By William Boston
When the doors open at the Frankfurt Motor Show this coming
week, Europeans will get a glimpse of how technology and a historic
shift of wealth toward Asia have changed the global auto
industry.
The rise of China and other emerging markets is testing the
ability of the world's biggest auto makers to grow and adapt to
shifting demographics. The digitization of the automobile presents
car makers with opportunities to create new products and services,
but it also poses challenges that are shaking the industry.
As mechanical engineering gives way to computer-driven
innovation in the auto industry, the barriers to entry are falling
and it could become easier for new rivals--such as automotive
software startups like MobileEye Inc. or Silicon Valley tech giants
Google Inc., Apple Inc. and Uber Technologies Inc.--to grab chunks
of car makers' core business.
"It is certainly easier for Apple or Google to build an electric
car than it would be to build one with a combustion engine,"
Volkswagen Chief Executive Martin Winterkorn said recently. "I
definitely see a threat from new competitors."
That is why the car makers will use the biennial Frankfurt auto
fest to show off their mojo when it comes to developing attractive,
emotional automobiles packed with the latest technology.
The Germans, playing for their home fans, are pulling out all
the stops.
BMW AG will show off its new 7-Series sedan, its top-of-the-line
model that incorporates a blend of carbon fiber and aluminum
construction to lower weight. The sedan has features such as
gesture-control commands for its infotainment system and remote
control directed self-parking. BMW built a 400-meter test
track--the size of an Olympic running track--to allow visitors to
test drive its cars. Rival Audi AG has built its own temporary
exhibition hall to get more space. Mercedes-Benz will show off a
new sporty convertible version of its S-class, the leading ride for
executives.
One of the hottest rivalries that will unfold over the next few
months will be on display in Frankfurt, starring a car that won't
even be at the show.
American entrepreneur Elon Musk isn't planning to roll out the
Tesla Model X in Frankfurt, but the battery-driven sport-utility
vehicle that goes on sale this month has sparked a fierce response
from Germany's premium brands.
Audi, the luxury-car maker owned by Volkswagen, will unveil a
rival battery-driven SUV, a concept car that Audi says will have a
range of 310 miles on a single charge. Dubbed the e-tron quattro,
analysts expect the vehicle to debut as the Audi Q6 in 2018 and to
sell as many as 40,000 vehicles a year.
Audi's rivals BMW and Mercedes-Benz, which is owned by Daimler
AG, are believed to be working on their own "Tesla Killer," but
they haven't disclosed any details yet.
Nevertheless, Audi's launch shows that premium-car makers are
beginning to take seriously the emergence of Tesla as a formidable
challenger in the premium-car segment.
Meanwhile, SUVs continue to grow in popularity in Europe and are
expected to make up 27% of the new-car market by 2020, according to
IHS Automotive. There will be a number of SUV launches in
Frankfurt.
Ford Motor Co. will unveil a European version its Edge model, a
large SUV that will complement Ford's SUV lineup of the Kuga
compact SUV and the midsize EcoSport.
Volkswagen, Europe's biggest car maker by sales, will unveil a
revamped version of its Tiguan compact SUV. Citroën, the French car
maker that is part of the PSA Peugeot Citroën group, will launch
the "Cactus M." Citroën says the open-roof car was "inspired by the
surfer spirit," and it looks like a blend of the old Volkswagen
Thing and a crossover sports car.
The SUV is also continuing to move upscale.
Bentley, the ultraluxury car maker owned by Volkswagen and known
for its brand of conservative British luxury, will launch the
long-awaited Bentyaga SUV, which goes on sale in the U.S. at a
starting price of $229,100.
Jaguar will unveil the F-Pace SUV at the show, its first-ever
SUV. There are few details known about the car, but it is expected
to rival midsize sporty SUVs such as BMW's X4.
Other ultraluxury brands will roll out a number of new and
revamped models, such as the Rolls-Royce Dawn and facelifted
versions of Porsche's iconic 911 sports car. These cars reflect
continued demand for luxury goods, driven by the strong U.S.
economy and growth in Asia.
Industry executives come together in Frankfurt at time when the
European car market is producing the fastest growth world-wide.
China, long the anchor of global car sales, is weakening. Some
analysts say China's weakness is the beginning of an extended
period of slow growth or even a decline in car sales.
In Frankfurt, car executives will emphasize the positive. Car
and light-vehicle production is expected to grow about 2% this to
around 89 million vehicles. China remains on the path to producing
30 million cars a year in the near future.
Auto executives are still confident that the industry will soon
produce more than 100 million cars and light vehicles a year, Elmar
Degenhard, Chief Executive of auto supplier Continental AG, said in
an interview.
"It's just a question of how fast that will happen," he
said.
The Week Ahead looks at coming corporate events.
Write to William Boston at william.boston@wsj.com
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(END) Dow Jones Newswires
September 12, 2015 05:44 ET (09:44 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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