Ghosn: U.S. fiscal cliff a 'big gorilla' chilling sales growth
Nissan CEO Carlo Ghosn: “There is still a big gorilla out there, which is the uncertainty of how the U.S. is going to overcome the fiscal cliff."
Photo credit: BLOOMBERG
YOKOHAMA, Japan -- Nissan Motor Co. CEO Carlos Ghosn warned today that uncertainty surrounding the U.S. fiscal cliff is a "big gorilla" that threatens to slow U.S. auto sales growth next year.
The fundamentals of the U.S. economy are strong and the rebound in the U.S. auto market is solid, Ghosn said. But concern about the government's deficit is casting a chill on the outlook.
"There is still a big gorilla out there, which is the uncertainty of how the U.S. is going to overcome the fiscal cliff," Ghosn told Automotive News at Nissan headquarters. "The day we're going to have an answer to this, we're going to feel much more comfortable about U.S. growth."
Ghosn also downplayed concern that the financial crisis in Europe or the economic slowdown in China would spill over into North America. "If it exists, it's not significant," he said of any possible contagion. "And anyway, it's not visible."
The fiscal cliff is shorthand for a dilemma facing the U.S. government at the end of this year, when austere deficit reduction measures automatically kick in if no action is taken.
Lawmakers could let a number of substantial tax increases and spending cuts automatically kick in. This would reduce the deficit, but it also runs the risk of throwing the economy into recession.
Or they could override those tax increases and spending cuts. But that would fan the deficit and increase the chances of the United States lapsing into a Europe-style debt crisis.
Finally, they could choose a middle way that aims for a more moderate mixture of tax increases and budget cuts. But similar attempts to craft such a mix this year devolved into political brinksmanship and stalemate.
"Some people are more confident that we'll find the solution. Other people say, no, it may take a lot of debate, a lot of political juggling," Ghosn said. "We don't know.
"That's why we are a little bit cautious on the U.S."
Ghosn said the U.S. auto market is on a healthy trajectory, but that the uncertainty could take the shine off growth in 2013.
"The recovery in the United States is in good shape," Ghosn said. "Nobody is foreseeing even stagnation for next year, even though the growth may not be substantial."
Insubstantial growth for 2013 would contrast with the 15 percent sales surge the industry enjoyed through September. The seasonally adjusted annualized sales rate for September rose to 14.9 million units, the highest since the industry's 2008 collapse.
Nissan North America, however, trails the industry, with sales up 12 percent to 866,484 in the first nine months.
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