Geneva Motor Show 2017: World's best at Europe's biggest auto exhibition.PARIS: Europe's biggest annual car show kicks off in Geneva on Tuesday with luxury and crossover vehicles in the limelight, but with the emissions scandal still hanging over the industry.

Automakers are celebrating the end of the sector's crisis as European sales have returned to levels last seen in 2008 before a global financial meltdown inflicted deep dents on their business.

It is a far cry from last year's show where the industry was under a cloud after Volkswagen^[1] admitted in 2015 to having installed software in 11 million diesel engines worldwide to circumvent emissions tests, a scandal that w ill cost it billions in fines and compensation to car owners.

While Volkswagen has survived the crisis, the scandal has focused attention on emissions and the challenges automakers will have in building cars that can meet ever tougher pollution rules.

Carmakers are now having to steer toward engines that emit no more than 95 grams of CO2 per kilometre by 2021 to meet European requirements, compared to 130 grams in 2015.

But as diesel cars have been getting a bad rap because of emissions scandals, that target looks harder to meet.

"Diesel cars emit 15 percent less CO2 per kilometre" than gasoline-fuelled models, said Christophe Aufrere, a technology strategist at car parts maker Faurecia.

Bugatti Chiron on display

With electric vehicles still only accounting for a sliver of European car sales, that means gasoline-powered cars have to take up the slack, requiring the industry to squeeze more efficiency out of engines and to reduce vehicles' weight.

Research and development costs "have practically doubled in the past decade" said Remi Cornubert at AT Kearney, a consulting firm, and if carmakers fail to succeed, the bill will be high.

Automakers failing to meet the CO2 targets -- capping petrol consumption to 4.1 litres per 100 kilometres and diesel to 3.6 litres -- will have to pay 95 euros ($100) for every extra CO2 gram emitted by each car -- potentially adding up to tens of millions of euros of fines.

Jostling among carmakers for market position is also likely to dominate discussions after French carmaker PSA announced Monday the acquisition of General Motors' European subsidiary, which includes the Opel and Vauxhall brands, for 1.3 billi on euros ($1.38 billion), catapulting it into second place in Europe.

And there was more good news for PSA in Geneva on Monday after its Peugeot brand won European car of the year for its 3008 urban 4x4, as the show opened to the press.

Bentley Bentayga SUV

Volkswagen, meanwhile, unveiled its first prototype autonomous car Monday evening, the electric Sedric.

The German giant, whose brands include Audi^[2] and Porsche, said it planned to join a string of other automakers in investing billions of dollars in developing the vehicle over the coming years.

Despite the greater emphasis on fuel economy, the Geneva car show is unlikely to disappoint in terms of its usual glitz and glamour.

The legendary Ferrari^[3], Lamborghini, Pagani, McLaren and Bentley have all picked Lake Geneva's shores to present new models. Renault will showcase the final version of its Alpine A110 sports car.

"Geneva has always been the show of beautiful automobiles and prestigious racing cars," said Ferdinand Dudenhoeffer at the CAR institute.

But the greatest buzz may come from so-called "crossover" vehicles (CUVs), which combine features taken from sports utility vehicles (SUVs) with those of passenger cars.

Italdesign Zerouno
The segment, including fashionable urban four-wheel drive vehicles, now makes up nearly 30 percent of the European car market and features the Volvo XC60, the Citroen C-Aircross, the DS7 Crossback and the Land Rover Velar.
Some 180 companies will be present at the 10-day show which opens to the public on March 9 after two press days during which most major corporate announcements are expected. Last year's show attracted 687,000 visitors.
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