Geneva motor show: Luxury and recession

Lamborghini Veneno Lamborghini unveiled the Veneno: Only three will be made - yours for 3m euros

There is spring in the air in balmy Geneva, where it seems a good idea to whip the roofs off and cruise along the lake.

The idea is far from alien to carmakers here; General Motors is unveiling the world premiere of its convertible Chevrolet Corvette Stingray, and Toyota's GT86 Open, which has been penned as a vision of youthful glamour, helps set the tone for this year's motor show.

Such topless extravagance pales into insignificance, however, at a show dominated by even more luxurious model launches.

At the high-performance end of the market, Ferrari's F-150 Enzo-replacement, with a price tag well in excess of a million euros, will be challenged by McLaren's P1, which was first seen as a concept in Paris last September.

Both combine conventional petrol engines with electric motors that will boost their performance.

In the luxury grand tourer segment, Bentley's redesigned Flying Spur will face competition from Rolls-Royce, which is unveiling its ultra-powerful and rather butch-looking Wraith.

The Wraith will be more expensive than Bentley's family of Continental models, however, so it will actually carve out a small market segment that is currently not served by anyone, Rolls-Royce's chief executive Torsten Muller-Otvos told BBC News during a recent exclusive preview event near the carmaker's Goodwood factory.

Harsh conditions

Inside the show halls on Monday, preparations were under way to get ready for a show of glamour that contrasts sharply with the real world outside, where the economic climate remains positively frosty.

Start Quote

The picture of the European market is pretty bleak to say the least, and it is difficult to see much in the way of positive news or growth potential moving forward”

End Quote Ian Fletcher IHS Automotive analyst

European carmakers are faced with a persistent economic storm that has resulted in car sales plummeting for many months.

"It started as a sovereign debt issue, which is a financial issue, but in tandem it came to be a consumer confidence issue," says Ford of Europe president Stephen Odell in an interview with BBC News.

Last year, European car sales fell 8.2% to their lowest level in 17 years, according to European industry body ACEA, and weak figures for January showed how sales continued to fall into 2013.

"The further south you go, the tougher it gets," Paul Philpott, president and chief executive of Kia UK, tells the BBC, pointing to how sales in, say, Spain, France and Italy have been particularly weak.

In fact, European carmakers are so gloomy that they are not merely closing down a string of factories across Europe, cutting thousands of jobs in the process.

In addition, many are also slashing staff bonuses and even their executives' pay, reportedly including that of some high profile, successful industry chiefs such as Volkswagen Group's Martin Winterkorn and Daimler's Dieter Zetsche.

McLaren P1 McLaren's P1 will compete with Ferrari's Enzo replacement

"The picture of the European market is pretty bleak to say the least, and it is difficult to see much in the way of positive news or growth potential moving forward," observes IHS Automotive analyst Ian Fletcher in a note.

For some carmakers, notably those that rely a great deal on the weakest markets, the situation is dire, but the pain is not shared equally between them. Others are doing well, enjoying healthy growth and economic performance.

Nissan executive Andy Palmer is not concerned about the health of the industry as a whole.

"The industry is Darwinistic by its nature," he reflects. "The strong will survive, the weak will die."

Greener cars

With such a focus on luxury models targeted at wealthy people who seem able to escape economic turbulence unscathed, along with ongoing fears that the plight of the masses will continue to depress sales of ordinary cars, it might be tempting to expect carmakers to have reduced their efforts to produce greener cars.

Toyota GT86 Open Toyota is one of a number of carmakers unveiling a new open top model

But in fact, there is plenty of "ongoing focus on CO2 reduction, high fuel efficiency and alternative powertrains", Mr Fletcher observes.

"There has been a flurry of announcements made by automakers in the lead-up to the show that range from styling concepts to production vehicles, many of which will focus on emissions reduction."

Land Rover, for instance, has been running trials with electric Defenders ahead of the show, Volvo is displaying a plug-in diesel electric hybrid, while Nissan is launching an electric Leaf with a longer range than its predecessor.

But perhaps the most notable "green car" news at the show comes from Volkswagen, which says it will put its ultra-efficient XL1 model into production at the company's Osnabrueck factory in Germany.

The car showcases how weight reduction has become a key feature for carmakers aiming to cut emissions and improve fuel economy, explains V Umamaheswaran, global marketing director, automotive, at Sabic.

Land Rover Defender Even Land Rover's no-nonsense Defender model could be going down the electric power route

The XL1 uses polycarbonate glazing coated in a scratch-resistant material, which is 30-50% lighter than glass, which helps keep the weight down, while also making it easier for carmakers to improve aerodynamics, he explains.

The XL1 combines a wide range of improvements that has wowed many in the industry.

"It will be the most fuel-efficient production car in the world with fuel consumption of approximately 313 mpg (0.9l/100km) and CO2 emissions of just 21g/km," according to Mr Fletcher.

You can follow Jorn Madslien's coverage from the Geneva motor show on Twitter @jornmadslien.

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