Ghosn Sees ‘Bright Spots’ for Car Sales as Europe Recovers

Apr 16, 2014 9:11 am ET

(Updates with Nissan share price in sixth paragraph.)

April 16 (Bloomberg) -- Global carmakers will face rising demand this year as sales in China and the U.S. expand and Europe starts to grow again, Nissan Motor Co. Chief Executive Officer Carlos Ghosn said.

“There is a big recovery coming in Europe” after five years of contractions, Ghosn said yesterday in an interview at the opening of a Nissan plant in Resende, Brazil. Elsewhere there are “lots of bright spots in 2014, and without any doubt you are going to have a lot of car manufacturers preparing for the future,” he said. Sales in some developing countries in Africa and the Middle East also are “booming,” he said.

Nissan opened the 2.6 billion reais ($1.2 billion) facility in Rio de Janeiro state as it seeks to more than double its share of the Brazilian auto market to 5 percent by 2016. The Yokohama, Japan-based company is targeting sales of 115,000 cars this year in Latin America’s largest economy, a 47 percent increase from 78,000 sold in 2013.

While the Brazilian auto market is forecast to grow more slowly than its potential this year, and possibly in 2015, Nissan will expand at a faster pace as it ramps up production of the new plant, Ghosn said. The market’s development after 2015 will be driven by government policies and infrastructure investments, he said.

Tremendous Growth

“There is tremendous growth embedded in producing locally,” Ghosn said. “We have no doubt about the potential of the country. Now the speed at which Brazil is going to move all this potential will depend on the economic policy of the government of Brazil and also depend on how much investments are being made in terms of infrastructure. We are going to watch very carefully.”

Nissan, Japan’s second-largest automaker, rose 1 percent to close at 911 yen in Tokyo trading today. The stock gained 3.1 percent during 2014, beating the 12 percent fall of the benchmark Nikkei 225 Stock Average index.

The slowdown of Russia’s auto market amid political instability is unlikely to disrupt the revival of demand in neighboring Europe, Ghosn also said during the interview.

“I don’t think it is going to reverse the trend we are seeing,” he said. “We are seeing an increase of the European market and this may last for a while.”

--With assistance from Alan Ohnsman in Los Angeles.