Autos ready to shine anew

Still, industry executives and analysts remain apprehensive. "The question is," said Jurgen Pieper of Bankhaus Metzler, "how fast will we recover? Will there be stagnation?"

In the United States, Germany, France and other countries that stoked demand by offering cash for clunkers, analysts say recent sales gains may have been pulled forward from next year.

Germany, which alternates with France in hosting the Continent's biggest car show, may experience a rough hangover after its generous $7 billion cash for clunkers program this year.

IHS Global Insight predicts German passenger car sales will increase to 3.6 million by the end of the year, from 3.1 million in 2008, but plunge next year to 2.75 million. As a result, total western European sales are expected to be lower in 2010 before rebounding in a recovering economy.

By contrast, the more modest $3 billion clunker program in the United States, which offered consumers up to $4,500 to trade in their gas-guzzler for a more efficient model, is expected to slow the upward trend, but not reverse it. IHS Global Insight's revised U.S. forecast has light vehicle sales rising to 11.1 million from around 10.3 million this year.

Detroit shows effects

While all regions suffered from what Bank of America-Merrill Lynch describes as the industry's worst slump in 30 years, Detroit's automakers may have been hit the hardest.

This year, General Motors Co. comes to Frankfurt as a slimmer company after agreeing to sell control of its German carmaker Adam Opel GmbH to a group led by Canadian supplier Magna International Inc.

GM's Swedish brand Saab is up for sale, as is Ford Motor Co.'s Volvo Cars. Chinese automakers are circling both automakers, signaling the rise of manufacturers from emerging markets.

Russia's OAO GAZ Group is expected to end up with a stake in Opel. Magna's partner, state-controlled Sberbank, is expected to take a 27.5 percent stake in Opel and transfer that to GAZ.

Deutsche Bank analyst Gaetan Toulemonde spent a few days last week in London. He said he was struck by the improvement in the atmosphere, "like after a big storm."

People feel that the worst is over, he said. But the industry still faces challenges, such as the costs of developing technologies to meet strict emission standards and the prospect of a slow recovery in consumer demand.

Merrill analyst John Murphy said he did not believe the U.S. auto market would reach its last sales peak of 17.4 million vehicles during this business cycle.

Sergio Marchionne, chief executive of Fiat SpA and Chrysler Group LLC, and Carlos Ghosn, CEO of Renault SA and its partner Nissan Motor Co., say the industry needs to consolidate.

Fiat took control of Chrysler after its emergence from bankruptcy, and proposed to bring Opel into the mix. While analysts found his plan attractive, German politicians wanted to protect jobs.

Instead of a consolidation with the aim of lowering the industry's cost per vehicle, "we're seeing the opposite happening," said Toulemonde.

Saab and Volvo are likely to end up as small, lone players, as will Opel. "We have more players now," Toulemonde said. "It's going in the wrong direction."

Plugging in

At the show's press preview beginning Tuesday, Renault plans to bolster its claim to being a leader in the quest to make zero-emission cars. It will unveil four electric vehicles.

Among the concepts, BMW will show a plug-in diesel electric hybrid sports car, while Toyota Motor Corp. will display a plug-in version of its Prius hybrid. Two of the most important models making their debut are compact vehicles from Ford and soon-to-be GM affiliate Opel: the Ford C-Max and Opel Astra.

Competing in the largest segment of Europe's car market, past Astras notched up about half a million sales a year.

The new Astra shares underpinnings with GM's other compacts, including the Chevy Cruze coming to the United States next year. The Astra became a symbol of GM's dilemma as it sought a buyer for Opel; the German carmaker developed the architecture for all GM compact and midsize cars under GM's global product development system.

Similarly, the C-Max is the first vehicle built on a compact platform that will serve as the foundation for the next Focus and other compacts. A version of the C-Max will be added to Ford's U.S. lineup in 2010.

South Korea's Kia Motors will unveil a Venga city car and a new Sorrento SUV.

Volkswagen AG's premium brand Audi launches its A5 Sportback, while BMW will take the wraps off its compact SUV, the X1.

VW will show an electric car, and a "one-liter" car, which can go for 100 kilometers on one liter of gas, or about 238 miles per gallon.

Frankfurt being in the home of Europe's most performance-oriented carmakers, several luxury models are making a debut: the Porsche Panamera sedan, the Bentley Mulsanne, the Rolls-Royce Ghost, and assorted souped-up BMW and Mercedes-Benz sedans.

John Wormald, an analyst with British consulting firm Autopolis, expects demand for premium cars to revive -- at least temporarily.

"The fun comes in five to 10 years, when we will see very serious concerns about global warming," he said.

"Once the world economy recovers, we will see oil prices roaring up. That wouldn't be a problem for the person who can afford, say, an Aston Martin or a Rolls-Royce, but governments will say we can't afford more oil imports," he said. "The question is: 'what happens beyond that?' We'll see carbon taxes, as governments try to cut carbon dioxide by up to 80 percent."