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US car market in recession, says Nissan CEO

TOKYO: Nissan Motor Co Chief Executive Carlos Ghosn said on Thursday demand for new cars in the United States was weakening this year as he had feared, citing that as a risk in achieving the company’s sales targets.

“2007 is not going to be an easy year, particularly in the US market which is already heading toward a kind of recession in the auto industry,” Ghosn, who also heads Nissan partner Renault SA, told Reuters. “I was the first one to say in January that I see a market of 16 million cars for the year, and I was probably the only one. Now it looks like it’s a kind of consensus,” he said in an interview.

Nissan, Japan’s third-biggest automaker, earlier postponed its plan to achieve its three commitments laid out under the “Nissan Value-Up” business plan, mainly to account for weaker-than-expected vehicle sales in the United States and Japan.

The plan had called for an operating profit margin at the “top end” of the industry and a 20 percent return on invested capital in 2007/08. A vehicle sales target of 4.2 million units was slated for completion a year later.

Sales of new light vehicles in the United States for the first three months of 2007 fell 3.8 percent from the year before to 3.887 million units on a seasonally adjusted annual rate. Nissan’s sales during the same period grew 3.2 percent, but that was off a low base and against initial expectations of double-digit growth.

Ghosn also said he had not changed his view on considering an alliance with a US-based automaker for the Nissan-Renault partnership, though he repeated that now was not an appropriate time to pursue that strategy.

Asked whether he was interested in a tie-up with Chrysler, the US arm of DaimlerChrysler AG, Ghosn said: “I don’t think you can pursue an avenue like this unless your stakeholders feel very good about your performance. “As long as there are doubts and hiccups in your performance you have to stay away. That’s why I’m saying it’s not the right timing.” He added, however: “I didn’t change my strategy, but a strategy is worth nothing if you cannot execute it well.” Ghosn had expressed interest in forming a three-way alliance with a US-based automaker to cement a global partnership that now spans Japan and Europe, but has said there was no urgency after talks with General Motors Corp failed to produce a partnership last fall. reuters

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