Nissan (Black) Friday: “Europe Is Going To Be Bad”

If any carmaker is hoping for an imminent turn-around in Europe, or is telling shareholders (I am looking at you, GM) that better times will be here again real soon now, then Nissan's CEO Carlos Ghosn has a bucket of ice-cold water for them. "Europe is going to be bad," Ghosn predicted today in Yokohama. Ghosn also serves as CEO of Renault, a company that is taking major lumps in a market that has been careening south for five years in a row now.  One would assume that a man in his position paints a rosier picture. Instead, Ghosn's pallet is all gloom. Ghosn knows what is on the mind of the European customer: "The European consumer lacks confidence, is confused, he does not know when Europe will get out of this crisis, and until he sees and understands what's going on in Europe, he is not going to come back buying cars." Ghosn does not "foresee any growth in Europe probably before the end of 2016, or even later." He thinks the worst is yet to come: "We are absolutely not forecasting any growth in Europe. And we are preparing to face Europe with a decrease in 2013, probably another decrease in 2014, and at best a stabilization of the market in 2015. We hope we are wrong. If we are, better for us." For the case that Ghosn's predictions are wrong (they rarely are), his companies "have capacity in Europe and we are ready to respond to any pent-up demand, even if we don't believe it is going to happen." Listening to Ghosn's dire predictions, one begins to believe that European turn-around may not happen until the end of the decade. And it must be brought on by governments that are tired of austerity measures. Says Ghosn: "I don't think the European countries can afford to continue to see a decline in the economy for much longer. At a certain point in time, the focus will be put on growth." In a Europe that is not known for speedy decisions, this refocusing could take many years. Ghosn recalled how he demanded action on the obscenely high Japanese Yen 5 years ago, and now finally, there is action. In the meantime, says Ghosn, "we are not banking on a recovery of the European market, because it may not happen." from The Truth About Cars http://www.thetruthaboutcars.com

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