What did we learn from Frankfurt?

What did we learn from Frankfurt?

Friday, 29 september 2017 | Redacción CEU

Along with Geneve and Paris, Frankfurt hosts one of the most important European shows in the automotive sector. These types of events are more than a place where new prototypes can be discovered. They give us an overview of what the main automobile firms are concerned about, how they are working and where the motor world market is heading to. That is a complete entrance hall to the future that awaits on four wheels. What did we discover in the sixty-seventh Frankfurt edition?

A space with 230,000 square meters, hundreds of stands with representation from 39 countries, more than 1,000 accredited journalists and close to one million visitors. The International Frankfurt Motor Show, known in German as Internationale Automobil-Ausstellung –IAA–, annually alternates with Paris, the celebration of one of the most important and prestigious motor events in the world. Its early autumn date makes it a perfect setting for brands to make public the models that go on sale next year. Frankfurt is not only a space for showing the new trends to the press or making car lovers green with envy, it is the perfect place to take perspective and get to know what the automotive market wants and where it is heading to.

The Frankfurt Motor Show's lessons

Walking between the stands of the German event offers a panoramic view of the automotive sector condition. This is a summary of some of the important lessons that we learned in the German biennial:

The great absences

Alfa Romeo, DS, Fiat, Jeep, Mitsubishi, Nissan, Infiniti, Peugeot and Volvo. These brands represent the 20% of car sales in Europe, they are also the firms that have decided not to attend the celebration of this new Frankfurt Motor Show edition. Last year, Paris also had notable absences: Ford, Volvo, Mazda, Lamborghini and Aston Martin. Do they not have new models to exhibit? Do they not like Frankfurt? Are the shows becoming obsolete? What can motivate to the disappearance of some brands in this event?

Some firms are beginning to question the return of investment of these international events. The costs that automobile companies assume when they come to these shows are very high. Increasingly, brands are considering to use other formulas for publicizing their new models. They have realized that they can improve their profitability by performing smaller and less expensive acts like calling the press to their own exhibitions or conducting digital campaigns to present their vehicles to the masses. In fact, the Internet is a great showcase to display the future cars to their potential customers.

While Las Vegas and Shanghai are competing as new car scenarios, the interest for attending to these automobile appointments is reduced. Some firms opt to choose between the exhibitions and only go to one of them to reduce the economic effort to face. Of course, behind the brand decisions to distance themselves of these events, other issues weigh, like the lack of prototypes to show, a bad financial situation, the restructuring they are carrying out or a different marketing strategy.

What did we learn from Frankfurt?

China hits the gas!

The Asian giant bets strong on Frankfurt. German firms, followed by Japanese and Korean, still totally control the territory, but China is increasingly strong in such meetings. It is not surprising, considering that the country has gone from occupying the last positions of the ranking, to consolidate itself as the largest world automobile market with 26 million vehicles per year. The recent announcement by the Chinese government of putting an end to the production and sale of automobiles that use fossil fuels in the near future positions the country as a key guide in the world electric panorama of the next years.

China could lead the electric sector change. Perhaps that is the reason why the country wants to land in the European market. For example, the Chery's compact crossover, Expeed TX, opens and explores this path. The Asian company wants to conquer the western masses with an SUV, as the trend dictates, that adapts to both aesthetics and the European concept. Everything indicates that in the following automotive events China will have a bigger presence.

An electric and autonomous present

'New Mobility World' is the motto that one of the Frankfurt pavilions recited, the sustainable mobility subject becomes important. The fact that the automobile future is electric, is more of a certainty than a prediction. It is no longer so easy to find diesel models in the stands of the European show. All brands offered alternative strategies and proposals for fossil fuels to combat CO2 emissions. The 'dieselgate' bad press, the new regulations about vehicle circulation in some European cities or the demand increase are some of the reasons that have propitiated this electrical impulse.

Electric cars are already on the street, they are more a matter of the present, than of the future. In fact, many brands that exhibit these prototypes in Frankfurt will soon be selling the version that anticipates them –models like the Volkswagen I.D., SUV I.D. Crozz and the I.D. Buzz-– But the brand goal is not only focused on reducing emissions, automobile firms also want to increase the autonomy of their cars. Although electric development is making progress at a better pace, the work on self-driving cars does not stop. The German biennial showed vehicles that are proof of this: Audi Aicon, BMW i Vision Dynamics, Honda Urban EV Concept, Renault Symbioz and Smart Vision EQ ForTwo.

The autonomous cars have a comfortable and spacious design focused on the enjoyment and relaxation of their occupants, facilitating any type of action other than driving. It is a different future, but close. Like the Director of the Master in Management of Automotive Companies of the Institute for Advanced Management, José Manuel Garaña, predicts:

<<The car will be an extension of people's daily activity. I will have the same connectivity, the same entertainment, the prominence of new energies and new ways of understanding the possession of things. It will be a "utility" rather than a possession. The car must adapt to the society demand and not vice versa. An exciting journey awaits us>>

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