No respite in European car slump, says Renault's Ghosn

Thu Sep 27, 2012 10:59am EDT

1 of 3. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, introduces the new Renault Clio model on media day at the Paris Mondial de l'Automobile September 27, 2012. The Paris auto show opens its doors to the public from September 29 to October 14.

Credit: Reuters/Jacky Naegelen

(Reuters) - European auto sales are headed for an 8 percent drop this year and further declines next year, said Carlos Ghosn, the chief executive officer of both Renault SA (RENA.PA) and Nissan Motor Co. (7201.T)

Despite the continent's financial crisis, Ghosn saw "zero chance" for a government-led restructuring of Europe's auto industry, akin to the restructuring of the U.S. industry in 2009. The U.S. restructuring was spurred by the bankruptcies of General Motors Corp., now reorganized as General Motors Co. (GM.N), and Chrysler Corp.

"Every company is going to have to deal with its own problems," Ghosn said in an interview with Reuters Television at the Paris Auto Show.

Renault's arch-competitor in France, PSA Peugeot Citroen (PEUP.PA), has announced plans to close a factory to adjust to the downturn, but Ghosn said Renault is coping by cutting work days at its factories.

Total European auto sales fell more than 7 percent in the year to August. Europe accounts for half Renault's sales.

In a wide-ranging interview, Ghosn said the Bank of Japan had "obviously not" done enough to contain the surge in the value of the yen, which has sharply raised the cost of cars that Nissan exports from Japan.

He suggested there should be "more easing" by the Japanese central bank, even though the bank has launched three rounds of monetary easing over the past year.

"You have to judge people by their results," Ghosn added, indicating his frustration with the yen's resilient strength.

Meanwhile, Ghosn said, the tensions between China and Japan over offshore islands were "bad news in the short term" for Nissan's sales in China, causing traffic in the company's Chinese showrooms to drop considerably.

"We're watching carefully the situation, and we're adjusting our production," he said.

He hopes for a quick return to normal relations, he added, because "there is so much commonality of interests between China and Japan.

The CEO expressed continued confidence in the future for battery-powered electric cars, as opposed to gas-electric hybrid vehicles. While sales of the electric-powered Nissan Leaf have fallen far below forecasts, Nissan's partner, Renault, is about to launch its own electric car, the Zoe.

The main drawback to higher sales of electrics, Ghosn said, is lack of rapid-recharging infrastructure. Hopefully that will be resolved, Ghosn added, by governments interested in promoting alternatives to gasoline-powered vehicles.

(Editing by Matthew Tostevin)

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