germany. “We are only just getting started on the reorganizations” in the auto industry, Fitch analyst Emmanuel Bulle cautioned.