Wednesday, March 2, 2005

Martial Trezzini / Associated Press Hostesses pose next to the the all-new Chevrolet Matiz.

2005 Geneva Motor Show

U.S. car brands ready assault on Europe

By Michael Ellis / Reuters

Copyright © 2004 Reuters Ltd. Click for Restrictions.

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GENEVA - American car brands, from Chevrolet and Dodge to Cadillac, are launching a new assault on the European market with fresh models that are better suited for Europe's narrow, twisty roads and high fuel prices.

Though many Europeans dislike U.S. foreign policy, they'll love the bold American styling and high performance of American cars, executives with the companies said at the Geneva auto show said this week.

Even General Motors Corp.'s Hummer brand, whose oversize sport utility vehicles draw their heritage from the U.S. military, expects a good reception to its new H3 mid-size SUV, which goes on sale late this summer.

"One thing Europeans say about a brand like this is: 'Only in America'," said Hummer General Manager Susan Docherty, told Reuters at the Geneva show. "Europeans like being associated with brands that fulfil American dreams."

With industry sales stagnant in the United States, GM and Dodge parent DaimlerChrysler AG believe they can grow their brands in Europe from minuscule amounts currently, but only by offering vehicles suited to European tastes.

Recognising that more than 90 percent of the vehicles sold in France, Italy and Spain have a manual gearbox, the Hummer H3 will be GM's first mid-size SUV equipped with a five-speed manual. A diesel engine will also be offered as an option in the future.

Dodge's brash American styling, exemplified by the Le Mans-winning Viper sports car, appeals to Europeans, said Dieter Zetsche, Chief Executive of DaimlerChrysler's U.S. group, including the Dodge, Jeep and Chrysler brands.

"Dodge is the most American of our brands. I believe there's a significant niche of customers that like the expressive styling, bold, in-your-face attributes of Dodge," Zetsche said.

To illustrate Dodge's bold attitude, Zetsche swung an electric guitar, shattering a pane of glass to reveal the Dodge Caliber small car at the Geneva auto show.

Zetsche said he expects the Dodge, Chrysler and Jeep brands to double their market share in Europe to 1.4 percent from about 0.7 percent last year, and increase sales to about 120,000 from about 90,000 last year.

"The Caliber will be an important part contributing to that," Zetsche said.

All the brands have the same goal -- to establish a beachhead in Europe and become a truly global marque -- but are executing their plans in very different ways.

Dodge and Hummer plan to import their vehicles from the United States, currently an advantage because of the weak American dollar to the euro.

Chevrolet may be among the most American of brands, but Americans would recognise few of its cars in Europe. GM plans to expand the mass-market emblem by shipping vehicles from its joint-venture company GM Daewoo in South Korea.

With the new Matiz compact car shown in Geneva, Chevrolet wants European sales to grow past 200,000 this year, up from 190,000 last year or 1 percent of European market share, said Chevrolet Europe chief Erhard Spranger.

Conversely, GM will build the Cadillac BLS luxury mid-size sedan at a plant in Sweden. The BLS, unveiled in Geneva, is smaller than any Cadillac sold in the United States and will be the first Cadillac with a diesel engine.

The BLS will help Cadillac increase its European sales to 20,000 by 2010 from 2,196 last year, Cadillac General Manager Jim Taylor said.

But even Cadillac, which builds the U.S. presidential limousine, will have trouble growing in Europe, said Joe Greenwell, chairman of the British brands Jaguar and Land Rover, owned by Ford Motor Co..

He noted that Toyota Motor Co.p.'s Lexus brand, whose bullet-proof quality has made it the best-selling luxury brand in the United States, has struggled in Europe.

"It's damn competitive in Europe," Greenwell said. "There's some fairly capable brands over here. Just take a look at the BMW and Daimler stand," he said, gesturing to the auto show floor.

Additional reporting by Nicola Leske