Weekly Brief: Germany Keeping the Auto Show on the Road

For the first time in two years, European automakers gathered last week to share their latest models with the general public.

The IAA Munich International Motor Show was, in many respects, a return to normalcy. Carmakers showed up with shiny cars. The media arrived with microphones and flashbulbs. Car enthusiasts lined up to ogle fancy concept vehicles and eat overpriced food.

Yet, the show was also a testament to how much has changed in the past 18 months in the world at large and within the auto industry. Signs of the pandemic were everywhere in Munich, starting with the fact that the event was held partly in public outdoor plazas as well as indoor exhibition halls. Indoors, everyone was masked thanks to a compulsory FFP2 mask mandate. Disinfectant dispensers were ubiquitous.

The changes went beyond Covid protocols. Munich was born as a phoenix from the ashes of the Frankfurt Motor Show (IAA Frankfurt), which died in 2019 because of flagging interest among the general public. Attendance had dropped 31% between 2018 and 2019 and was down 40% last decade as a whole. The biggest car show in the US, the North American International Auto Show, faced similarly grim downward trends before the pandemic shut it down. The problem is twofold: the general public no longer needs to go to an auto show to see the latest in automotive trends; they can just go to Google or YouTube. Automakers, in turn, no longer need to pay exorbitant fees to debut vehicles at auto shows when they can simply live-stream an event online and reach millions of people around the world within seconds. 

Last week was a test case to see if a new model could work. Instead of calling it an auto show, organizers rebranded the event as IAA Mobility and welcomed all forms of transportation, including electric vehicles, robo-taxis, e-scooters, e-bikes, and regular old bicycles. Visitors could take vehicles for test drives on a Blue Lane Road for electric, hybrid and hydrogen-powered vehicles. They also could throw tricks on an off-road bike track that called to mind a skate park.

In the olden days, automakers would roll out new cars like they were rock stars on stage with strobe lights and busty, scantily clad women. This year they replaced the hoopla with earnest conversations about global warming, electrification and the challenges of self-driving cars. If you squinted, you almost felt like you were at a TU-Automotive conference.

Electrification and autonomy were two themes that ran through nearly every presentation last week. Mercedes-Benz debuted five new cars, all of them electric. Renault introduced its new Mégane E-Tech Electric. Volkswagen and Argo AI revealed the first working prototype of the ID Buzz AD (Autonomous Driving). Mobileye and Sixt SE announced plans to deploy a robo-taxi service in Munich in 2022. Cupra announced plans to become an all-electric brand by 2030. BMW unveiled the i Vision Circular concept, which is all-electric and made from 100% reusable materials, so that it can be completely recycled at the end of its life. Continental showed off GreenConcept car tires made from rice husks and dandelion roots.

A skeptic might call all of this focus on electrification performative. The auto industry still makes the vast majority of its profit from gas guzzlers that contribute 12% of the world’s annual CO2 emissions. For years carmakers shrugged off or deliberately colluded to not address the situation. To wit, the European Commission recently fined Volkswagen and BMW €875M ($1Bn) for operating an emissions cartel for the past 30 years. Also, there was the whole VW emissions cheating scandal, which protestors from Greenpeace were on hand last week to remind showgoers.

Given the fact that automakers didn’t really care about finding alternatives to gas guzzlers until the last few years, it’s no surprise that their customers aren’t all that comfortable with the idea of suddenly going electric, especially in the absence of a reliably developed charging infrastructure. It doesn’t help that most EVs available today are more expensive than their ICE counterparts and many tilt heavily toward the luxury vehicle segment. Last week in Munich continued that trend.

Still, the event was a positive step toward reimagining car shows for the future. We’ll have to wait and see what the numbers say about attendance. As a car enthusiast, I’d certainly like to think that there’s still a place in this world for shows that highlight the best that the auto industry has to offer.

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