High oil prices to blame for decline in automobile markets
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Hema [2011-05-20]
PARIS -- Carlos Ghosn, executive president of the French automotive group Renault-Nissan, has said that a "large portion of the recession" that is being experienced in the world automobile market is as a direct result of rising oil prices and volatility of raw materials.
"Much of the recession on the automotive market in the United States, Japan and a number of countries in Western Europe is amplified, even caused by the significant increase in oil prices, but also the volatility of raw material prices," Ghosn was quoted as saying Thursday on France's Europe 1 radio.
This "will help the automobile to transform itself," said the French executive, referring to an increased drive for innovations such as electric and fuel-cell-powered cars or even the development of connectivity between vehicles.
"For example, In France, from as early as 2010, you'll start to see the emergence of electric-powered cars" that would be much more "reliable and modern," said the Renault-Nissan boss, adding that the prevailing high fuel prices would push companies to try to be more innovative.
In the interview, Ghosn also took time to reiterate that France's Renault had "never at any time considered" to close down factories in France, its main market, but was instead angling to expand its share of the overseas car-market."
"At present, sales of cars in France are doing well," said Ghosn, wondering why the company would contemplate such a move in a market that was growing and showing a lot of positive signs.
Asked to comment on ongoing rumors and speculations regarding a possible abandonment of his dual presidency of both Renault and Nissan, the French executive dismissed talks of a quit as pure "speculation."
"I do not think this is anything new," said Renault-Nissan boss, adding that he was there to stay at the helm of the two companies for "as long as it is deemed necessary."
Further, Ghosn expressed support for the reduction of VAT charged on petroleum products, which is one of the measures advocated by President Nicolas Sarkozy to deal with growing concerns over the rising fuel prices that have already led to a strike by fishermen in the country.
"Whenever you take money from the state coffers to give citizens, is all very well," said Ghosn, adding that President Sarkozy's plan could potentially alleviate suffering and agony among French motorists.
Meanwhile, Ghosn has described "diversification" in the activities of company as a "very important element of performance." "When you install diversity at the heart of a given business, you are bound to become more creative, to better understand the markets and it's much more motivating for the staff," according Ghosn.