By on October 18, 2011

Industry leaders, usually known for their unfatiguing optimism, are more and more taking a cautious stance. GM’s CEO Dan Akerson predicts flat industrywide U.S. auto sales in 2012, while his colleague Carlos Ghosn, chief of Renault and Nissan, has feelings of “very great uncertainty” when he looks toward 2012.

In an interview with Automotive News [sub], Akerson said GM predicts “flattish” U.S. light-vehicle sales for next year. And that only if Europe’s debt crisis is not contagious and won’t affect the U.S. economy. Akerson sees the EU crisis as the biggest threat to auto sales and to the global economy.

For 2011, GM predicts U.S. light-vehicle sales will finish at around 12.7 million or 12.8 million, and for 2012, there won’t be much more: “As we go into ’12, we’re looking for kind of a repeat of ’11,” Akerson said. The pent-up demand will have to remain pent-up for a while.

Meanwhile in France, Carlos Ghosn said that “for 2012, we are all currently in a state of very great uncertainty for the time being.” Ghosn also fingered the debt crisis as a threat. Ghosn told Reuters that there “could be some grounds for optimism in 2012 if Europe managed to solve its sovereign debt crisis.” However, he does not see that happening anytime soon, because countries are not in agreement on the measures needed.

This time around, it also does not look like China will bail out the auto industry, as it happened in 2009 and 2010. At the Global Automotive Forum in Chengdu last week, none of the captains of the Chinese car industry doubted China’s long-term potential. But all were in agreement that next year, the industry won’t see much growth.

In Japan? Don’t ask.



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31 Comments on “From Akerson To Ghosn, The Mood Of Industry Leaders Darkens...”

  • avatar

    It would be safe to say that most business leaders share this sentiment when looking to plan for 2012 and beyond. Given the volatility of global markets, low consumer sentiment and political uncertainty, even the most die-hard optimists CEOs have to wonder how they will fare in the coming years.

  • avatar

    Well, this is what happens after 30 years of continuous deregulation of the financial industry. The wolves have been running the hen house for way too long. Where is the politician with charisma and power who has not been bought off already?

    • 0 avatar

      No, it’s the result of a failed attempt to unify Europe under one currency, when some member countries were not quite as frugal and hard-working as others.

      • 0 avatar

        Geeber is right about the Euro’s travails being due to a failed attempt at unifying disparate European economies. However that is not the only problem facing the world economy. The economic malaise is further due to people/societies living on credit for 2-3 decades – working extra hours, having a spouse work, using home equity and maxing out credit cards covered it for that time and allowed the show to continue. But as Vanilla says the time has arrived for some of that money to be paid back. It seems some of the growth in the ast 30 years has been froth from credit and is unlikely to be replicated anytime soon.

    • 0 avatar

      “Where is the politician with charisma and power who has not been bought off already?”

      Elizabeth Warren.

      “You can’t blame people for taking more credit than they need when it’s offered so freely and you can’t blame banks for offering to much credit because they make money out of credit and will do it if they can.”

      Yes you can, in both cases. There have always been lots of people who live for today and will borrow beyond their means to repay if someone will lend it to them. The problem started with the securitization of loans that lets lenders make a profit regardless of the probability of repayment. This is what regulation is for, to step in when common sense is absent. Banks were not forced to make liar’s loans, no doc loans, etc. They made the loans because they were profitable.

    • 0 avatar

      I am right here, my friend. I’d be happy to step in and get the trains running on time.

  • avatar

    Everyone with a job seems to be paying off their debts and going without new purchases. Millions are chasing their home values downhill. What is being bought are replacement cars and cars for folks who have their debts under control. Or, perhaps they are stupid – could be.

    Blaming this on deregulation is even more stupid.

    This is a natural consequence of having lived beyond economic means on inexpensive credit for a decade. We all knew that one day the piper would need to be paid, and well, he is at the door and demanding payment. Hope you all have the ability to pay!

    I don’t expect to be in the automobile market for another two years, or if one of the Saturns stop.

    • 0 avatar

      I’m with VanillaDude on this one. I can tell you for one that Mrs. Reardon and I have been spending very little on non-essentials for the better part of the last 18 months in an effort to pay off her student loan debts and other unexpected expenses. Vacations? Nope. New cars? Nope. New furniture? Nope. New computer? Nope. New iPhone? Nope.

    • 0 avatar

      You can’t blame people for taking more credit than they need when it’s offered so freely and you can’t blame banks for offering to much credit because they make money out of credit and will do it if they can. There are 2 solutions to out of control credit use. An expensive education program to teach citizens how to use credit wisely or implementing regulation laws to limit and control the level of credit offered by banks.
      So While de-regulation is not the only problem, not including regulation as part of the solution would mistake repeating form of be madness.

  • avatar

    I’m surprised that the CEOs would admit this publicly, it must be pretty bad for that to happen.

    That said, I don’t know a single person planning to buy a new car any time soon, and a number of those people are in the 100,000+ mile/10+ year-old-car category.

  • avatar

    My wife’s ’97 Camry has 145K and needs about $1200 worth of work…we will fix it, and she’ll keep driving it as there is nothing seriously wrong with it otherwise. My ’00 Saturn SL2 has 125K and other than it liking to burn oil and a leaky steering rack, it runs fine and I plan on driving it to at least 200K at which time I’ll replace it with another cheap commute car to drive to 200K.

    I do have a ’06 GTO in the garage, bought brand new, but it only has 18K on it and is not going to be worn out or be going anywhere. But most likely, it will be the last “new” car I ever buy.

    My primary financial goal right now is to ensure my house is paid off by the time I retire in 15-17 years.

  • avatar

    The price of tuna finally tumbled 2-3 dollars in the last two weeks here. That only means one thing. Japan is buying less of it.

