RIYADH, Saudi Arabia (AP) — The head of one of the world's largest car companies said Sunday that auto manufacturers are going to be in defensive mode for the next couple of years as they cope with the economic meltdown.
Nissan Motor Co. Chief Executive Carlos Ghosn also said he expects manufacturers to reduce their investments and inventory as car sales continue to fall.
Ghosn said that in 2007, global auto sales were 69 million cars, while last year it was 63 million. But the trend in the past two to three months indicates car sales worldwide this year are likely to reach only about 55 million cars.
"That's the ball game on which we have to prepare ourselves," Ghosn told reporters at the Global Competitiveness Forum, an economic gathering in Riyadh, Saudi Arabia.
He said car manufacturers are teaming up to try to reduce the effect of the crisis.
"For the next couple of years, you're going to have practically all car manufacturers in a defensive mode, which means reducing their inventory, reducing their investments," said Ghosn, who also heads French partner Renault S.A.
"We are practically all considering that it's going to be a slump, which is going to last one or two years," he added. "It's not a short-term kind of correction. It's a real slump."
Ghosn said the car industry is already under a lot of stress from three sources: the recession, the credit crisis and foreign exchange volatility.
"If it was only a recession, the car industry … would react very quickly," he said, noting that the combination of factors makes the situation more difficult.
Copyright 2009 The Associated Press.