Porsche looks to be the most desperate of the European car makers. Demand for its aging sports cars are in free fall. Sales of the 911 -- the flagship model -- were down 38% in August.

Moreover, the Cayenne SUV is already appearing to peter out after only six months on the market in the U.S. It sold 1,233 in the States in August -- its worst month since the launch. The introduction of a cheaper V6 version, which is being shown at the Frankfurt show and which is little more than a souped-up version of the VW Touareg, suggests that Porsche's slinky offroader is not turning as many heads as hoped for. Stalling sales of the Cayenne will make fiscal 2004 a very rough year for Porsche.

With the exception of troubled Fiat, Porsche has been the worst-performing car stock this year, with shares up just 2% on the year. Analysts expect the company's earnings per share for the year ended July 31, 2003, to rise to €34.40 from €27.80 a year ago. Next fiscal year, analysts estimate an EPS of €40.65. That gives it a P/E ratio of 10.0, which may be a bit high, considering the risk.

Companies that don't have hot new models to rave about in Frankfurt aren't going to lie down. You can bet that they'll battle for market share.