Audi risks fading as car market recovers

Berlin (Reuters) - The Geneva Motor Show will open to the press on March 4 and 5, and to the public from March 6-16. Just as Europe's car market recovery shifts up a gear, the region's largest automaker Volkswagen will have little new to display from its luxury brand Audi at this month's car show, other than a niche sports car. Audi, which accounts for almost half of operating profit at German parent Volkswagen (VW), will unveil a new version of the TT sports car, a model that accounted for less than 2 percent of the brand's $1.58 million sales in 2013. By contrast, rival BMW will showcase the latest model from its cutting-edge "i" series of electric cars, while Daimler's Mercedes-Benz will present a new version of its best-selling C-Class, adding to a string of recent launches.

Having doubled model lines and deliveries over the past decade to narrow the sales gap on luxury car market leader BMW, Audi has not had much new on the stands for several recent industry gatherings compared with its rivals. What's more, overhauls to Audi's top-selling A4 saloon and the Q7 sport utility vehicle (SUV), slated for 2014, will be pushed into next year as the cars need to be reworked, two VW sources familiar with the matter said. That is leading some analysts to question whether Audi can maintain its strong sales growth of recent years and meet its goal of overtaking BMW by 2020, which in turn could torpedo VW's drive to become the world's biggest carmaker.

After a six-year slump, Europe's car market is growing again as the region's longsuffering economy recovers from a debt crisis, with sales in the European Union rising for a fifth-straight month in January. The luxury car industry avoided the worst of the downturn, thanks in part to strong demand from developing countries. Research firm IHS Automotive forecasts Audi will briefly snatch the luxury sales crown in 2017 or 2018, as it aims to double its line-up of popular premium crossovers that includes the Q5 compact SUV. However, it expects both Audi and Mercedes to miss their goals to overtake BMW by 2020, with Mercedes staying in third place throughout the period.

BMW, aiming to stay in the top sales spot for a 10th-straight year, will flaunt the i8 plug-in hybrid sports car in Geneva. Other unveilings will include the new four-door MINI Clubman concept car and the new "Active Tourer" minivan. Mercedes, enjoying a sweet spot in its product cycle, will present the new V-Class minivan and a coupe version of its all-new flagship S-Class saloon, the brand's top-end product.