Gloom Amid the Chrome

WESTERN EUROPE

The usual eyecatchers were on hand last week at Geneva's Salon Interna tional de 1'Automobile where 78 car makers from 13 countries bared their new chrome. Ferraris, Maseratis and Aston Martins gleamed disdainfully, while a Daimler reposed in a bed of rhododendrons. High performance and prices typified the new models. Italy's Fiat presented its $5,859 Dino, boasting a Ferrari-designed engine, while O.S.I, of Turin produced the silvery Scarabeo. From France came the Matra 530, a Le Mans-styled model with a sloping tail, a Ford Taunus engine and a built-in roll-bar. Japan's Toyota came West with a 2,000 GT roadster labeled "James Bond." To be sure, Detroit-styled iron was there, but the square lines of Germany's new Opel Commodore seemed oddly more American than the nifty Mustangs and Cougars. And the canny Dutch drew crowds with a wicker-seated beach buggy named "Kini," built by DAF.

There's One Catch. While the show was unfalteringly festive, the moods of the European showmen were mixed. Most optimistic were Italian manufacturers, whose 1966 sales were up 17% over 1965; this January, the Italians topped the same month a year ago by 27%. Fiat, by far the largest Italian automaker, sold 1,178,000 in 1966, an impressive increase of 231,567 in two years. In 1967, Fiat expects to top that by 8%, and considering its deal with Russia last year (TIME, May 6), long-term licensing prospects look impressive. No less hopeful are state-owned Alfa Romeo, with 68,000 in sales last year, and Lancia, with 36,000 in 1966 sales (up 9%).

In France, it is generally agreed that growth will continue, if at a lesser rate than the spectacular 25.5% of 1966. There is one catch: a continued bad domestic-sales record may spur further exports by Germany and even Great Britain, which has sagged sadly in this area. This would, of course, slice into France's foreign market that last year accounted for nearly 40% of her sales.

A Spotty Picture. Germany's first-quarter sales and production are 25% below the same period of a year ago. Crash efforts have been weak, as when VW reintroduced its mini-priced model at $1,121, christened by President Heinz Nordhoff, "the Economic Crisis Beetle." And springtime is not expected to bring relief. Germans, after seeing their economy crumble thrice in two generations, have nervously watched tax, interest and insurance rates rise, and unemployment surpass job openings.

While Germany is faltering, Britain's auto industry is marking time after passing through the worst phase of the government's deflationary policies. Companies are even talking of rehiring laid-off autoworkers. But last year's exports slumped to the lowest level since 1961, and car registrations were off 12% in the first two months of this year. In its first-half report for fiscal 1967, due shortly, giant B.M.C. is expected to show sharply reduced profits.

Overall, the picture is spotty--some bright spots, some gloom. But prospects are that for the first time since 1950, Western Europe's automakers will end the year with their first annual production downturn.

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