NEW YORK (Reuters) - Nissan Motor Co (7201.T) and Renault (RENA.PA) expect “three to four more years of stagnation” in the European auto business, Carlos Ghosn, chief executive officer of both companies, said on Tuesday.
Speaking at an industry breakfast in New York, Ghosn said the companies were “planning for the worst” in Europe, where auto sales have fallen along with the continent’s economies.
“Is Europe going to be breaking?” Ghosn said. “I don’t think so. I think the euro will stay. I think at the end of the day Europeans will find the solutions in order to hold Europe together.”
Ghosn said if some countries, such as Greece or Spain, leave the euro, their exile would probably be temporary.
“I think we’re going to have some difficulty in front of us,” Ghosn said. “I have absolutely no doubt the next three, four years Europe are going to be at best stagnation. We are preparing for tough times.”
European consumers, facing tremendous uncertainty in their lives, are holding off from making large purchases like cars, Ghosn said. Companies need to be strong enough to make it through three or four tough years to outperform rivals, he said.
“My best scenario is zero to 1 percent (growth),” Ghosn said. “We have some worse scenarios for which we need to prepare as companies. For the moment, we’re planning for the worst, and the worst is now, and the car market is down more than 15 percent in France. There is so much uncertainty.”
In Japan, where the strong yen has made it difficult to profit, Nissan is staying put, Ghosn said. But companies do not suffer as much as the country suffers, he added, because they can add capacity in China, Mexico or elsewhere.
“Frankly, the level of the yen is unbelievable,” he said. “What happens is, you’re bringing investments outside Japan, bringing jobs outside Japan.”
‘STUNNED BY THE YEN’
Ghosn added that Nissan would always be a Japanese company.
“We’re not leaving; we are just making sure we’re not hurt too much by the level of the yen,” he said. “We are stunned by the yen at 78 or 79 to the dollar, which is a historical high. The country’s suffering. My duty is first to make sure Nissan gets unscathed through the turbulence to protect the company, without forgetting the fact we’re a Japanese company.”
Separately, Ghosn, 58, said he was not working toward a merger of the French and Japanese automakers and did not see one after his tenure.
“Would we ever move to a merger?” Ghosn said at a Wall Street Journal event. “I don’t think I will ever see it personally, even after I retire. If there is anything, it will be in the very, very long run even though the odds are very, very (small).”
Ghosn said shareholders saw the advantage of a single CEO flying around the world to run two global companies, and he said the constant travel was both tough and exhilarating to move between cultures.
But once he is succeeded, he would not recommend continuing to have one boss for both Nissan and Renault.
“I’ve been crucified as CEO of two companies,” he said. “I would not wish on anybody to go through what I’ve gone through in terms of personal life. Anything going wrong anywhere; you’re responsible. It’s not normal.”
Reporting By Nick Zieminski in New York and Bernie Woodall in Detroit; editing by John Wallace, Sofina Mirza-Reid and Lisa Von Ahn