German car makers think smaller
Germany's car makers are introducing important new models in the ferociously competitive small car market at this year's Frankfurt auto show.
The Volkswagen Up subcompact, Mercedes-Benz's streamlined B-Class hatchback and BMW's electric-powered i3, aimed at crowded cities with its zero-emission motor and lightweight, carbon-fibre reinforced body, are all major bets on what will appeal to buyers - and help earnings through an uncertain year ahead in which global demand may slow.
The mood ahead of this year's show is strangely mixed, upbeat thanks to recent strong profits but clouded by the European government debt crisis, which has depressed consumer optimism and growth forecasts for the year ahead.
But this year's 64th International Motor Show will nevertheless be in sharp contrast to the last show in 2009, when the recession cast a pall. Organisers say 1,007 exhibitors have signed up, compared with 781 last time, and the confidence of the home car makers is such that VW luxury brand Audi is splashing out for its own test track.
VW, Daimler, BMW and Porsche all turned in strong earnings so far this year, marked by fat profit margins on strong sales of high-margin luxury vehicles and SUVs in emerging markets such as China, Brazil and Russia. But growth in emerging markets is expected to wane, and the US recovery that fed export earnings is also now in doubt.
New small car offerings face a highly competitive European market, where there are lots of difference makes and low prices and profit margins.
When it goes on sale later this year, Volkswagen's tiny, petrol-efficient Up will play an important role in the company's bid to overtake Toyota as the No. 1 car maker by volume by 2018. It offers maximum interior room on a minimum carbon footprint and technology usually found on bigger cars such as a braking sensor to help prevent low-speed collisions.
VW is trying to position the Up as much more than a bare-bones, low-cost vehicle by equipping it with technology and safety features more associated with larger cars, such as City Emergency Braking, in which sensors detect imminent collisions at low speeds and automatically apply brakes.
Mercedes has given its B-Class hatchback a lower, sleeker roof line, resulting in less aerodynamic drag for a family-oriented car. It is also packed with technology such as collision prevention assist, which can apply brake pressure when a crash is imminent, and a seven-speed dual-clutch manual transmission.
BMW's electric i3 compact saves weight by using carbon fibre-reinforced plastic, boosting not only range but performance; it goes from 0-62 mph in under eight seconds, driven by a 167-horsepower electric motor.