Renault-Nissan CEO is optimistic in Russia despite slump

Article by Anita Panait, on July 19, 2013

Carlos Ghosn, chief executive of both Renault and Nissan, is expecting the car market in Russia to prevail over its current weakness. Car sales in Russia has drop for four months in a row, no thanks to the weakening Russia economy. Moscow-based Association of European Business (AEB) expects the Russian car maker to drop 5 percent in 2013.

The Renault-Nissan CEO, however, remains positive that the market would gain in the longer term, citing low car ownership in Russia. Ghosn told the Vedomosti business daily that he does not doubt that car ownership in Russia should be not less than in Portugal, Spain and Italy.

Less than 300 per 1,000 people own cars in Russia, compared with a European average of 500, Ghosn said, adding that  on the whole, he has “no doubt that the trend is upward." Ghosn is aiming for Renault-Nissan, with the Lada-maker AvtoVAZ, to grab 40 percent of the Russian market.

Renault and Nissan inked an agreement in 2012 to take control of AvtoVAZ by mid-2014, as part of its bid to tap demand for new cars in Russia. Renault, Nissan and AvtoVAZ currently control 32 percent of the Russian car market.

Ghosn has previously remarked he wanted the venture to grab 40 percent of Russian sales by 2016. According to AEB, AvtoVAZ, Renault and Nissan combined posted a 7.6-percent decline in sales in the first half of 2013 to almost 400,000 units.

Ghosn reiterated a previous forecast that the automotive industry would sell a record number of cars in 2013 around the world to over 81 million vehicles. [source: Reuters]

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