The euro zone economic collapse has severely damaged the European auto industry, a plight that calls for realism, noted Nissan Motor Co. and Renault CEO Carlos Ghosn. Ghosn estimated that the European market will suffer “three to four more years of stagnation” before things get better.
‘Planning for the worst’
At an auto industry breakfast in New York, Ghosn revealed that both Nissan and Renault are “planning for the worst” from the European market over the next few years. As bank bailouts and economic uncertainty have mounted across Europe, consumers have held their money and been less likely to buy a new car, a mirror experience to what has happened in the U.S. since 2008.
“I think we’re going to have some difficulty in front of us,” Ghosn said. “I have absolutely no doubt the next three, four years Europe are going to be at best stagnation. We are preparing for tough times.”
Accentuate the positive
But Ghosn posed that economic stability is more than a pipe dream for the European Union.
“Is Europe going to be breaking?” Ghosn wondered. “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.”
Continuing in a positive vein, Ghosn speculated to the automotive press that the countries hardest-hit of late by the euro zone economic collapse – Greece and Spain – may leave the union in exile, but will most likely be allowed back.
Slow growth at best
While he isn’t calling it austerity time, Ghosn does believe that automakers that depend heavily upon the European market will have to buckle down to make it through the next four years and remain ahead of the competition.
“My best scenario is zero to 1 percent (growth),” 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 percent in France. There is so much uncertainty.”
A tough balancing act
The stress of a historically high yen and the struggling European market have made an already difficult job for Ghosn all the more stressful. Balancing between two stools as the CEO of both Nissan and Renault have had a negative impact upon his personal life, he told Automotive News.
“I’ve been crucified as CEO of two companies,” he said. “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.”