Nissan Motor CEO Carlos Ghosn said he believes auto industry in Europe will be affected many years from now on by excess capacity and shrinking demand.

The automaker expects mediocre years in Europe as it already deals with overcapacity in this region which “will not see any kind of Armageddon, ” he said. The debt crisis caused the auto sales reach their lowest level in 17 years, due to slowing economic growth, rising unemployment and shrinking demand. Ghosn has decided to diminish its capacity to match demand.

“The overall market is shrinking, so I would expect Nissan to cut back on production,” said Mitsushige Akino, executive director at Tokyo-based Ichiyoshi Asset Management Co. “It’s very likely for the current situation in Europe to continue for several years, and Nissan’s sales growth will probably be in line with the market.”

In August Nissan sold 41,832 units in Europe, up 3.1% from the same period last year. The automaker hasn’t given up its plans to manufacture 5 million cars this year, focusing on other markets such as the US and Southeast Asia. Ghosn expects the new Altima midsize sedan to become the best-selling model in the US, where the industry shows signs of recovering.


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