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Automakers dismiss US weather fears, talk up Europe

A car is prepared ahead of the opening day of the 84th International Motor Show
Harold Cunningham I Getty Images
A car is prepared ahead of the opening day of the 84th International Motor Show

Car manufacturers at Europe's premier car show were confident the recent up tick in sales in Western Europe would continue, and dismissed weak U.S. sales as down to the severe weather.

Car makers have flocked to the Geneva Motor Show in Switzerland to display their latest models. For the first time in years, they have something to celebrate, as recent data points to a mild recovery in European car sales.

Most agreed however, that March would be a crucial month for the industry, demonstrating how strong the U.S. auto industry was without the snowy conditions, and whether Europe's recovery was for real.

"I think the most important thing is the psychological effect in the head of the consumers is changing," Audi CEO and Chairman Rupert Stadler told CNBC, after revealed Audi's latest TT model at the show.

"What we are seeing is in Western Europe is a stabilization," Stadler added.

(Read more: Car sales in euro zone periphery drive auto recovery)

In February, auto sales fell in France, but rose sharply in Spain. This followed a fifth consecutive month of rising sales in January, when 5.5 percent more new cars were registered in the European Union. There was an up tick in demand for cars in all major markets during the month, even in former crisis countries Portugal, Ireland, Italy and Greece.

The chief operating officer (COO) of Ford Motor Company said the firm was still making a loss in Europe, but had made some restructuring changes and hoped to be back in profit by 2015.

Nancy Hulgrave | CNBC

"The good news is, if you walk around the show today, no one is talking about it falling further. We're talking about what levels of growth we'll see," said COO Mark Fields.

(Read more: Massive storm aims for winter-weary US East Coast)

"We have realigned some of our manufacturing to reduce our costs. We are seeing some improvement in Spain and a little bit in Italy. The way the governments are going about the sovereign debt crisis – we are seeing improvements," he said.

These words of cautious optimism were echoed by Daimler Chairman Dieter Zetsche. He told CNBC: "This is not a big, steep recovery...but we think it is reliable now, unless we see major risks on a global basis having an impact."

"So we are planning for a decent recovery in Western Europe for this year. Not big numbers, but the right direction," he added.

However, icy conditions in the U.S. have dampened car sales in the country. Most automakers reported sales declines in February, and March is now tipped as the month that reveals the real state of the industry.

Zetsche was positive. "On the truck market, which typically is an early indicator, we are seeing very strong order intake since the end of last year, throughout January and February," he said.

"So we are convinced that we will see a decent recovery in the U.S. in 2014."

Audi's Stadler added: "They [U.S. car sales] will come back in March for sure, because January was a difficult month because of the snow situation in North of America, so we are not worried about it."

(Read more: A fortunate few in lackluster February auto sales)

U.S. consumers bought just under 1.2 million new cars and trucks in February, unchanged from a year ago. That followed a 3 percent drop in January — the first year-over-year decline since August 2010.

"The industry itself was about flat – I think a lot of that is weather-related. We think that March and April will be very big months and real barometers of where the industry is going to go," said Fields.

Luxury car makers immune?

Uneven sales in Europe and weak weather seemed to have little effect on the luxury car sector. The CEO of Rolls-Royce attributed this to the ever-increasing wealth of ultra- high net worth individuals.

Rolls-Royce unveiled a new version of its best-selling Ghost vehicle, launching the Ghost Series II. CEO Torsten Muller-Otvos told CNBC the Ghost was the, "backbone for the success stories we have generated over the last 4 years".

(Read more: Car buyers borrowing record amount)

"Some 80 percent of customers are entrepreneurs – people who are captain of industries, running entities, founding business, and they have chosen what I would call, 'The ultimate business tool,' for commuting from home to the office," Muller-Otvos said.

Three out of every four cars that Rolls-Royce sells is a Ghost, and the wealth of ultra-high net worth individuals is growing between 1 and 3 percent each year, Muller-Otvos said.

He added that the businesses of Rolls-Royce clients were changing. "It is IT business, it is very much finance business," he said.

By CNBC's Jenny Cosgrave and Kiran Moodley.

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