Nissan-Renault CEO Carlos Ghosn said today that he does not expect any sales growth in Europe over the next three to four years. He is not giving up on growth, and said that most will come from higher demand in the United States and China, Reuters reports.
What Ghosn kept to himself is that there probably won’t be much growth in Europe after those three to four years either. Most likely, there will be a monstrous contraction of the market. When with his inner circle, Ghosn often talks about a “structural decline:” This is not a just one of these cyclical phenomenons. It is simple math: Around 1970, as the pill became popular, births dropped by approximately half from their prior peak in the mid-sixties. This peak now sits smack in the middle of the prime new car buying age, which in most of Europe is between 40 and 60 years. The trailing edge of the peak already makes itself felt with lower sales. At around 2020, this peak will retire, leaving behind a drastically smaller pool of buyers.
European carmakers which at this point are not firmly established in growth markets, will be dead. If you are just beginning to establish yourself now in growth markets, it will be too late.
We did these studies in the mid-1990s, when the dip which is now heading towards its 70th birthday created a crisis in the European car market. We predicted the crisis would be over soon, there will be a huge boom at around the turn of the Millennium, after 2010 it will get iffy with premium cars (older buyers) still going strong, and after 2020, 2025, we all want to live elsewhere, or be dead.