Euro crisis stirs caution among Japan automakers
* No contingency plans, yet, automakers say
* Main worry is length of recovery-Mitsubishi
* Demand remains solid for small cars-Honda
By Kei Okamura
TOKYO, Nov 30 (Reuters) - The deepening euro zone crisis and doubts about the euro's future has Japanese automakers moving cautiously in Europe, but there is no talk yet of planning for the worst -- a breakup of the single currency.
Worries do run deep however. Mitsubishi Motors Corp's president, Osamu Masuko, said the most pressing issue would be how long it takes for the region to recover.
"There are some who say it will require a five or 10-year time span to solve the problem," he said in an interview. "We're extremely worried by this."
Nissan Motor Co CEO Carlos Ghosn, whose company makes 15 percent of its sales in the European Union, also expressed concerns, saying activity was slowing.
"For the moment, I don't think there have been any major cancellations in investments, but we're taking a low profile," Ghosn told Reuters Insider TV on the sidelines of the Tokyo Motor Show on Wednesday.
"Everything that can be postponed is being postponed. Everything that requires some kind of prudence is being done. We're waiting to see how this crisis is going to unfold."
A surge in Italy's borrowing costs has pushed the euro zone's two-year-old debt crisis into a more dangerous phase, threatening the single currency's very survival as the region's ministers move to bolster a rescue fund.
The crisis has forced companies to begin contemplating what was once unthinkable: an unravelling of the 17-nation currency that could vastly complicate decisions ranging from investment to financing to pricing.
But top Japanese auto executives, as well as their German counterparts, expressed confidence in the survival of the euro in comments at the Tokyo Auto Show.
"There is a very strong will to ensure that the euro remains intact into the future," BMW sales and marketing head, Ian Robertson, said, adding that his company was not considering the possibility of a breakup of the euro.
One finance official at a major Japanese auto manufacturer said there seemed to be no signs of contingency plans being drawn up, with manufacturers accustomed to dealing with a variety of currencies.
The main concern, he said, was how the crisis would affect consumer demand in their core car business if the European crisis spills over to other regions.
Honda Motor Co's president, Takanobu Ito, said in an interview that the European market had been tough for some time, but that Honda was coping.
"Demand for automobiles will not disappear and in particular there is solid demand for small cars, which we are good at," he said.
Nissan's Ghosn said he was confident the situation would improve.
"I still think there is enough wisdom, knowledge and experience in Europe in order to get us out of this very difficult spot," Ghosn said.
- Confusion as search for Malaysian jet spreads across SE Asia |
- Malaysia military source says missing jet veered to west |
- Toddler found with heroin at New Jersey daycare center
- Special Report: How China's official bank card is used to smuggle money |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source