It is still a tough time to be a European carmaker. Profits are falling as idle factories produce more costs than cars. And fewer consumers are buying new cars.
Despite the gloom, automakers began the rollout of new models at the Geneva Motor Show on Tuesday, from a pair of hybrid supercars to a sedan to a raft of smaller SUVs. All done in an attempt to lure buyers back – or at least capture their imaginations. But Europe’s carmakers are finding it harder to recover from the collapse of the car market in 2008 than some of their rivals in the U.S. and Asia. Europeans are buying fewer new cars as their economies grow weakly, or not at all.
New car registrations in Europe dropped 8.5 percent in January – more than anyone was expecting – and that is on top of a decline of 7.8 percent overall last year to 12.5 million units. Even bedrock Germany, the engine of Europe, was suffering: sales were down 9 percent in January and 10 percent in February.
Auto executives are split over when the European car market will bounce back – or whether it will happen at all. Ford Europe’s Stephen Odell and Renault’s Ghosn put it at least three years out.
Service firms grow at fastest pace in a year
U.S. service companies grew in February at the fastest pace in a year, buoyed by higher sales, more new orders and solid job growth. The gain suggests higher taxes have yet to slow consumer spending on services.
The Institute for Supply Management said Tuesday that its index of non-manufacturing activity rose to 56 in February from 55.2 in January. Any reading above 50 indicates expansion.
The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services. A solid recovery in the housing market helped drive the index higher.
Service firms also kept adding jobs last month. A measure of service-sector hiring fell only slightly after reaching a nearly seven-year high in January.
St. Louis company wins suit over chips
A Texas jury has sided with a St. Louis company in its fight with snack giant Frito-Lay over the right to produce bowl-shaped tortilla chips.
Plano, Texas-based Frito-Lay sued St. Louis-based Ralcorp Holdings and its Medallion Foods subsidiary in February 2012, saying Ralcorp’s Bowlz corn chips were too similar to Frito-Lay’s Tostitos Scoops! chips.
Defendants’ bowl-shaped tortilla chips and accompanying package are an apparent intentional effort to imitate the famous, successful mark and packaging of Frito-Lay’s Tostitos Scoops! tortilla chips, the lawsuit claimed.
Frito-Lay asked the U.S. District Court in Dallas to order Ralcorp to stop making the chips and pay $4.5 million damages, but a jury sided with Ralcorp on Friday.
Frito-Lay said in a statement it was disappointed in the ruling and weighing its legal options.
Home prices rise by most in nearly 7 years
U.S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.
Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday by CoreLogic. That’s up from an 8.3 percent increase in December and the biggest annual gain since April 2006.