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Ghosn continues to remain optimistic about the country's growth potential. "When you look at the level of motorization of the country we are still below 100 cars per 1000 residents in India. While in countries like Brazil we are already at 200, in Russia we are at 300. In China we are already moving at 150 cars," he says.
Reuters had reported in July that Renault and Nissan Motor combine will invest USD 2.5 billion in the country over the next five years.
Business leaders around the world are optimistic about growth in 2014. Ghosn too echoes similar sentiment. He sees emerging markets making a come back this year after the disappointing 2013. He also sees Europe continuing on its recovery path, along with the US and Japan. He says car sales are still below the pre-2008-09 crisis level in the US. He hopes to reach that level next year.
As far as Europe is concerned, he believes recovery won't be as strong as is witnessed in the US. Between 2008 and 2013, Europe saw a 25-30 percent decrease in car sales. This is the first time that there has been any sign of recovery, he adds. He sees a 1-3 percent growth between now and three-four years from now in Europe. He believes car sales are going to follow the macro economy because there is a strong correlation between car sales and consumer confidence.
Below is the verbatim transcript of Carlos Ghosn's interview with Menaka Doshi on CNBC-TV18
Q: What do you make of the global economy in 2014?
A: Slightly better. I don't think anybody is foreseeing for the moment anything that is going to pull us down. We see the emerging markets (EMs) coming back this year after a disappointing 2013 and a continuous recovery into the other markets particularly in Europe. US should be doing well, Japan also is on the right track so 2014 should be a good year.
Q: What do you make of North America, that has had a spectacular year last year but I did read in one of your early interviews this year that you are expecting that market to peak off a bit?
A: No, I think what we are seeing in the US particularly is that the level of sales as far as cars are concerned has still not recovered. So we have had this strong recovery but we are still below the level so I think we are now going to be reaching this level which we hope will be the case next year. We are going to be some kind of slower growth, moderate growth in the US.
Q: The European economy does seem to be at a turning point and one that brings it back on to the growth track. How sustainable is that going to be for 2014 because Europe continues to be a worry?
A: In Europe we have had a 25-30 percent decrease in car sales between 2008 and 2013. So this is the first time we see some kind of a recovery. It is not going to be very strong, we are talking about 1 percent of increase in 2014 compared to 2013. So we are way down compared to what it was in 2007. So it will be very reasonable to think that we are going to have a slow recovery in Europe. The numbers are not going to be tremendous but having a 1-3 percent growth between now and three-four years from now is a very reasonable scenario.
Q: What about car sales, they have been in a difficult spot as well?
A: I think car sales are going to follow the macro economy because there is a strong correlation between car sales and consumer confidence. And for the first time we are seeing the numbers of consumer confidence moving slowly up in Europe. That is why we are confident that the recovery of the economy in Europe will be supported by the recovery of the car sales but don't expect any miracle, it is not going to be a very strong recovery like the one we have seen in the US.
Q: Are you disappointed with India, it has been a difficult last year for auto sales and broadly speaking many foreign investors are disappointed with the fact that the country hasn't capatalised on the momentum it had a few years ago?
A: You are right - 2013 has been a disappointing year for all the industries in India. But we all think that 2014 should be a year of slower recovery from a disappointing year 2013. But our optimism about the potential of India is intact. When you look at the level of motorization of the country we are still below 100 cars per 1000 residents in India. While in countries like Brazil we are already at 200, in Russia we are at 300. In China we are already moving at 150 cars. India is going to take off there is no doubt about it and we hope that 2014 is going to be the first sign of recovery and then we will move up from here.
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