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AUTOSHOW-WRAPUP 1-Carmakers eye partners as tough markets loom

Published 09/30/2010, 03:29 AM
Updated 09/30/2010, 03:32 AM

* Volkswagen chairman casts eye on Fiat's Alfa Romeo brand

* Infiniti talks to Daimler about sharing Mercedes platform

* Toyota expects to gain share in flat European market

By Helen Massy-Beresford and Christiaan Hetzner

PARIS, Sept 30 (Reuters) - Carmakers sought more partners to cut costs and boost efficiency as the Paris Auto Show got under way on Thursday, highlighting the sector's need to streamline while dark clouds over the economy keep major markets tough.

Volkswagen's crafty chairman cast an eye on Fiat's Alfa Romeo brand and Japan's Nissan Motor said it will explore broader cooperation with Germany's Daimler in the run-up to Europe's biggest car show.

"Thirteen is my lucky number," VW Chairman Ferdinand Piech joked late on Wednesday, referring to the number of brands his sprawling group would have if it bought Alfa in VW's race to topple Toyota Motor Corp as the world's top automaker.

Infiniti, Nissan's luxury brand, will talk to the maker of Mercedes-Benz cars about sharing a Daimler sedan platform and its engines, a top Nissan executive said, expanding a three-way alliance that includes France's Renault.

Japan's Toyota put a brave face on a safety scandal that dented its reputation for quality, forecasting it will sell more cars in Europe next year even if the market dips.

PSA Peugeot Citroen Chief Executive Philippe Varin also took an upbeat line, confirming the French group's 2010 operating profit goal and suggesting European market volumes would be flat or slightly better than this year despite the end of cash-for-clunkers incentives in many countries.

At the last Paris Auto Show two years ago, carmakers had yet to comprehend the full scale of the crisis that would engulf the industry, forcing bankruptcies and favouring alliances as demand for new cars slumped and production plummeted.

European governments supported carmakers, introducing scrapping schemes that spurred demand as drivers got generous bonuses to trade in their old cars for newer, greener versions.

Now most of those schemes are finished, carmakers are increasingly relying on booming emerging markets, in particular Brazil, China, and India for future growth.

PSA's Varin said in a newspaper interview this week he saw China eventually becoming its biggest market.

Carlos Ghosn, the chief executive of both Renault and Nissan, said on Wednesday the global auto crisis was "behind us" and predicted Nissan would sell 950,000 cars in China this year.

Booming demand in China helped German sports car maker Porsche AG post record revenues.

The European car market is not expected to return to the pre-crisis level of sales it achieved in 2007 until around 2013.

Many carmakers are set to unveil zero-emission electric cars at the Paris show, testing whether consumers are ready to pay for vehicles that remove internal combustion engines from the environmental equation.

Car sales in many major markets including Japan, France, Spain, Italy and the United States are due out on Oct.1.

(Additional reporting by James Regan, Writing by Michael Shields; Editing by Hans Peters)

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