Auto makers defy crisis at IAA motor show

Clouds may be gathering over the global economy, but auto makers are revving up to try and dispel any gloom with nearly 90 new models at the world's biggest motor show, the IAA.

With more than 1,000 exhibitors from 32 countries crowding into 235,000 square metres (23 hectares) of the vast halls of Frankfurt's "Messe" trade fair, this year's "Internationale Automobil Ausstellung" is going to be 25 percent bigger than the last edition in 2009.

Held every two years, the IAA is the biggest and most important show of its kind in the world.

It opens its doors to professionals on Thursday and then to the general public on Saturday and will run until September 25.

Over the entire 10 days, the organisers, the German auto sector federation VDA, are hoping to attract as many as 800,000 visitors in all. But that forecast is a little on the prudent side, since the number was already surpassed two years ago when the last global economic and financial crisis was at its height.

"It is going to be a strong IAA," promised VDA President Matthias Wissmann.

Despite the eurozone debt crisis and fears the world could soon be heading into another recession, auto makers certainly appear to be in fighting form, running up strong sales so far this year, thanks primarily to buoyant demand in emerging markets and China in particular.

"Clouds are gathering on the horizon, but a lot of car makers - and German ones in particular - are on target for the best-ever years in their history," said Stefan Bratzel, professor for the auto industry at the University of Applied Sciences in Bergisch Gladbach.

Nevertheless, more cautious voices are beginning to make themselves heard.

"Car makers and associations insist the debt crisis is not affecting them and their monthly sales figures are rising from one record to the next," said Ferdinand Dudenhoffer of CAR-Center Automotive Research at the University of Duisburg-Essen.

"But the economic risks are increasing daily. Prospects for 2012 have become distinctly gloomier. While the official statements are not going to admit this, this will be very much the topic of conversation at the IAA," Dudenhoffer said.

The international rating agencies are already starting to downgrade their outlooks for the industry.

Moody's, for example, has cut its growth forecasts for the sector to 3.5 percent this year and 6.5 percent next year, from its earlier estimates of 5.1 percent and 7.4 percent.

In spite or perhaps because of this, the sector is pinning its hopes on new models, with a total 89 to be unveiled this year, 45 of them by German car makers alone and automotive parts suppliers are scheduled to premiere 94 new products.

Topping the bill will be hybrid and electric engines and small cars.

Volkswagen is going to present its new small city car, Up!, which it hopes will be a hit in Europe and emerging markets. It plans to launch an electric version and will use its platform for its Skoda and SEAT brands as well.

VW's high-end subsidiary, Audi, will be showing off its financial prowess with a stand costing 10 million euros ($14 million) complete with its own test circuit.

BMW is hoping to grab the spotlight with its electric series, BMWs, while Porsche will unveil a new generation of its iconic 911.

French car giant Renault is going to present a new version of its best-selling Twingo car, but also a new electric concept car, the Frendzy.

Italian maker Fiat and US giant Ford will also unveil a number of new models, while Japanese makers Nissan, Honda and Mitsubishi will mark their return to the IAA, following their absence in 2009.

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