Nissan-Renault CEO Ghosn feels pressure from crises in Europe, Japan

Article by Christian A., on April 4, 2012

CEO Carlos Ghosn has disclosed that Renault will be forced to operate in "crisis mode" in Europe due to the continuing debt crisis in the region while Nissan will be in a similar scenario in Japan due to the strengthening yen. He further stated that vehicle manufacturers in Europe will continue to deteriorate if the governments in the region will not permit them to restructure and reduce workforce.

He explained that in the duration of five to 10 years, the lack of restructuring in the region is "going to be a drag" on the automakers' potential strategy in the future. Ghosn stated that European nations are discouraging the restructuring of the industry. He commented that when not allowed to restructure, one may survive, but is "weakening all the time."

The French government has constantly warned Renault that it should not slash jobs in France. The government is the largest shareholder of Renault with a 15% stake. Ghosn also disclosed that the strength of the yen continues to hamper Nissan. On the other hand, Nissan is still making gains in the United States with a 12.5% rise in sales for March, according to the U.S. data released on Tuesday. 

In Renault's home market of France, the automaker experienced a 30% decline in sales to 42,908 units in March. Bernard Cambier, who is the automaker's commercial director for France, stated that the company estimates a drop of around 10% in the market this year.

The vehicle market in the European region is set to fall 5% in 2012 due to the weak economic growth, according to the ratings agency Standard & Poor's. The vehicle manufacturers in the region are also struggling with manufacturing overcapacity, which executives estimate to be about 20%.

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