Daimler CEO Dieter Zetsche remains confident that European auto sales will pick up in the second half of the year despite a slow start, AP said.

Zetsche says the Italian elections, with no clear winner, "have not contributed to the overall notion of stability." But he says Mercedes sales outside of Europe provide a means of balancing the unstable market. New car registrations in western Europe were down 9 percent in January, worse than had been expected.

He says the industry needs to "go through the pain of consolidation" and avoid quick fixes, such as government incentives, that would land it back in difficulty after a year or two.

Attending the Geneva Motor Show on Tuesday, March 5 Zetsche says the new product "is always the best answer" to a crisis.