Nissan's CEO says U.S. auto market in recession
2/22/2008SEOUL, South Korea The head of Nissan Motor Co. said even if the United States is not in recession, its auto industry is.
"We are very lucid on the situation of the industry that there is a recession in the United States, at least in the car market," Chief Executive Carlos Ghosn told reporters, saying automakers face rising costs for iron ore, precious metals, aluminum and other materials.
"These represent risk for the industry," he said.
Ghosn, who is also president and CEO of Renault SA of France, expressed optimism that the market will improve. Renault owns 44 percent of Nissan.
The American auto market "will not stay in recession for a long time," he said.
U.S. car and truck sales totaled 16.1 million vehicles in 2007, down from 16.6 million the year before, according to Autodata Corp. It was the worst performance since 1998 as rising gasoline prices and declining home values sapped consumer confidence.
Economists and analysts are forecasting a further decline this year.
Ghosn said the cost of raw materials, increasing for the fourth straight year, must come down.
Earlier, Ghosn told students at Seoul's Korea University that global automakers need to focus on emerging markets. During a visit to South Korea to meet local Nissan and Renault officials, Ghosn said growth in countries such as Russia, China, India and Brazil will be key.
"No car manufacturer can ignore these markets," Ghosn said.
Ghosn said the U.S. and Japanese markets have been stagnant for the past four years and prospects for this year are not good.
The Russian market, meanwhile, expanded 25 percent last year as did Brazil's, he said, with China just below that at 23.4 percent, and India growing at 20 percent.
Renault signed an agreement in December to become a 25 percent shareholder and strategic partner with Russian automaker Avtovaz.
Ghosn said that Russia will surpass Germany in the next two years as Europe's largest auto market.
"Nobody can ignore Russia," he said.
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