Europe auto industry’s recovery to take years, says Nissan’s Carlos Ghosn

Article by Anita Panait, on September 14, 2012

Carlos Ghosn, chief executive of Renault-Nissan, told Bloomberg in an interview that it would take many years for the auto industry in Europe to recover from dwindling demand and overcapacity.  Ghosn remarked that Nissan is "preparing for many mediocre years" in Europe. Ghosn said that despite the excess production capacity in Europe, the region "will not see any kind of Armageddon."

New-car sales in the continent has slipped to their lowest levels in 17 years, due to lower vehicle demand brought about by the current European debt crisis, rising unemployment and slowing economic growth. Business consultants AlixPartners made a forecast in August 2012 that the European auto market would not recover to pre-crisis levels until the end of the decade, as the current euro crisis and high unemployment continue to corrode consumer confidence.

According to AlixPartners, the demand for new passenger cars and light commercial vehicles in Western Europe will drop by around 1 million units in 2013 to 13.5 million, which is 3.3 million units less than pre-crisis sales figure. As for Nissan’s operations in Europe, Ghosn told Bloomberg that the carmaker will match its production capacity with demand.

Nissan’s CEO disclosed that the carmaker plans to produce over 5 million vehicles, thanks to growth in Southeast Asian countries like Myanmar, Indonesia and Vietnam, and the United States.

Ghosn said in the interview that he is hoping that the new Nissan Altima midsize sedan will take "top position" in the US, where the auto industry continues to improve. Ghosn said Nissan has been precluded from expanding its production capacity in its home market Japan due to the strong yen, as the carmaker expands its output capacity in Southeast Asia.

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