Paris Auto Show
The Paris Auto Show had its usual large number of new model introductions, along with dozens and dozens of displays of cars and light trucks already on sale around the world. Products from Audi, Toyota Motor Corp. (NYSE: TM) and Renault were particularly visible. Among all of the glitter there probably was not a single industry leader who did not complain that the worldwide auto business is in deep trouble. Not only are European sales plummeting, but China’s activity has flattened. That leaves U.S. sales, which have been unusually strong the past two years, but could begin to drop next year along with the American economy. Despite these problems, most press coverage of the event ignores the trouble and focuses on vehicles most people will not be able to buy. A sample of that coverage from The Los Angeles Times:
Jaguar used the 2012 Paris Motor Show to unveil its long-awaited F-Type convertible. So named to evoke memories of the car’s spiritual predecessor, the eternally gorgeous E-Type, this new two-seat Jag will take aim at the likes of Porsche’s Boxster/Cayman and possibly the 911.
It will interesting to see how many of those are sold.
Ongoing Worries About Spain
Global currency and stock markets continue to bounce around as the fight over the fate of Spain’s economy continues. Will its budget cuts be enough? Will it press for a huge bailout? The nation’s stock market lurches from huge gains to sharp drops. Even U.S. markets have been affected by nervousness about the southern European country. CNBC reports:
Spain is not out of the woods despite a well-received budget, with analysts and economists arguing that the budget is more important for easing the way towards a bailout than the measures itself.
Key proposals announced by the government on Thursday include cuts to ministries’ spending of 8.9 percent, more liberalization of the goods and services sectors, aimed at increasing domestic and external competitiveness, and a new independent body to monitor public finances.
China’s Economic Slowdown
Experts continue to weigh in on what will happen to China’s gross domestic product as the world’s economic expansion slows, or even moves into reverse. The most recent opinion from an important group comes from Goldman Sachs Group Inc. (NYSE: GS), which claims the GDP of the People’s Republic will grow at no better than 7% over the next decade. Reuters reports:
China’s economy is expected to grow at a much slower pace of about seven percent over the next decade, but its stock market still has the most attractive upside among “BRIC” countries, according to Jim O’Neill, Chairman of Goldman Sachs Asset Management.
“China is in the early stages of going from a long period where it was all about the quantity of growth, into an era where the focus is on the quality of growth,” O’Neill told a news conference in Singapore.
Douglas A. McIntyre