Renault CEO Carlos Ghosn Expects Auto Market in Europe to Fall Further in 2014 and 2015 image

Renault CEO Carlos Ghosn predicts that auto market in Europe will continue to further shrink in 2014 and 2015 as increasing unemployment continues to affect demand.

“I think that 2014 and 2015 are going to be at best stable in Europe,” Ghosn said. “More realistically, we may see another decrease — maybe not as violent or as deep as the ones we have seen for the last years,” he said.

Carlos Ghosn added that he does not know what could trigger economic growth, especially when it comes to the auto industry. The CEO said he is preparing Renault for ‘several years of market stability, at least.’ In May auto sales dropped to a 20-year low due to the increased level of unemployment which kept customers away from buying new vehicles.

Ghosn also believes that global auto market will vary ‘from record to record’ thanks to the emerging markets, where the number of vehicles per inhabitants is much under the levels seen in the US and Europe. The slowdowns currently seen in Russia, Brazil, China and India are only temporary.

Currently Renault is implementing a reorganizing production strategy as sales continue to drop in Europe due to the recession. The French automaker will manufacture the next Nissan Micra subcompact in France beginning with 2016, part of its plan to use excess capacity. The automaker is also reducing its workforce in the home market by 17% and also freezing wages in exchange for a promise not to close any plants in France in the following three years.

“We’re trying to be very creative” and we’re “hoping to cross the crisis without too much damage,” Ghosn said.