Renault-Nissan chief executive officer Carlos Ghosn believes the struggling Russian auto market might lose one third of sales over the next few years as the recession continues to deepen.
The auto executive also predicts that Russia’s car market might shrink by around 20 percent in 2015, while also seeing “one-third of the Russian market disappearing in a couple of years.” During an interview with Bloomberg Television in Paris he said: “It’s already pretty bad. With the forecast we have in 2015, we should be at the end of the tunnel, but we never know.” The French Japanese alliance is now under tremendous pressure in the Russian market after it took control over local leader AvtoVAZ to secure a powerful position in the country. According to the Moscow-based Association of European Businesses, or AEB, new car registrations and light commercial sales last year dropped around 10 percent to around 2.5 million vehicles. Combined sales of Renault, Nissan and AvtoVAZ – Russia’s biggest carmaker – also fell 7 percent last year to 764,245 vehicles – though their total market share soared from 29.6 percent in 2013 to 30.7 percent last year.
Analysts believe the primary danger now comes from the ruthless combination of crumbling sales and depreciating value of the local currency – with alarm signals already triggered by Ford and GM as well – the former posted overall European losses on the back of the Russian market downturn. Renault and Nissan indirectly have a 50.01 percent stake in Lada-maker AvtoVAZ, part of a strategy to command at least 40 percent of the Russian car market by 2016. The alliance has somehow shielded itself from the foreign-exchange fluctuations by investing into manufacturing plants and the development of a network of local suppliers.
Via Automotive News Europe