Automakers voice worries

GENEVA — Automakers offered sneak peaks of their newest models at the International Motor Show Tuesday, but behind the sheen of the meticulously waxed vehicles, there was concern about the weak outlook for sales in Europe and North America this year.

Moody’s Investors Service shifted its overall outlook for European car makers from stable to negative Tuesday because of expectations that neither the European nor the North American markets would experience any significant growth this year.

Moody’s senior credit officer Falk Frey said incentives were primarily responsible for pushing up sales last year, and could be used again this year because automakers are producing more vehicles than they can sell.

“Any volume gains that are recorded will likely be driven by an increased emphasis on incentives or an even higher proportion of less profitable fleet sales,” Moody’s said in its report.

Frey said consumers appear reluctant to replace their current cars and are concerned about high gas prices. The average price for a liter of gas in Europe this month is 1.08 euros, according to AA Ireland, or around $6 a gallon.

Patrick Blain, the head of Renault SA’s sales and strategy, told reporters the European car market could dip this year, noting that sales last year benefited from price discounting.

Bob Lutz, vice chairman of General Motors Corp., warned that more cuts by the company in the U.S. and Europe had not been ruled out because of bruising competition from its rivals. GM announced late last year that it plans to cut 30,000 jobs and close 12 facilities by 2008.

“You’re never done with cost-cutting,” he said. “As long as automobiles are substantially more expensive to produce in Europe or in the U.S. than they are in China, Korea or Mexico, we have a cost problem. There’s no walking away from it.”

He was on hand as Opel, part of GM Europe, debuted its redesigned Opel GT, a two-seater roadster that features fluid lines and an aerodynamic body with rear-wheel drive that evokes its forebear from the early 1970s.

Other European car makers are looking to the United States, in part because their compact and subcompact models would likely appeal to consumers mindful of higher gas prices.