By David Lawder
PARIS, Sept 26 (Reuters) - Worries about the global economy, consumer sentiment and war clouds over Iraq failed to spoil the mood at the Paris auto show on Thursday, where car bosses focused on upbeat sales and profit targets.
As if Paris' Parc des Expositions was a parallel universe with curvaceous sheet metal, lavish parties and pop diva Kylie Minogue, there was little concern that demand for cars and trucks could quickly turn sour.
On a day when Iraq claimed that U.S. jets had raided the Basra civilian airport and destroyed its radar system, and the Bush Administration was turning up the rhetoric on Congress to take strong action against Baghdad, automakers had barely a word to say about the possibility of war.
"This is like looking into a crystal ball. War always leads to problems but no one can say for sure exactly to what extent," Porsche CEO Wendelin Wiedeking told Reuters.
Wiedeking was more concerned with the introduction of the German sports car maker's new Cayenne sport utility at the show, a vehicle not aimed at cautious spenders with a $55,000 minimum U.S. price tag.
Auto executives said they expected unit sales in the key markets of the United States and Europe to be flat to slightly down next year, but promised this would not hurt financial performance. Several predicted market share gains but no one conceded they would lose ground.
BIG DREAMS
Among the boldest predictions was that of PSA Peugeot Citroen chairman Jean-Martin Folz, who said the French car maker would boost global sales 23 percent to four million units by 2006, even with expectations of a flat European car market next year and new product offensives by key competitors.
Most of the growth would come from far flung markets in China, Central Europe and South America, Folz said, showing his desire to steal a march on archrival Renault .
Ford Motor Co, made a more cautious prediction, saying it would raise its 2003 European profit target slightly, even as it sees signs of a slowing market next year, thanks to cost cuts and some new models. Nonetheless, Ford put on a show for the press, throwing a glitzy party and bringing in Minogue, the pint-size Australian singer who rules European pop music charts, to unveil its Streetka roadster, which debuted along with a three-door Fiesta and a small concept minivan based on its Focus car.
On Wednesday, Ford chairman and chief executive Bill Ford was deflecting investor concern about recently widening bond yields, saying the company faced no constraints in its finances.
INVESTORS APPLAUD
The positive talk from Paris helped to soothe investors, who sent European car shares racing upward. The DJ Stoxx auto index rose 5.17 percent, outperforming the broader market.
German carmakers did particularly well. BMW shares rose 6.88 percent to close at 34.32 euros after it said sales for the first nine months were up 5 perent to around 800,000 and raised its target for sales of its Mini, the revamped British cult car.
Volkswagen AG shares jumped 8.24 percent after saying 2003 sales would reach five million units, in line with sales in the last two years.
"It looks like cars have their own special climate and deviate from the difficult economic context," said Thomas Meier, a fund manager at Union Investment in Frankfurt.
GM shares also caught some of the glow from Paris, gaining nearly five percent after GM Europe chief Mike Burns told Reuters that the unit was on track to breakeven in 2003.
GM Chief Financial Officer John Devine said it was hard to gauge what a war with Iraq could do to the global car market and the company's plans.
"It depends on how long and how deep it is -- there could be oil supply disruption," he said, adding that the impact on the consumer would be the most important aspect to watch.
"But we think to some extent this is already in the market," he said. "If it happens quickly we could get back to growth. it has been a surprise so far that it has held up as well as it has." --With reporting by Tom Brown, Madeline Chambers, Thomas Pfeiffer and Michael Steen.