You might have expected a sombre mood at the Frankfurt show with Chinese market growth down to a trickle, the Russian and Brazilian markets still basket cases, uncertainty in Europe over the economic effects of the migrant crisis and dire warnings about a possible recession in the US, but there was not a hint of it. Auto industry executives, and especially those from the German premium brands, were in buoyant mood, insisting that it would be business as usual.
Audi CEO Dr Rupert Stadler said there was “no reason to step back”, while his counterpart at Daimler, Dieter Zetsche, was equally upbeat.
Stadler described what is happening in China as nothing more than stabilisation, adding: “We are not revising any forecasts. Audi is in the phase of renewing 40% of the product line-up.
“The government in China has described what is happening now as a new normal. The stock market overheated, the real estate market overheated and the government wants to cool the economy, but for 10 or 15 years China was the factory for the world, so we should not be surprised or astonished.
“There are some bumpy roads now, but the purchasing power is well established and there is a large middle class, so it doesn’t matter. We can expect the car market in China to be 20 to 25m by 2020 or 2025.”
Zetsche was in full agreement. “For us, the situation in China is slightly different than for some,” he said. “We had 40% growth in July and 50% in August. We are aware of the transformation in the Chinese economy, but we are confident we will continue with double-digit growth throughout this year and are very optimistic for next year as well.”
Renault-Nissan Alliance CEO Carlos Ghosn, sitting alongside Zetsche at a forum they jointly host at every major autumn motor show in Europe, added further weight to the argument.
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“Even 5% growth adds 1m cars a year,” he said. “There has to be caution about what is going to be the stabilised growth rate, but we are looking at a 20m market in front of us. Renault will be starting its first plant in China in 2016 and we are bullish about the prospect. For Nissan there will be no scaling back, but any additional capacity has to be weighed carefully.”
As for other regions, Stadler described Brazil as a “a disaster” but added: “We are still the number one premium brand there.
“We will start local production of the A3 sedan in China next year and also begin building the Q3 in India and Brazil. The US is stable at around 17m cars a year and our growth rates are 12 to 13%, which is faster than the market.
“Europe is very stable. Great Britain has been performing for 10 years on a perfect level, Spain is now stable and Italy is coming back, but in Russia the total market will be 1.5 to 1.6m this year, which is a downturn of 40%. This is heavy.”