Carlos Ghosn predicts the future of the auto industry

Carlos Ghosn is the man credited with turning around the fortunes of Nissan during the 1990’s, bringing it back from the brink of bankruptcy and turning billion dollar losses into profits within a couple of years. At the same time he also headed Renault, which is now on track to boost its sales 30% within the next 12 months. The Brazilian born CEO has now given insight on the state of the auto industry and where it’s headed in the not too distant future.

Ghosn sees the auto industry as being under strain and in need of major boost, just like Nissan was only a decade ago. The weakening U.S. market, rising oil-prices and the race among carmakers to dominate new markets is a problem for all labels and it’s one that has most of them stumped.

During his interview with the Wall Street Journal, Ghosn said electric vehicles will play a much larger role. Alliances between brands will also rise. Renault-Nissan, for example, is planning to develop new electric vehicles through its Project Better Place deal with Shai Agassi and will also supply cars to Chrysler.

One of the problems carmakers are facing in the U.S., he explains, is that there’s major movement towards small cars. The problem lies in the fact that most carmakers, especially the Detroit 3, don’t make any money in the segment. Some carmakers simply won’t survive, he said, or they will be taken over. Markets outside North America, on the other hand, are booming. Russia, India, China and Brazil all saw sales increase more than 20% last year, so there’s still plenty of opportunity left for the major carmakers, Ghosn said.

As for China and India, Ghosn is hoping to develop his own version of Tata’s $2,500 Nano. Together with India’s Bajaj Auto, Renault-Nissan will build a rival model but it’s still several years away at the earliest.