Ghosn Sees No European Turn-Around Anytime Soon, Or Later

by Bertel Schmitt

Published: July 7th, 2013

ghosn sees no european turn around anytime soon or later

Nissan and Renault co-CEO Carlos Ghosn still sees a future in the electric car, it’s the European market that doesn’t have great prospects of a turn-around as far as Ghosn is concerned.

Ghosn does “not expect any strong recovery in the troubled European auto sector in the medium term,” Reuters reports from France. “I am preparing Renault to several years of market stability, at best,” Ghosn said. That’s stability at low levels not seen for 20 years, mind you.

While some cling to hopes for a quick turn-around (hello, Opel), Ghosn repeatedly warned of a “structural decline” of the European car market. Simple population studies show that there will be fewer and fewer new car buyers in Europe for many decades, with no relief in sight.

Ghosn’s faith in electric car sales however remains unbroken. Between the two of them, Renault and Nissan will have sold a total of 100,000 electric vehicles so far by the end of June, Ghosn told Reuters. Ghosn said the alliance’s investment in hybrid and electric vehicles “is not a bet, it is a certainty.” Other than Europe, EV sales can only go up.

#BertelSchmitt #Europe #EV #Ghosn

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments

Join the conversation

17 of 19 comments

Klossfam on Jul 07, 2013

Ghosn can be a bit of a cement head but he is probably right about the Euro market. It's a mess...What it DOES mean for us North Americans is that the European auto makers will be FORCED to sell the cool stuff we WANT over here...i.e. diesels and other performance variants...I know the state of the Euro economy green lighted the VW GTD for 2016. Now we just need the Tiguan TDI, a few more BMW diesels aka X3, etc. Their loss will be our gain.

Like Reply
- See 3 previous
- Sportyaccordy on Jul 07, 2013
  
  Not at all. The techs warranted by Euro's draconian taxes and policies will just be phased out. No brown diesel KERS wagon for you. Manufacturers build cars people buy.
  
  Like
- Klossfam on Jul 07, 2013
  
  @sportyaccordy You'd be incorrect, however. 25% of VW sales in June in the US were diesels. The GTD doesn't needed much N. American updating/emissions/safety work to come to this side of the pond. However, it is fairly common knowledge the Euros know North Americans want 'desirable' diesels...Hence vehicles like the MB GLK250 Bluetec (needed not much more than a urea tank to meet US emissions). They are on the way...including from Asia as well...Mazda 6 2.2L oil burner, etc.
  
  Like
- Inside Looking Out on Jul 07, 2013
  
  Diesels are not "cool stuff" and we certainly do not want it here for many different reasons like burning being dirtiest fuel or lung cancer. Keep "cool stuff" in Europe, no thank you. In general - less population = less cars = less pollution = less consumption = better environment. Reduction in human and car populations in Europe is a good think. Production cannot increase indefinitely at some point it has to start to level decrease for good.
  
  Like
- Lorenzo on Jul 08, 2013
  
  @Inside Looking Out If we improve the environment, it's for human benefit, not "Mother Earth".
  
  Like
L'avventura on Jul 07, 2013

Unfortunately, there really isn't any other market to flee to in the medium term. China, a safe haven for many European brands like Renault/Nissan and BMW/Daimler/VW, is teetering on the brink with a massive housing bubble, shadow banking system, trillions of dollars local government debt, and questionable financial instruments that make the 2008 US housing crash look mild. With Europe down and out for the medium term, any other economic shock will be like a meteor to the Yucatan Peninsula for the European automotive industry.

Like Reply
- See 2 previous
- Summicron on Jul 07, 2013
  
  Ironic that the people who coined the cliche will end up making us all live in "interesting times".
  
  Like
- Lorenzo on Jul 07, 2013
  
  Both Renault and Peugeot had a significant presence in Africa, thanks to French colonialism. Africa now has over a billion people, large petroleum supplies, and is a lot closer than China. French (and Italian) automakers need to look south across the Mediterranean Sea for salvation.
  
