Nissan-Renault CEO sees 3-4 years of Europe "stagnation"

Tue Jun 12, 2012 3:09pm EDT
 
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By Nick Zieminski

NEW YORK (Reuters) - Nissan Motor Co (7201.T: Quote) and Renault (RENA.PA: Quote) expect "three to four more years of stagnation" in the European auto business, Carlos Ghosn, chief executive officer of both companies, said on Tuesday.

Speaking at an industry breakfast in New York, Ghosn said the companies were "planning for the worst" in Europe, where auto sales have fallen along with the continent's economies.

"Is Europe going to be breaking?" Ghosn said. "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."

One answer might be fresh state support for the French and European auto markets, advocated by Renault Chief Operating Officer Carlos Tavares on Tuesday. "Any action of support is worth taking if it boosts demand," he told journalists at an event on the outskirts of Paris.

CEO Ghosn said if some countries, such as Greece or Spain, leave the euro, their exile would probably be temporary.

"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."

European consumers, facing tremendous uncertainty in their lives, are holding off from making large purchases like cars, Ghosn said. Companies need to be strong enough to make it through three or four tough years to outperform rivals, he said.

"My best scenario is zero to 1 percent (growth)," Ghosn 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."   Continued...

 
Carlos Ghosn, Chairman and CEO of Renault-Nissan Alliance speaks with men during a forum for the 2012 International Auto Show in New York, April 3, 2012. REUTERS/Shannon Stapleton