Renault-Nissan chief executive Carlos Ghosn still sees great potential in Russia despite a current slump in auto sales in the country as well as current geopolitical matter in the region. He remarked the while geopolitical situation in Russia is "bumpy," it will not last. He said that Renault-Nissan’s strategy in Russia doesn't take into consideration short-term bumps, but only trends and long-term potential.
He remarked that Nissan’s supply chain in Russia has not been affected by Western sanctions imposed on some Russian individuals over the country’s annexation of Ukraine's Crimea region. Ghosn was in Russia for the unveiling the on-Do sedan of its revived Datsun brand. Nissan retired the Datsun brand in 1981 but said in 2013 that it would relaunch in emerging markets like Indonesia, India, Russia and South Africa.
The revival of the brand was partly aimed at tempting young first-time customers away from the used-car market. Nissan as well as other carmakers recognize Russia’s potential as brought by a growing middle class with disposable income, low car density and an aging fleet on the road. Despite these factors, car sales slumped as Russian economy has slowed.
Car sales dropped 5 percent in 2013, according to lobby group AEB. According to Ghosn, he is taking a longer-term view for the Russian market, saying that he still bullish on it despite a decline last year and a possible drop thus year.
He noted that when Nissan invest, they engage for “five, 10, 20 years down the road." Ghosn said that Datsun will benefit from the weaker ruble since the carmaker has localized its output at AvtoVAZ's Togliatti site and is using local supplies as much as possible. Renault and Nissan have inked an agreement to take control of AvtoVAZ by mid-2013. [source: Reuters]