GENEVA—The organizers of the Geneva auto show have said the event may not be held next year amid a dispute with the local authorities over a bailout and a reluctance by some auto makers to attend.
The Swiss show was canceled this year due to the coronavirus pandemic.
The Geneva International Motor Show Foundation, which organizes the annual event, has rejected the terms of a $17.3 million bailout loan from authorities in Geneva because the the authorities have asked for a guarantee that that the show will be held next year.
Some auto makers are reluctant to commit to attending the show next year Sandro Mesquita, the new director general of GIMS, told Automotive News Europe in a phone interview.
"The signals we are receiving from the brands are more in the direction of 2022. The whole industry is facing a huge challenge with the COVID crisis," Mesquita said. "For the moment, we are thinking of organizing the next event in two years' time."
The loan would have helped repay $11.3 million to auto makers after the event was canceled in March, while the remaining money would be used to stage the 2021 event.
"The situation is still not clear," Mesquita said. "If we again have to cancel next year it would just be a catastrophe for us."
Authorities in Geneva said that they cannot pay out the money without the guarantee of a show next year.
"We didn't want a situation where we lend almost 17 million, then six months later they won't organize the event because then you have a political problem," Pierre Maudet, the councilor in charge of economic development for the State of Geneva, told Automotive News Europe.
The show, which is held in March, is the largest event in Switzerland, generating around $206 million in income for the city, the authorities said.
Under the terms of the loan, GIMS would have pledged its 7 percent stake in the Palexpo convention center, where the show is held, to the Geneva State as a guarantee the loan would be paid back.
The State calculated the stake was worth about $17.5 million after it fell in value following the cancellation of this year's event.
"The auto show represents a third of the value of Palexpo. If you don't organize in 2021 then that value goes down and you lose money," Maudet said.
The decision to spend $11.4 million on reimbursing auto makers for stand space represents a U-turn from March, when the show's organizers said that because the Swiss government essentially banned the event, it could claim force majeure, which would let them break auto maker contracts without penalty.
"A claim against the auto show will not have success. There are no refunds or litigation possible," Maurice Turrettini, chairman of the Foundation Board of GIMS said in a statement in March.
GIMS now fully will reimburse money auto makers paid to rent stand space at the event. "Legally we are not liable, but this is not our intention, our intention is to reimburse," Mesquita said.
Under Mesquita, who took over the position May 1, the GIMS Foundation is pursuing other avenues to raise money, including investors and financial institutions. It also has approached the Swiss government for help, Mesquita said.
The Geneva auto show was facing falling exhibitor numbers before the 2020 cancellation as auto makers redeployed precious finances to launch new cars in a cheaper environment.
After other auto-show cancellations this year—including Detroit, New York and Paris—auto makers may start to believe such events are no longer needed.
For example, Porsche said that coverage for a hastily arranged digital reveal of its 911 Turbo S flagship sports car had outstripped that of last year's Geneva reveal of the 911 Cabriolet, a more important model in terms of sales.