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Auto industry rebounds, eyes electric market

STORY HIGHLIGHTS
  • Optimism is growing in auto industry after the disastrous drop in global sales last year
  • The Paris Auto Show, the industry's oldest event,opens to the public on Oct. 2
  • Daimler, Ford executives point to growing sales worldwide, especially developing markets
  • GM Europe is restructuring, but North American and China sales strong

Paris, France (CNN) -- At the Paris Auto Show, the world's oldest industry showcase, optimism is growing after the disastrous drop in global sales last year.

"Around the rest of the world, there is tremendous growth, and overall the automobile industry is going to expand anywhere from 5 to 10 percent this year alone," Ford CEO Alan Mulally told CNN's Jim Boulden.

"Everything we see today is that the big economies in Europe and the United States are starting to recover, all the data points that way," Mulally said. "Of course, we're coming back from the worst recession of all time, so it is slower, but we see all the fundamentals recovering."

"There is no doubt that we have tailwind," said Dieter Zetsche, chairman and CEO of Daimler Automotive. "That the economy and the car markets in particular are recovering much faster than all of us expected and this is even more true for the premium market."

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On display at the show is a wide variety of electric and hybrid cars. Still, widespread use on the roads may be years away. Daimler plans to sell 1.5 million cars by 2015 -- how many of those will use alternative power?

"We will certainly have a significant amount of hybrid cars at that time," Zetsche said. "We will offer mass production, all-electric cars, battery electric and fuel cell electric cars, but realistically the percentage of sales for these all-electric cars, zero emission cars will be relatively small ... I think 5 percent is an optimistic assumption."

Ford unveiled its next generation Ford Focus at the show. The company -- the only one of Detroit's "Big Three" automakers that didn't take a government bailout in the wake of the credit crisis -- plans to produce two million vehicles in the Ford Focus line for sale in Europe and North America early next year.

The car line demonstrates how the company reorganized four years ago to focus on the Ford brand and streamline global operations and offerings. "You look around this room and you see we have 10 different [Focus] models," Mulally said. "You have four-door, hatch-back, wagons, five-passenger, seven-passenger ... all off of the same platform.

"When you look at Ford now, and you look at how we have focused on the Ford brand and now leveraged all our assets worldwide -- the complexity comes down, our investment efficiency [increased] ," Mulally said.

Meanwhile, GM has been struggling to return to profitability in Europe. GM Europe is in the midst of a restructuring that will reduce one-fifth of its workforce there.

"It was necessary, we had too much capacity for our projections, we don't expect the market to come bouncing back too strongly in the near term, so it was necessary to do it," said Nick Reilly, CEO of GM Europe.

The company, however, is making strides in other markets, Reilly said. "In the U.S. market we've made a dramatic recovery, we're profitable there. Our four brands that are left are selling as much as the eight brands before," Reilly said. "We're very successful in China, Brazil and other growing markets. In Europe, we have plans to get back to profitability fairly quickly."

CNN's Jim Boulden contributed to this report