Detroit Auto Show
January 8, 2007
German automakers expect to increase their market share in North America this year, said Bernd Gottschalk, president of the VDA automotive industry association, during the 2007 International Auto Show in Detroit on Sunday.
Coming off record US sales in 2006 -- 921,000 vehicles which accounted for nearly six percent of the entire market -- industry officials said they expected growing sales of "clean diesel" cars to help them compete for American buyers.
The German share of the automobile segment in the US is nearly 10 percent, concentrated largely at the luxury end of the market. BMW and Audi posted record sales in 2006, and Mercedes, the DaimlerChrysler flagship brand, sold 11 percent more last year than it did the 12 months before.
Cutting edge diesel technology
The share of diesels among new US cars and light vehicles is projected to double by 2010 to about 7.5 percent, which presents a major opportunity for German makers, added Gottschalk.
While Japanese automakers have led the way with hybrid gas-electric cars in the US, German companies are counting increasingly on their reputation for cutting-edge diesel technology.
'The goal can only be to make life as difficult as possible for the Japanese," Gottschalk said at a news conference for the motor show which will be open to the public until January 21. "We are pursuing our own path."
German automakers are gambling that high oil prices, a growing environmental awareness in the US and new government rules promoting low-sulphur diesel fuel will aid their marketing push.
Flagging what is likely to be a major part of the campaign, Gottschalk said a compact car using turbo diesel technology proved more fuel-efficient than a hybrid in a recent test drive in Germany.
Diesel cars are highly popular in Europe, since diesel is taxed significantly less than gasoline. But in the US, diesel is dogged with a reputation as a dirtier, lower-performing fuel.
Demand for smaller vehicles
Smaller fuel efficient cars, notably the Mercedes division's "Smart for two" have been drawing curious crowds at the show.
The tiny car has become a familiar sight on Europe's congested roads since it was launched in 1998, although the project has yet to make a profit.
But in the United States, where gas-guzzling trucks and tank-sized sport utility vehicles (SUVs) are popular, the notion that the two-seater could be a hit was dismissed until just recently.
"That's not the attitude people are showing today. The Smart is simply cool," said DaimlerChrysler Chairman Dieter Zetsche, who insisted that North American drivers were ready for the vehicle.
More than 770,000 Europeans chose the first generation of the Smart vehicles, which are ideal for driving on European cities' smaller streets.
Fuel prices in US hurting gas-guzzlers
"I think the simple equation that the larger the car the better doesn't apply that much to the US market any more either," added Zetsche. Now, with higher fuel prices hitting US drivers' wallets and traffic gridlock commonplace, DaimlerChrysler expects sales of the vehicle to take off.
Company officials point to the Smart's relative success in Canada, where the brand was expected to sell 1,500 units in its first year but ended up moving more than 4,000.
While total US auto sales are expected to drop to 16.2 million in 2007, German automakers are still aiming to break the one-million mark this year, said VDA's Gottschalk.