Automakers scent recovery at Frankfurt IAA show

The world's auto industry said it believes it can smell the whiff of recovery in Europe as carmakers converged on Frankfurt Tuesday for this year's IAA auto show.

"I have the feeling that for our company and for the automobile sector as a whole, the worst is behind us" in Europe, head of French car maker PSA Peugeot Citroen, Philippe Varin, told reporters as the IAA prepared to open its doors to visitors on Thursday.

After contracting by 7.0 percent in the first half of this year, the drop in the market will be shallower in the second half, Varin said.

Norbert Reithofer, chief executive of the German premium car maker BMW, said he did not expect any upturn in Europe before the second half of next year.

"We'll be dealing with the crisis for the next three to five years," he said.

"If I'm optimistic, we could see a slight upturn in the second half (of 2014). But it could be longer."

And Stephen Odell, president of Ford Europe, told reporters there were "plenty of indicators that we're running along what looks like the bottom."

Asked whether the industry would ever be able to return to the peaks of sales of around 18 million vehicles seen in Europe before the crisis, Odell said: "'Ever is a long time. I think it will be difficult to see in this decade the industry running at the 18 million level."

Vehicle sales in Europe are currently running at about 13.5 million units a year, well below the 18 million unit sales rate in 2007.

The IAA is held in Frankfurt every two years in alternation with the Paris Motor Show.

And German Chancellor Angela Merkel is scheduled to officially open the show on Thursday.

It will run until September 22.

Experts, too, believe that after years of decline, automobile sales are stabilising and may even begin to rise again from next year.

The European market has "bottomed out and is stabilising", said Christoph Stuermer, analyst at IHS Automotive.

Stabilising sales "are a positive sign", agreed Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch-Gladbach.

"But the recovery will be slow," he cautioned.

"It will be years yet, if at all, before we can return to the levels seen in 2007".

In the seven months to July, a total 7.19 million new cars were registered in Europe.

Industry experts differ over the extent and magnitude of the upturn that is expected to materialise in western Europe.

While analysts at PwC are pencilling in a rise from 12.1 million cars in 2013 to 14.9 million in 2019, AlixPartners are much more pessimistic and are predicting stagnant sales in the region right through until 2019.

In addition to burgeoning sentiment in Europe, sales in China and the United States are robust, auguring well for the global car market, which is expected to grow by 3.2 percent in 2013 and 4.8 percent in 2014, according to analysts at Moody's rating agency.

As a result, "automakers should be sending out slightly more positive signals at the IAA", said Euler Hermes analyst Yann Lacroix.

"I believe the mood among automakers will be rather good at the IAA," said Stuermer at IHS.

For the IAA's 65th edition, carmakers, especially German ones, will be unveiling electric or hybrid models, with BMW to unveil its first fully electric car, the i3, as well as a rechargeable hydrid i8 sports car.

Volkswagen will show off its zero-emission e-Up! and the e-Golf.

French manufacturers will be there with the concept car Citroen Cactus, the new Peugeot 308 and the Dacia Duster redesigned by Renault. And Italy's Fiat will present the new seven-seater version of its 500.

Sports car enthusiasts will be able to gasp in awe at the Lamborghini Gallardo LP570-4 Squadra Corse, a limited series with 570 horsepower, or the Porsche 918 Spyder with close to 900 horsepower under its bonnet.

Another focus at this year's show will be the connected car, which is capable of communicating with other cars and with the outside world.