- The Washington Times - Thursday, September 28, 2006

PARIS (AP) — Beleaguered European and U.S. carmakers introduced ambitious new designs and strategies at the Paris Motor Show yesterday to combat rising costs, flat home markets and ever-tougher competition from Asian rivals.

The 2006 show finds manufacturers on both sides of the Atlantic cutting jobs, closing higher-cost plants and scrambling to revamp aging model ranges as they try to catch up to the profitability and growth of competitors like Japan’s Toyota Motor Corp. and Honda Co.

On their home turf, French automakers gave new momentum to an attempted push by Europe’s largest carmakers into luxury market segments — until recently the domain of upscale German and Italian brands.

Renault SA presented a prototype sport utility vehicle called Koleos and a sporty concept car, Nepta. Chief Executive Officer Carlos Ghosn said the cabriolet’s design offered a hint of the eight high-end models the company plans to introduce by 2010, starting with a new Laguna sedan.

Another Renault prototype revealed the smarter features of the new Twingo, to debut next year. The once-popular supermini has steadily lost ground to newer rivals like Toyota’s Yaris. A new, sporty 1.8-liter Yaris was among Toyota’s show offerings, and Honda introduced new versions of its Civic sedan and CR-V compact SUV.

Citroen excited the crowds with its C-Metisse, a sleek coupe prototype powered by a hybrid diesel-electric engine of the kind that will equip vehicles available from PSA Peugeot-Citroen SA’s stable around the end of the decade.

DaimlerChrysler AG, a mainstay in the upscale market through its Mercedes-Benz brand, showed off new high-performance CL63 and S63 AMG models along with a silver, sleek SLR McLaren 722.

Mercedes is recovering from a weak patch, when business was undermined by quality and reliability concerns, and global unit sales for January through August were 11 percent higher than a year earlier.

“We have worked hard and achieved a great deal — and now we are reaping the benefits,” Chief Executive Officer Dieter Zetsche said.

DaimlerChrysler’s micro-carmaker, Smart, showed off a revamped version of its peppy two-seater model that is ubiquitous in European cities but will not be available in the United States until 2008.

Hybrids and alternative-fuel vehicles were out in force.

The German group’s Chrysler unit, which includes the Jeep Cherokee and Grand Cherokee brands, surprised investors earlier this month by saying it would more than double its expected third-quarter operating loss to $1.5 billion, amid weakening U.S. sales of four-by-fours.

By contrast, Europe’s smaller SUV market segment so far is shrugging off higher fuel prices to show strong growth.

“As the industry gets more global they’re really running up against geographical preferences,” said Rebecca Lindland, an auto analyst with Global Insight.

Presenting a new show car, the Dodge Avenger sedan, Chrysler Group said it now expects full-year unit sales to fall instead of remaining stable as previously forecast, after posting a 10 percent decline in the first eight months of the year.

Toyota, which was the first major carmaker to enter the hybrid market with the popular Prius, presented its LS 600H, a luxury sedan powered by a hybrid V-8 engine — another first.

Ford Motor Co. showed off a concept car that foreshadows the next generation of its new Mondeo, available in Europe from late 2008 — an example of the company’s new “kinetic” design aesthetic that gives an impression of speed even when standing still.



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