According to Chief Executive Officer (CEO), Nissan and Renault, Carlos Ghosn, the European automotive market will face "three to four more years of stagnation". In wake of the fact that the sales volumes in automotive sector have been falling in the continent alongside the economies, he said that car manufacturers are bracing themselves to see the worst of conditions. To his own question, "Is Europe going to be breaking?", he replied, "I don't think so. I think the Euro will stay. I think at the end of the day Europeans will find the solutions in order to hold Europe together."
As per Ghosn, if countries like Greece or Spain decide to ditch the Euro, it will be only on a temporary basis. He feels that there is a storm brewing and there is no doubt that there will the growth rate for the auto industry will be really slow during next 3-4 years in Europe. As it is, customers in the continent are already very insecure and refrain from making large investments like buying cars. In order to overstep their rivals, the two car manufacturers need to have a strong foothold in the market.
Ghosn feels that the growth rate may go as low as zero to one per cent. He said, "We have some worse scenarios for which we need to prepare as companies. For the moment, we're planning for the worst, and the worst is now, and the car market is down more than 15% in France. There is so much uncertainty."
Nissan is holding back on its home turf of Japan, where the national currency, Yen, has been going strong, thus posing difficulty in generating profits. However, since the two car makers can increase capacities in other countries like Mexico or China, they do not suffer as much as the country does. Ghosn said, "Frankly, the level of the yen is unbelievable." He further explained, "What happens is, you're bringing investments outside Japan, bringing jobs outside Japan." However, he made it clear that Nissan will not make a hasty retreat from its home country but will still try to safeguard itself against the fluctuation of Yen. The company is surprised at the level of Yen being 78 or 79 against the dollar, which is a record high.
Ghosn also maintained that there is no merger in the pipelines for Nissan and Renault during his tenure and even afterwards. According to him, shareholders witnessed the positives of having a single CEO for both the companies, but it took its toll on him as he had to work in two vastly different corporate cultures. He said that he would not recommend Nissan and Renault to share a single CEO after he hands over his duties. He said, "I've been crucified as CEO of two companies." He further added, "I would not wish on anybody to go through what I've gone through in terms of personal life. Anything going wrong anywhere; you're responsible. It's not normal."
