Compact cars: Economic woes big, so carmakers go small

Automakers are unveiling new models at the Frankfurt auto show as the industry heads into an uncertain year, with Europe's debt crisis and worries about the economic recovery in the U.S. casting a shadow over two major markets.

Prominent new models on display will include a new Porsche 911 Carrera sports car; Volkswagen's Up, the latest entry in the market for tiny, fuel efficient "city cars;" and BMW's small electric i3, which saves crucial weight with high-tech carbon reinforced plastic.

Among other compact cars, Fiat has a new, slightly longer version of its Panda small car, a mainstay that has sold 6 million since 1980, while Toyota has a new take on its familiar Prius, offering a plug-in hybrid version and a Prius+ seven-seater. Daimler AG's Smart brand has an electric version of its tiny two-seater.

Ford Motor Co. is unveiling the Evos, a concept car that won't make it into production but which shows design elements that will appear on Ford's regular models soon. Those could include the car's slender, LED headlights.

The mood ahead of this year's show is mixed: upbeat thanks to recent strong profits from BMW, Daimler, Volkswagen and Porsche, but clouded by the European government debt crisis, which has depressed consumer optimism and growth forecasts for the year ahead.

Nonetheless, this year's 64th International Motor Show will be a much more cheerful place than the last show in 2009, which took place during the recession. Organizers say 1,007 exhibitors have signed up, compared with 781 last time, and the confidence of the home carmakers is such that VW luxury brand Audi is splashing out for its own test track that winds in and out of the exhibit building.

The show opens to journalists on Tuesday and Wednesday at the Frankfurt Messe exhibition center. Chancellor Angela Merkel will open it to the general public on Thursday, after which it will run through Sept. 25.