In the face of plunging global new car sales, the head of Nissan and Renault, Carlos Ghosn has called on governments in the USA, Europe and other developed nations to help carmakers secure the funding to continue the greening of the car.
The keynote speaker at this week's Los Angeles Auto Show, Ghosn told assembled motoring writers and automotive execs from around the world that while cars were "here to stay", zero emission cars were the "end game" that should be pursued. He warned, however, that carmakers could not continue to pursue the goals of sustainable mobility without viable finance options and called on governments to help secure long term, competitively financing.
Ghosn described the financial conditions the world was facing as "very serious". Speaking to a small group of Australian motoring writers after the keynote speech, the auto industry's busiest man said the conditions were unique. He likened some aspects to the period of the Great Depression.
"The present situation we are facing, of financial or credit disturbance, and financial dysfunction plus the deep recession in the auto sector -- I've not seen anything similar in my own experience... And the problem is you're not sure the worst is behind you.
"You are in a situation you cannot say we are at the end of the beginning or the beginning of the end. Is the financial market stabilised? Will it get better from here? It's all speculation at the moment.
"The United States and the rest of the world, and there's absolutely no doubt about it, are today in a very serious and worrying situation. The credit flow is far from normal, and the recession that began in the US is now spreading. It's going to be deep and affect everybody," Ghosn said.
US sales in October were down 35 per cent -- the worst month for 25 years, Ghosn said. From around 16 million new car sales in 2007, the annualised rate had plunged to 10.6 million. According to the Nissan boss, sales are already down 20 per cent in Europe and 10 per cent down in Japan and "all the emerging markets are starting to turn south..."
Australia has fared better, but is still well off the month on month highs of earlier this year.
"Probably the only market only still going is China," Ghosn opined.
He said in such conditions it was impossible for companies to invest heavily in the long-term development required to shift mainstream vehicles away from an oil-fuelled base.
Referring to GM, Ford and Chrysler's current attempt to secure $US25b in low interest aid from the US Government, Ghosn commented: "Part of what the big three companies are facing is the same as what all companies are facing -- which is can you make investments for the long-term, in order to bring more fuel-efficient and more environmentally sound cars in the future... at a time when you can hardly get loans for the short-term. And when you get them, you get them at cost which is obviously is very high for any long-term endeavour.
"So today the industry is in a situation where if you really want to push long-term objectives, you don't have any finance available which is compatible with long-term objectives.
"When the big three are asking and obtaining $25 billion of long-term loans at reasonable cost, in order to transform their production into a fuel-efficient one, I feel it's very logical...
"And it's not only going to be the big three," Ghosn warned. He said European manufacturers would be seeking similar support from their respective governments.
In the United States manufacturers have already pulled back on launching or continuing to produce some green models.
Chrysler has ceased production of its Dodge Durango and Chrysler Aspen mild hybrids and GM has delayed the release of the Saturn Vue -- essentially a hybrid two-wheel drive version of the Captiva.
Industry pundits have also thrown doubt on GM's ability to finance the long term development of the Volt extended range electric vehicle. Meantime even Toyota has been hit, with reports the giant will delay the opening of a new hybrid-specific plant in the US state of Mississippi.
In contrast, the Nissan boss said the company would postpone other projects before its electric vehicle program would suffer.
With Nissan pledged to release a mass-market electric "family car" in 2010 in the USA and Japan and market it worldwide (including Australia) from 2012, the maker now considers EVs as core to its line-up.
"No I don't think so," Ghosn replied when asked whether he would delay EV development in the face of tight credit conditions.
"I think we would push back other projects if the situation was to get worse... We would probably push back other projects before touching the electric car...
"The electric car is frankly the core demand, the core product, the core offer that we will be bringing [to market], so it's going to be the last thing we will move. We will stick to it through 2009," Ghosn said.
To comment on this article click here