Carmakers Seem Deaf to Oil Price Signals in Geneva

The promoters of this year's event hail a show that is “greener than ever”, but there is scant evidence.

Published: 05-Mar-2008

The mood is one of no surrender at the Geneva motor show, even with crude oil topping $103 a barrel. This is an industry with the front half of its chassis perched on the edge of a precipice, but amid the raucous music, the shimmying models and the spotlit glare of Geneva's Palexpo, you might think that petrol was 50p a litre.

Take a stroll down the red carpet, cast an envious glance at the cut-glass styling of the Ferrari and Lamborghini models and lower your gaze in shame as you pass the military chic of the gas-guzzling Hummers. With sales shrivelling and losses mounting in America, the world's biggest market, manufacturers are looking east for salvation — to China, Russia and India. Renault has bought a stake in Russia's Avtovaz, the maker of the Lada.

However, for cars to sell in those Eastern markets, they must be cheap — and budget cars earn little profit. Meanwhile, Western governments want lower carbon emissions that bump up the technology bill and the manufacturers continue to resist. They could spend billions making zero-carbon cars, but for what return?

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