By Rupert Steiner
A bit of wax and polish is all it usually takes to give Europe’s automobile makers a sparkling shine as they gather at the Geneva Motor Show.
It is one of the most important events for the industry — a platform for top bosses to evangelize about what they have developed.
Not this year.
Car makers are facing a perfect storm of trade tariffs, slumping demand in the crucial Chinese market, and a backlash against diesel, which are together having a seismic effect on businesses.
A shift toward electric and autonomous vehicles has not helped. They require vast investment and a different way of thinking, which means the corporate grins have been replaced with a collective grimace.
“The industry is going through a one-in-a-hundred-years change,” Johan van Zyl, president and chief executive of Toyota Motor Europe /zigman2/quotes/200537742/composite TM +0.17% , told MarketWatch. “We are facing many, many changes from a vehicle point of view, from a customer change point of view and from a broader environmental point of view.”
The automobile industry provides jobs for 12 million people and accounts for 4% of the European Union’s GDP.
This was parroted by Andy Palmer, chief executive of Aston Martin Lagonda /zigman2/quotes/201272201/delayed UK:AML -1.84% , who told MarketWatch: ‘I can’t remember going into a Geneva where the auto industry has been quite so gloomy.”
Things are so bad Jaguar Land Rover, the U.K.’s largest car manufacturer, didn’t even bother to turn up, and Ford Motor Co. /zigman2/quotes/208911460/composite F -0.08% stayed away, as did Volvo, Tesla /zigman2/quotes/203558040/composite TSLA +0.13% and struggling General Motors /zigman2/quotes/205226835/composite GM +0.17% .
The automotive industry is crucial to Europe’s economic prosperity. The sector provides jobs for 12 million people and accounts for 4% of the EU’s GDP.
But on Tuesday the Society of Motor Manufacturers and Traders (SMMT) reported that February saw a continued decline in diesel sales in the U.K. There was a 14.3% year-on-year drop, taking the share of cars powered by diesel in the U.K. market down to less than a third at 29.6%.
In 2018 sales of new cars fell at their fastest rate since the 2008 downturn, and last month the SMMT said used-car sales had declined 2.1% in volume terms for 2018.
The European Automobile Manufacturers Association also sounded an alarm that car production on the European continent had decreased by 1.7% for 2018.
Jobs are at risk at Ford, Jaguar Land Rover, Peugeot owner PSAand Honda /zigman2/quotes/207173990/composite HMC +0.26% as everyone scales back and restructures.
So what’s at the center of the crisis?