BMW rolls on despite mishap at start of motor show

European car sales increase 11.5 per cent year-on-year in August, industry data shows

The new Astra Sport at the Frankfurt Auto Show. Photograph: Hannelore Foerster/Getty Images
The new Astra Sport at the Frankfurt Auto Show. Photograph: Hannelore Foerster/Getty Images

The Frankfurt motor show started with a stumble. At the opening press conference of the biennial car industry extravaganza, BMW chief executive Harald Krüger had only started his presentation when he fell to the ground.

BMW denied any long-term implications and a spokesman said Dr Krüger was feeling unwell before the presentation. He had been recently promoted to the top job at BMW and it was his first presentation as chief executive at the German motor show.

The commotion meant the Bavarian company never had the chance to properly present its two new plug-in hybrids or its latest 7 Series flagship. The show went on however.

While there was a large number of new mainstream models on display, such as the new Toyota Prius, Opel Astra and Renault Mégane, the focus remains on the growing demand for SUVs in Europe.

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SUV sales

Industry data showed European car sales jumped 11.5 per cent year-on-year in August. A large percentage of this was in SUVs of varying sizes.

Jaguar introduced its new F-Pace SUV, Lexus its latest RX and even Bentley joined the race with its Bentayga, for which prices are likely to be about €340,000. Demand for SUVs has always been strong in the US and Asia and industry forecasts suggest the appetite is growing in Europe.

It’s good news for the car firms as the profit margins on these cars normally exceed those on a hatchback.

Europe is proving more profitable again for the car firms, after several years where it earned a reputation as a money pit for capital investment. That reputation hasn’t necessarily changed but profits are starting to return to soften the pain for shareholders.

Opel’s chairman Karl-Thomas Neumann predicted the General Motors-owned group will return to profit next year, joining other executives who were bullish about European operations.

Yet many industry executives had reason to feel faint at the thought of a continued downturn in Chinese demand. Car sales in China, until recently the profit engine for automakers around the world, have been hit by a cooling economy and a plunging stock market.

Demand was flat in the first eight months of the year and could drop in 2015 for the first time since the market took off in the late 1990s.

Local partners

China has accounted for more than half of VW’s profit in recent years and about 40 per cent at GM, which is pursuing a $14 billion (€12.4 billion) expansion in China with its local partners. Both

VW

and GM have already begun to trim local production.

Michael McAleer

Michael McAleer

Michael McAleer is Motoring Editor, Innovation Editor and an Assistant Business Editor at The Irish Times