Auto Industry Slump To Continue a Couple Years, Ghosn Says
January 26, 2009
RIYADH, Saudi Arabia -- Renault-Nissan CEO Carlos Ghosn predicts the current slump for
automakers will continue for the next couple of years.
Ghosn forecasts global vehicles sales will fall 14 percent this year to 55 million units from 63 million in 2008. Further, he expects it will take at least seven years to return to the peak level of 69 million units in 2007.
"It's not a short-term kind of correction. It's a real slump," Ghosn told reporters at an economic gathering here.
Ghosn said the combination of factors -- the recession, the credit crisis and foreign exchange volatility -- is causing the slump to linger. "If it was only a recession, the car industry...would react very quickly," he said.
Ghosn said that in 2007, global auto sales were 69 million cars, while last year it was 63 million. But the trend in the past two to three months indicates car sales worldwide this year are likely to reach only about 55 million cars.
"That's the ballgame on which we have to prepare ourselves," Ghosn said.
To minimize the impact, Ghosn said manufacturers are putting their own houses in order as well as considering teaming up with others to try to reduce the effect of the crisis.
"For the next couple of years, you're going to have practically all car manufacturers in a defensive mode, which means reducing their inventory, reducing their investments," he said.
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