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Last Updated: Thursday, 23 September, 2004, 08:58 GMT 09:58 UK
Paris gears up for motor show
By Jorn Madslien
BBC News Online business reporter at the Paris Motor Show

V12 Vanquish S
A whopping 520 bhp...the Aston Martin V12 Vanquish S
As the automotive industry shows a string of new, powerful cars in Paris, much of the focus is on their environmental impact and the disastrous industrial relations that are unbalancing many car companies.

According to the organisers, there will be more than 60 world premieres at this year's Paris Motor Show.

In reality, many of them are merely relaunches of old car models, only this time with much bigger engines.

This latest craze seems to hint at an astonishing lack of awareness by global car manufacturers about the effect current high oil prices have on drivers' appetite for big gas guzzlers.

It is becoming increasingly clear to many in Paris that governments object to big gas guzzlers as well.

These cars - in particular Sports Utility Vehicles (SUVs) - are bad for the environment and should be banned - at least that has been the battle cry for months from the show's host city Paris. The call has sparked similar calls by others, most notably the Swedish government and London mayor Ken Livingstone.

Truly mad

But at this stage, it is obviously too late for the car makers to revise their product launches.

BMW M5 at the Paris Motor Show
The M5 supercar - just another BMW?
The show must go on, and the British sports car maker Aston Martin takes the lead with its Vanquish S - where the S represents an additional 60 bhp in the V12 engine when compared with previous Vanquish models, bringing the total to a whopping 520 bhp.

The independent carmaker BMW is also in on the act with its relaunch of the M5 supercar. Never before has the Bavarian brawler come up with such a powerful machine, yet revolutionary it is not - despite its V10 engine.

The car is good, perhaps even super, but by no means jaw dropping in its design. It is just another BMW, and as a brand it is becoming increasingly common - perhaps a victim of its own success?

For those who are truly searching for power with image to match, there is the new F430, the replacement for the bestselling Ferrari 360 Modena.

And for the truly mad, there is Volkswagen Group's new Bugatti Veyron supercar, or its marginally less spectacular Lamborghini Murcielago Roadster.

Green alternatives

But this is Europe, and here pulling power is not quite as raw as it can sometimes seem in the USA.

This could go some way to explain the softly-softly approach taken by Volvo, Aston Martin's fellow member of Ford's Premiere Automotive Group.
Paris Motorshow poster
More than 60 new launches are expected at the Paris Motor Show

Volvo is here to show off its already popular XC90 Sports Utility Vehicle (SUV), only this time with a massive 4.4 litre V8 engine which will put the by now rather defensive Swedish car maker firmly in several European governments' bad books.

This is despite Volvo's insistence that it is not as bad as it sounds since this car's engine is cleaner than other V8s.

For green drivers, that is simply not good enough, given that Toyota's luxury subsidiary Lexus is showing off its RX400h petrol/electric hybrid SUV.

True, it will not be quite as powerful as the Volvo but it will be considerably cleaner and much cheaper to run.

Sales efforts

Marketing is also high on the agenda at this year's show.

Both the major US automotive groups Ford and General Motors have recently announced that their marketing budgets will rise by between a third and a half in the months ahead.

General Motors is showing off its first re-badged Daewoo cars.

The GM unit hopes Daewoo sales will soar, perhaps even double, once it has slapped a Chevrolet badge onto the cars.

Sceptics suggest the move could backfire, so rather than attracting European customers it could instead alienate Chevy buyers back home.

Angry workers

Underlying all the carmakers' product strategies lies the hurdle of rapidly rising costs, reflecting the historically high energy costs and the rising cost of raw materials that go into cars.
Volvo XC90 V8
Volvo's first V8 is expected to appeal to US customers

As is often the case with any manufacturer; when one cost is rising others will have to fall in order to maintain profit margins, or in the case of many car makers; to cut losses.

So job cuts are on the cards.

Earlier this week, General Motors said it would reduce output at its European car factories, including Saab in Sweden and Opel in Germany. About 3,000 jobs could be lost as a consequence.

The news came hot on the heels of news that 1,150 jobs are set to go as Ford wields the axe over its luxury car making unit Jaguar in the UK.

Such orders from America are not going down well among the giants' European subsidiaries, and as a consequence the automotive groups will be forced to spend much of their time at the Paris show defending their decisions.

Any attempts to shift attention away from troubled industrial relations within the industry are unlikely to be successful.

The BBC's Mike Johnson
"Jaguar's well-charted troubles have cast a shadow over their presence in Paris"

'Good start' to Jaguar campaign
22 Sep 04 |  Coventry/Warwickshire

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