Automakers gearing up for Europe’s biggest annual car show in Geneva, Switzerland, are celebrating the end of the sector’s crisis as European sales have returned to levels last seen in 2008.
However, a dark cloud has gathered over the outlook because of emissions scandals, especially involving European market leader Volkswagen AG, and the road to recovery would be paved with unprecedented efforts to fight auto pollution, involving equally unprecedented costs.
“Solutions are more and more expensive,” said Marc Charlet at Mov’eo, an automotive and mobility research network. “There is much at stake here, and the competition is fierce.”
Photo: AP
European rules for combustion engines were always going to become more stringent, but Volkswagen’s emissions cheating, the industry’s biggest pollution scandal to date, has turbo-charged regulators’ eagerness to crack down on pollution.
Sales of cars with cleaner alternative technologies are still only marginal, with electric cars accounting for just 1.2 percent of new vehicle sales in the EU in 2015, the European Environmental Agency said.
Automakers are now having to steer toward engines that emit no more than 95g of carbon dioxide per kilometer by 2021 to meet European requirements, compared with 130g in 2015.
However, as diesel cars have been getting a bad rap because of emissions scandals, that target looks harder to meet. That also means gasoline-powered cars have to take up the slack, requiring the industry to squeeze more efficiency out of engines and to reduce vehicles’ weight.
If they do not achieve the goals, the bill would be high.
Automakers failing to meet the carbon dioxide targets — capping petrol consumption to 4.1 liters per 100km and diesel to 3.6 liters per 100km — will have to pay 95 euros (US$100) for every extra gram of carbon dioxide emitted by each car — potentially adding up to tens of millions of euros of fines.
“We will have to look for grams to save in every part of the car, particularly in components,” said Guillaume Devauchelle, head of innovation and research at parts maker Valeo SA.
This includes air conditioning, second only to the engine for energy use, electric compressors, self-starters, right down to light bulbs.
Meanwhile, every weight gain of 12kg translates into 1g of carbon dioxide saved. Better electronics and aerodynamic designs would also help.
Research and development costs “have practically doubled in the past decade,” said Remi Cornubert at consulting firm AT Kearney Inc, adding that half of the increase was forced on automakers by regulators.
“The car of the future will be significantly more expensive to design and to build,” said Guillaume Crunelle, auto expert at the Deloitte consulting group.
Executives needing a break from nagging worries about rules and money can always take time to enjoy the glamor for which the Geneva show is famous.
The legendary Ferrari NV, Lamborghini SpA, Pagani SpA, McLaren and Bentley Motors Ltd have picked Lake Geneva’s shore to present new models.
Renault SA is to showcase the final version of its Alpine A110 sports car.
However, the greatest buzz may come from so-called “crossover” vehicles, which combine features taken from sports utility vehicles with those of passenger cars.
The segment, including fashionable urban four-wheel drive vehicles, makes up about 30 percent of the European car market and features the Volvo XC60, the Citroen C-Aircross, the DS7 Crossback and the Land Rover Velar.
At least 180 companies are to be present at the 10-day show, which opens to the public on Thursday after two press days, during which most major corporate announcements are expected.
Last year’s show attracted 687,000 visitors.
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