Concept cars gleam, but executive dread clouds Frankfurt Auto Show

A global downturn, technology shifts putting unprecedented pressure on automakers.

Business Standard : Car executives are paid to be optimists, but behind the pomp and salesmanship at the Frankfurt International Motor Show this week lurked an unmistakable sense of angst.

The talk among industry insiders at the show, one of the auto industry's biggest events, reflected the existential threats that carmakers face.

The European and global auto markets are in decline. Carmakers are betting their futures on electric vehicles whose marketability is untested. Manufacturers are under intense public and regulatory pressure because of the role that vehicles play in climate change. The global trade war has disrupted supply chains.

Even auto shows are under threat. Many manufacturers scaled back their presence in Frankfurt this year or skipped the show altogether. Companies like Toyota and Fiat Chrysler decided the benefits didn't justify the millions of euros it takes to put on a display.

"It's an unprecedented situation we are in," said Wolf-Henning Scheider, chief executive of ZF Friedrichshafen, a German transmission maker that has an extensive network of factories in the United States, Europe and China.

Mr. Scheider noted that carmakers must invest vast sums in electric vehicles and autonomous driving at the same time they are coping with a trade war. "All these at the same time is new," Mr. Scheider said in an interview. The Frankfurt show was as good a place as any to find out how auto executives plan to survive the tsunami. Here are some of the main takeaways.

Sustainability has become a matter of survival

Protests by environmental groups were especially intense this year, as carmakers increasingly take the blame for climate change. Volkswagen alone accounts for more than 1 percent of greenhouse gas emissions worldwide, according to the company's own calculations.

This week Greenpeace activists stood on the roofs of SUVs on display at the Frankfurt exhibition grounds with signs that chided, “Climate Killer.”

The militant group Attac planned to blockade streets and bring traffic to a standstill on Saturday, the day the show opens to the public. Carmakers are desperate to show that they get the message. Ola Källenius, chief executive of Daimler, said in Frankfurt that the company's Mercedes-Benz factories will be carbon neutral next year.