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Originally published Tuesday, March 4, 2014 at 6:46 PM

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Ukraine crisis a worry for European carmakers

The European car market has been counting on a modest recovery from a six-year contraction, but tensions in Ukraine have a cast a shadow on its hopes at the Geneva International Motor Show.


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GENEVA — Growing tensions over Ukraine have raised the specter of another slowdown in the European auto market, just as carmakers were beginning to count on a modest recovery from a six-year contraction.

Russia’s intervention in Ukraine has raised the possibility of sanctions against the country, which has been a key growth market for recession-battered European automakers.

At the Geneva International Motor Show on Tuesday, executives cast a wary eye toward the crisis.

“There is not a single doubt in my mind that if the situation in Russia and the Ukraine remains as tight as it is, or if it worsens from where we are, that it will dampen demand in western Europe,” said Fiat Chrysler Automobiles CEO Sergio Marchionne.

Barring a full-blown crisis over Ukraine, Marchionne says he expects to see a modest recovery, but mainly led by “extraneous factors” like fleet sales and not consumer demand.

Before the Ukrainian crisis began, analysts predicted European car sales would grow by 2 to 4 percent — which is still 3 million vehicles off the 2007 peak.

“There is always going to be a surprise out there. Ukraine is an example. You have to be flexible,” the CEO of Ford Europe, Stephen Odell, told journalists on the Geneva auto show’s media day.

The show still has plenty to offer for the world’s richest consumers, who will soon have a wealth of choices: the latest Lamborghini, Ferrari or maybe even a McLaren.

Several new supercars, vehicles costing more than 100,000 euros ($137,000), are vying this week to upstage one another at the Geneva auto show.

The wave of horsepower-heavy models, including Bugatti’s 2.18 million-euro Rembrandt, on display at the show underscores the return of performance cars after years in which some producers held back.

Lamborghini headlined the trend by debuting the 610-horsepower Huracan, which replaces the $181,900 Gallardo — the Volkswagen AG unit’s all-time best-seller.

“We believe that now is the right time for a new model,” said Stephan Winkelman, head of the Santa’Agata Bolognese, Italy-based carmaker. “We are very proud of this car. I don’t see any competitor.”

Ferrari may beg to differ. The Fiat SpA unit lifted a red shroud from the 560-horsepower California T, which accelerates to 100 kilometers (62 miles) per hour in 3.6 seconds. Reflecting the effort to improve efficiency even for elite racers, Ferrari boasted that it reduced the model’s emissions by 20 percent versus the $198,190 predecessor.

“I like competition, particularly when we win the competition,” Ferrari Chairman Luca Cordero Di Montezemolo said in an interview.

Sales in Europe of high-end sports cars will likely rise this year for the first time since 2010, IHS Automotive estimates.

Global deliveries may increase to 15,200 in 2018, 14 percent above 2014 sales, helped by the Huracan, California T and other new models in the pipeline, IHS forecasts.

“Supercar-makers are heavily investing to keep up the pace with a growing market,” said Gian Primo Quagliano, head of automotive-research company CSP in Bologna.

Lamborghini had more than 1,000 orders for the Huracan, even before the media day Monday.

British sports-car maker McLaren unveiled coupe and topless versions of the new 650S, which is promoted as a supercar.

Andy Goss, group sales director at Jaguar Land Rover, said global demand for upscale vehicles “still looks very strong and there’s no sign of that dissipating. We’ve got more sales opportunities than supply.”

Compiled from

The Associated Press

and Bloomberg News



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