CorporateGlobal car market decline has plateaued: Ghosn
The global car market, which has suffered acute demand contraction since September 2008 when economic downturn set in, has bottomed out and the industry was set for a sale of 60 million units in this year and the next, said Renault-Nissan Chairman Carlos Ghosn.
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“It looks like we are hitting a plateau,” said Ghosn at the India economic summit.
Ghosn said the global forecast for auto sales this year was above his expectation of 55 million units. Auto sales have been supported by various government-backed stimulus incentives but analysts have warned that another dip in sales might be experienced when these measures run out.
Ghosn added that though Renault’s India partnership has not progressed to the extent he had expected, the strong growth in the Indian market will see a successful venture in the future.
“It is not a shock, we were prepared for it. We are still waiting for the decline to end and resume our expansion and capacity build up plans. We are banking on the growth in India’s internal markets, which will triple in the next 10 years. People have questioned our venture, but we knew we might not get it right in the first time,” said Ghosn. Adding that Renault Nissan Automotive India Pvt Ltd will expand its Chennai factory as soon as market conditions turn more positive.
Renault’s partnership venture in India with Mahindra and Mahindra to make the low-cost Logan car started well. But sales then declined, with high taxation making the car lose on the competitive pricing turf. Production last year was less than a third of capacity and the joint venture lost Rs 490 crore ($105 million) in 2008-09.
India has been a recent bright spot for the global car market, with year-on-year sales growth at double-digits in the quarter ended September.
In September, auto sales in India totalled 129,683 units, an increase of 21 per cent from a year earlier.