Luxury auto sector: crisis, what crisis?

Disregarding an industry-wide crisis, auto manufacturers are spreading on the luxury at the Frankfurt Motor Show that began Tuesday, with one example being a new blood-red Mercedes with 571 horses under the hood and gull-wing doors.

The SLS AMG roadster, which harks back to the mythical 1950s-era Mercedes 300 SL, will cost a princely 177,000 euros ($260,000) when it goes on sale next year.

It was designed before the auto sector hit one of its worst crises ever, AMG boss Volker Mornhinweg stressed.

The model was a hit Wednesday, with lovers of powerful cars pressing around it before heading to the Maseratis, Aston Martins and Lamborghinis with female models often planted next to them.

"These projects were created five, six or seven years ago when the economy was booming, when we thought personal wealth was a stable segment," IHS Global Insight auto analyst Christoph Stuermer said.

When the crisis erupted, it was too late to change.

"It costs more to eliminate a program than to continue it," noted Ferdinand Dudenhoeffer, a professor at the University of Duisburg-Essen.

All the new luxury models are supercharged, super luxurious and seem to come from a different era.

They range from Bentley's new Mulsanne to Jaguars or the latest Ferrari F458, which zips from zero to 100 kilometers per hour in 3.4 seconds and can hit 325 kilometers per hour with a seven-speed gearbox derived from Formula One racing.

It also spews out 307 grams of carbon dioxide for every kilometer traveled, well more than double the European Union target of 120 grams.

Although auto manufacturers have been forced by the global crisis to focus more closely on cars that cost and pollute less, the luxury market remains a hotly contested niche.

"It is not the golden age, but some people dare to again display their wealth" a year after the collapse of US investment bank Lehman Brothers," Stuermer noted.

"The luxury segment will rebound faster than that for normal consumers," Dudenhoeffer said.

While unemployment is expected to keep climbing next year, "investment bankers will make big gains, in particular with mergers and acquisitions," he said.

But even the luxury segment cannot be completely divorced from the greening movement seen everywhere at the show.

Many companies have sought to reduce the weight of their limousines and the fuel consumption of their engines.

Porsche, which many say lags behind in environmental innovation, has begun to develop petrol-electric hybrids, including its Cayenne sports utility vehicle on sale next year.

As soon as Wolfgang Duerheimer, head of research and development at Porsche, had expounded on the merits of the new SLS AMG, the head of Daimler quickly pledged to have an all-electric version by 2013.

AFP

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