  Like
- L'avventura on Jul 07, 2013
  
  @Lorenzo If you follow TTAC contributer Matt Gasnier's blog on global car sales, you'll see that outside of Tunisia, the African market is dominated by the Americans, Japanese, and Koreans (with the Chinese quickly making headway): http://bestsellingcarsblog.com/category/africa/ Yes, Africa is home to a billion people, but most of those people really aren't car consumers. The market is nowhere near maturity where it can save the European brands. Last year, Toyota had the African sales crown selling 237,000 cars, GM took second selling 180,000 cars in Africa (largely with Isuzu pickups): http://www.reuters.com/article/2013/04/11/us-africa-summit-cars-idUSBRE93A07Z20130411 Let's put it this way, In Tunisia, Renault sold 6k cars in the entire year of 2012, Peugeot sold 5K cars. The volume is minuscule. http://bestsellingcarsblog.com/2013/03/07/tunisia-full-year-2012-renault-volkswagen-and-peugeot-dominate/ Renault will do fine, primarily because of Nissan, if anything happens, I'm sure Nissan will inject cash into Renault. Furthermore, the combined power of Nissan-Renault (with Dacia, Autovaz, etc under their wing) has near global coverage in all markets.
  
  Like
Onus on Jul 07, 2013

Now this guy has it. Declining birth rates which have well below replacement for many years in every western, and many eastern European countries is obviously going to make a market smaller than it once was.

Like Reply
Gasser on Jul 07, 2013

Having exported so many good paying jobs to lower cost countries, leaves the US without the strong middle, lower middle class to purchase new autos. Europe is a few steps ahead of the US in terms of $8 and $9 per gallon gas. When gas prices spike again in the US, we will see our car sales fall off a cliff. It's not just the Great Recession, it's a tectonic shift in JOBS which is reordering the auto industry and the entire economy. The economic ladder has lost a few rungs. Only the top end is left relatively untouched. Hence the growth in the luxury and near luxury segment and the stampede by BMW and Mercedes for US sales. The "new" starter car is a used one. Shrinking wages decrease disposable income for vehicle purchase. Think of what else is gobbling up your take home, compared to 10 years ago.

Like Reply
- See 5 previous
- Lorenzo on Jul 07, 2013
  
  Unlike Europe, we have a growing population, a poor mass transit system, wide open spaces, a mobile population and huge reserves of oil. We also have much lower fuel taxes, but a government that wants to emulate the Europeens with the kinds of taxes and regulations that have enervated Europe and are killing jobs here. A clean sweep in D.C., elimination of federal bureaucracy and a pullback on regulations would do wonders for our economy, the middle class and auto sales.
  
  Like
- Charliej on Jul 07, 2013
  
  @Lorenzo It is not government policy that is devastating Europe. There are simply not enough people of car buying age to keep production up to the previous level. The US has a less than replacement rate of births, but immigration has kept the US population growing. If immigration is curtailed, the US will be in Europe's place in twenty years. Immigration is the driver of prosperity in the US.
  
  Like
- 28-Cars-Later on Jul 07, 2013
  
  @Lorenzo I agree but in order to achieve those ends we would need either a major geopolitical event to occur or a coup-d'etat.
  
  Like
- Pete Zaitcev on Jul 07, 2013
  
  @Charliej It's the government policy that devastated natality in the first place, so the egg clearly came before chicken in this case. BTW, Russia reversed its demographic catastrophy with, you guess it, government policy.
  
  Like
- Inside Looking Out on Jul 08, 2013
  
  @28-Cars-Later The Baby/Economic boom usually happen after a devastating war, famine, plague or any other calamity. Long period of peace and prosperity usually leads to a stagnation and eventual decline of the civilization. No matter how hard you try you can do nothing about it. It is a natural course of events. There is nothing new under the sun. It happened many times in the past and is happening again. Take any advanced civilization - it started long decline and has eventually been was wiped out after reaching so called "Golden Age". After civilization reaches a widespread prosperity the formula "What I can do for my country (government, nation, etc)" gets gradually replaced by "What government (my country, nation etc) can do for me". And then people live as if there is no future, hate children because a nuisance they become. Exactly the current state of the Western civilization including USA.
  
  Like
- Summicron on Jul 08, 2013
  
  @Pete Zaitcev "It’s the government policy that devastated natality in the first place.." Only for the best; for the rest it rewarded spawnage and still does.
  
  Like