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Car Makers Turn to New Technology, Models to Fight Europe Slump

Thursday, 27 Sep 2012 | 8:55 AM ET

Car makers are hoping to battle a global downturn and Europe’s debt crisis with a series of new models and technologies at the Paris Motor Show this week, in the expectation that it will help boost flagging sales.

Creativ Studio Heinemann | Getty Images

Auto companies are looking to attract consumers not only with revamps of classic brands but by injecting some novelty as they battle severe headwinds. Car sales have slumped to their lowest in 15 years in Europe, according to the European Automobile Manufacturers’ Alliance(ACEA).

Luxury brand Bentleyis looking to return to racing and increase market share, while Audi is looking to attract new, younger consumers—not through cutting edge design and appearance—but by the technology inside its latest A3 model.

Audi Chief Executive Rupert Stadler said the company was hoping to incorporate social media in its cars to appeal to younger consumers.

“The younger generation is always connected with each other, so we tried really to come up with [a car] with Wi-Fi hotspots, Twitter and Facebook in the car. By voice recognition you can receive your email…this is what young people want to hear and see,” he said, denying that the target audience would be hard pressed to afford such a car as youth unemploymentin Europe rises (link).

“The situation in Europeis a little more difficult than before and a lot of young people are unemployed,“ Stadler conceded. “But nevertheless, they will come back.”

Stadler’s confidence about the future of the automotive industry was shared by other car makers CNBC spoke to in Paris on Thursday.

Jaguar-Land Rover, part of India’s Tata Motors, launched the F-type, a replacement to the two-seat roadster called the E-type which was phased out almost 50 years ago.

Chief executive Ralf Speth told CNBC that the company’s sales were up 40 percent from a year ago and the company was confident despite a generally beleaguered market.

“We are cautiously optimistic overall…Demand for our cars is very strong around the world. Emerging markets are still leading the growth rate but also the traditional, industrial countries are very strong.” Indeed, Speth said that the F-Type complemented the company’s history.

“Jaguar has a very interesting heritage in sports cars so…we [wanted] to have a sports car in our product portfolio… What you can see now is the best of British design, engineering and manufacturing.”

Volkswagen (VW) Chief Executive Martin Winterkorntold CNBC that company had high hopes for 2013 as it launched the seventh generation of its best-selling Golf.

“2013 will be a very ambitious year, especially here in Europe,” he said, adding that VW believed in Europe—a continent in which VW manufactures twelve brands of cars across seven countries, employing 390,000 people.

“VW is very much investing in Europe,” he said, alluding to the car maker’s strategy of accumulating brands such as Bentley, Lamborghini and Porsche in order to become the number one car maker and retailer by 2018.

“We have invested in Spain, in Italy and in the U.K, at Bentley,” he said. “We stand strongly behind Europe.”

— By CNBC.com's Holly Ellyatt

Contact Europe: Economy

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