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[Auto show]

A number of important vehicles will debut Thursday and Friday in Paris. European carmakers: BMW's next-generation Mini and new 3-series coupe. Volvo's C30. Volkswagen's Iroc, a preview of the VW Scirocco. Audi's R8 supercar. Asian automakers: Lexus' LS 600h, the hybrid version of the LS 460. Nissan's Qashqai crossover. Is General Motors Corp. just going through the motions as it studies a possible tie-up with Renault SA of France and Nissan Motor Co.? What's on the agenda when GM CEO Rick Wagoner meets in Paris this week with Carlos Ghosn, CEO of Renault and Nissan? Is Ford Motor Co. getting ready to unload loss-making Jaguar? Car shows typically generate speculation and gossip because of the snug proximity of the world's leading auto industry executives and automotive press for a couple of days -- and this holds especially true of the Paris auto show opening this week. The events of the past three months show an industry at a crossroads, with automakers entertaining ideas that would have seemed unthinkable j
ust a year ago. Pressed by its most restive shareholder, Kirk Kerkorian, GM is looking into possibly joining a seven-year-old alliance formed by Renault and Nissan. Ford Motor Co. Executive Chairman Bill Ford Jr. appears to have staked out a position as a fallback, if GM chooses to terminate the study. This past summer, the chief financial officers of Ford and GM met to see whether there was anything that Detroit's two struggling giants could do together to speed their recovery efforts. "This has been a crazy year and it gets crazier by the day," said George Magliano, analyst with forecasting and consulting firm Global Insight. "The managements of the Big Three have said all bets are off." Some reports may be without substance but others may be trial balloons for plans under serious consideration, Magliano said. "Nothing's sacred, because, to varying degrees, General Motors, Ford and DaimlerChrysler are in dire straits." That has obliged GM's management to seriously examine the merits of Kerkorian's proposal
to bring the U.S. automaker into the Renault-Nissan alliance, one of the industry's most successful pairings, despite its mixed track record with foreign partners. Wagoner and Ghosn are scheduled to meet this week to assess the progress and findings to date of the eight teams assigned to study an enlarged alliance. The two sides said they would decide by mid-October whether to go further or abandon the idea. The high profile Wagoner-Ghosn meeting in Paris recalls a secret 1998 rendezvous during the Geneva auto show between Juergen Schrempp, then-CEO of Daimler-Benz AG, and Chrysler Corp.'s Bob Eaton. But whereas the industry was then in the throes of consolidation, automakers are now just as likely to be looking at possible divestments. Ford has put the tiny but prestigious Aston Martin nameplate on the selling block, and many investors hope the Dearborn automaker is reassessing its insistence on keeping Jaguar. German investors are once again wondering aloud whether the 1998 DaimlerChrysler deal makes sense.
DaimlerChrysler's efforts to wrest its Auburn Hills subsidiary out of the brutal competitive dynamics of the U.S. mass market have been dealt a serious setback. Chrysler is expected to lose $1.5 billion this quarter after being hit by declining demand for its trucks, SUVs and minivans -- proving that it all comes down to product. U.S. car sales are up slightly this year, while truck sales have weakened around 10 percent -- with demand for truck-based sport utility vehicles down sharply. A study issued Monday by consulting firm J.D. Power and Associates found that nearly one in five car shoppers cite poor gas mileage as a reason for rejecting a vehicle. "Although gas prices have begun to recede, new-vehicle buyers are likely to continue to be wary of volatile gas prices," said Jeff Zupancic, J.D. Power's director of retail research. In Europe, the segment under pressure is the family-size car category, called the D-segment. Over the past decade, it has shrunk from 23 percent of overall sales to 15 percent in 2
005. "This is particularly painful for mass-market brands such as Peugeot, Opel or Ford, which traditionally relied heavily on a D-segment product," according to a recent report from Deutsche Bank. "Due to the fact that sticker prices in this segment are traditionally high, this is very problematic for overall profitability," the report said. At the Paris show, which opens to the press on Thursday, Ford of Europe will unveil the stationwagon version of its Mondeo line of midsize cars. "The new Mondeo is critical to the Ford of Europe business," said John Fleming, president and CEO of Ford of Europe, based in Cologne, Germany. GM's Opel brand will show the next Antara crossover. GM and Ford have been restructuring their European operations. But as Robert Schulz, a Standard Poor's analyst, wrote in a report on Ford and GM last week, "automotive operations outside of North America are almost of little consequence in the near term, because of the magnitude of difficulties in what is by far GM and Ford's largest m
arket." Copyright 2006 The Detroit News. All rights reserved.

Paris Auto Show

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