FRANKFURT - The message at September's auto show here was clear: It's no holds barred in the European auto market in the new millennium.

Automakers used this biannual exhibition as a dueling ground, throwing down gauntlets in the form of new concepts and production models and declaring no market niche safe from widespread competition.

Volkswagen AG kicked things off with the unveiling of its Concept D sedan, which when converted into production form will challenge German rivals Mercedes and BMW AG in the luxury car market.

But VW didn't stop there. The Audi A2, shown here for the first time in production form, is aimed directly at the Mercedes A-Class audience. And Chairman Ferdinand Piech also speaks of plans to invade the Smart market, as well, with an entry-level model smaller than the current VW Lupo. Timing is unclear, but the car will have its own platform, seat four and be sold in emerging markets as well as Europe, Mr. Piech hints. Eastern Europe and China are said to be possible sites for plants to build the $5,500 to $7,000 car.

Firing back is DaimlerChrysler AG, which says it will attack VW's bread-and-butter segments with its Chrysler brand. To that end, DC shows off its Mercedes A-Class based Chrysler Java concept car. Although it is uncertain whether DC would build the Java, it does have a track record of turning show cars into production models, and the automaker does say it wants to expand Chrysler-brand car sales in Europe to challenge the likes of VW, Opel and other volume sellers.

"We definitely see growth," says DC Co-Chairman Robert J. Eaton, predicting that Chrysler's volume will triple in Europe - from this year's 112,000 sales - within five years.

Insiders say Java plays a key role in the small-car strategy still being developed by the automaker that envisions the production of a half million small cars within the next five years, including Smart and A-Class brands, and aimed at European, Asian and South American markets.

DC also shows off a roadster version of its SLR concept unveiled earlier this year in Detroit. Although DC executives didn't say whether the open-top version will join the coupe in production in 2003, together the cars represent a clear effort to one-up BMW's Z8 high-performance model due on the market next year and Z9 concept shown here. In all, DC is promising a $47 billion product barrage that will include 64 new models by 2004.

Gracing Adam Opel AG's stand was the 3-cyl. G90 concept car, aimed squarely at VW's fuel-sipping Lupo. Using an aluminum space frame as its base, the front-drive G90 4-seater achieves 60 mpg (3.88L/100 km) fuel economy and meets European emissions standards set for 2008.

Citroen also has an eye on the entry market, showing off its Pluriel concept car, slotted into the automaker's product program plans for 2002-'03. The company says the car will be versatile enough to transform itself from a 4-seat sedan into a convertible or small pickup.

And several automakers make it clear here that the Renault Megane Scenic is about to lose its all-but-exclusive grip on the small people-carrier market. Among the Scenic competitors at the show were the Toyota Yaris Verso, Mitsubishi Dingo, Citroen Picasso, Mazda Nextourer, Chrysler PT Cruiser and Daewoo Tacuma. Renault answered the bell with a new version of the Scenic, called the RX4, which features a sport/utility look and 4-wheel drive.

Meanwhile, the Japanese also signal they're ready to get serious in Europe, as import restraints that have handcuffed them for years begin to come off in 2000. Toyota Motor Corp. says it will launch 14 new models in Europe by the spring of 2001 as it targets a 5% market share for 2005. Toyota, which currently sells about 600,000 vehicles in Europe, is aiming for volume of 800,000 units annually by then.

Honda Motor Co. Ltd. announces it is revamping its European distribution operations into three hubs - Frankfurt, Paris and London, all with an eye toward increasing its sales from 200,000 per year at present to 300,000. o