  • avatar

    I predict a second abortion of the Cadillac Converj.

  • avatar

    Our economic woes stem from unconstitutional government interference in the marketplace. Forcing banks to make loans to underqualified people, placing too many restrictions on manufacturers which drive factories overseas, and generally ignoring the facts that everything they do has unintended consequences, and that people will find a way around unpopular government regulations. NAFTA, CAFTA, and ChinAFTA send jobs away.
    Perpetual wars ? 1.5 Trillion dollar deficits ? Unimpeded illegal immigration ?
    Get REAL, fedgov !

  • avatar

    Those in the industry that are being realistic about the future and the economy are the ones most likely to succeed. Like all good business people, you have to make an accurate analysis of future changes, adapt your business models and produce products suitable to changing environments.
    These are tough economic times and I would be unimpressed with any CEO focusing on blame or undue optimism.

  • avatar

    The price of tuna finally tumbled 2-3 dollars in the last two weeks here. That only means one thing. Japan is buying less of it.

    perhaps could u enlighten us where is “here”?

    Or we think of any car here with less than 400 cu inches is less than adequate. Is because “here ” is Venezuela, gas is 20cents a gallon.

    There was a joke I once heard, a Dr was pondering which patient he was going to sleep with that day, whom this infamous relationship was not his first time. Only to find out later as he is a Vet and not a human Dr. thats all.

    • 0 avatar

      Japan buying less tuna = Japan spending less = Japan’s economy slows = indicative of global economic decline

      • 0 avatar

        To be realistic Japan has had financial woes for 20 years since the 1990 bubble burst. I do0n`t disagree that Japan having problems can cause problems, but in the past the other major economies of the world have been strong enough to continue with a weak Japan.

      • 0 avatar

        Japan was still very much wealthy during the Lost Decades. And they had no ascendant neighbors back then. Not this time.

  • avatar

    Well any bleak predictions turned out to be swell, nobody would blame them, but if it were the other way around one talked like a stock promoter, u know how much people will love u when they dont have work to go to!

    So as our ex-Premier of British Columbia of Canada namely his excellency Gordie Campbell. His election promise was not going to introduce a new tax HST. Soon as he was re-elected he quickly engineered the HST. ” Much of the opposition stemmed from Campbell’s perceived dishonesty about the HST as his government had said it was not on their radar prior to the election, and the fact that it equated to a tax hike for several sectors.”

    Our ex-premier besides having Order of BC bestowed to him, he had DUI added to his record too!

  • avatar

    Japan buying less tuna = Japan spending less = Japan’s economy slows = indicative of global economic decline

    thanks for the Economic 101 lesson.

    “here” as asking what city u reside in? Dont worry we wont be sending out goon squad to find u anytime soon. Since Tuna is caught in many places, unlike N American Lobsters, they were mainly harvested on the Northern American coast all the way from Boston to Nfld.

  • avatar

    Off topic here, but was that picture taken in the Sandhills of Nebraska, or near there? I can’t find the original picture on pixdaus.

  • avatar

    From this article I would like to point out 2 interesting perspectives:

    1. Is Honda genius?
    –> there is a very strong reason why they seem to have “out dated” technology. They are maximizing shareholder value by walking an increasingly fine line between maintaining their core customer base while not overly investing in capital intensive NEW platforms and technology.
    –> The Civic is using port injection + 5 speed automatic = 39-41 mpg. Amazing no? Intelligent no?
    —> The foresight in the development of their chassis/engines at the turn of the decade begs more discussion.

    2. Is Hyandai genius?
    –> They are doing the opposite of Honda. HEAVILY investing capital in design and engineering of new platforms/engines
    –> Why? To capture market share at a time that they KNOW others will tighten capital investments due to the economic outlook all industry players know is unfolding
    –> They are striking when the opponents are at their weakest point

    POINT IS: Honda couldnt really capture huge increases in market share by offering a Direct injected dual-clutch Civic that barely cracks 44mpg. They would have spent scare capital to chase small incremental increases in market share. They are at a mature phase of their market share and are not in need of new technology to maintain market share.

    • 0 avatar

      Interesting, although Honda could try and increase market share. They have what around 8% here in the US, no reason why they couldn`t get to double digits. In Europe they are at 1%, plenty of room for growth.

    • 0 avatar

      @suspekt: “They are at a mature phase of their market share and are not in need of new technology to maintain market share.”

      Substitute GM for Honda in that statement, and see what the result is. Standing still while the competition is moving on what sent GM to bankruptcy.

      Secondly, Hyundai/Kia is on a roll right now. Toyota, GM, VW, et al, all have to step up their game to keep up.

    • 0 avatar

      Honda can learn a lot from Audi (and BMW). Just make your cars aesthetically pleasing even though they’re really just gussied up crap VWs. People will flock to them.

  • avatar

    I don’t plan on buying any new vehicles either. Maybe in 2-4 years but that’s it. Our cars are still in decent shape and are low mileage for TDIs. Plus I just got brand new fenders on my wife’s 2000 Jetta courtesy of VW’s rust TSB.

    Instead of buying cars, we’re working on building up a nice chunk of savings and will be refinancing our house to probably a 15 year mortgage. It’ll be “Freedom 49” for me if I can pay off the house in 15 years.

  • avatar

    As the baby boomers retire they will tend to back off on purchases. This is because they will be on a fixed income and dont’ have expectations of higher income as time goes on.

    With Europe they are simply being dragged down by enormouse debt and spending that cannot be continued. The US is not far behind. Read this article by Micael Lewis at Vanity Fair(strange source for an article on economics) to get a taste of what will be our fate if spending doesn’t match our growth.

    There is a saying that What cannot go on forever will not go on forever.

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