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Ghosn says car ownership is here to stay

Ghosn: "The traditional business of building cars and selling cars and owning cars is going to continue." Photo credit: BLOOMBERG

Personal car ownership isn't going anywhere, regardless of the rise of Uber Technologies Inc. and ride-sharing, according to the man who may oversee more auto sales than anyone else this year.

Global vehicle sales will continue to expand, with alternative forms of mobility making only a marginal impact or actually boosting demand, said Carlos Ghosn, the chairman of the alliance between Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp.

"A lot of people think this is substitution. It's not -- it's addition," Ghosn said in an interview Wednesday at Bloomberg's The Year Ahead conference in New York. "The traditional business of building cars and selling cars and owning cars is going to continue."

Ghosn's prediction flies in the face of forecasts that the emergence of ride-hailing and car-sharing services -- eventually coupled with vehicles capable of driving themselves -- will upend the more than $2 trillion annual business of selling new vehicles. Demand in developed markets like the U.S., Europe and Japan is stabilizing, but rates of ownership still have room to rise in markets including China and India, Ghosn said.

The group of companies Ghosn oversees is poised to sell about 10.5 million cars and trucks globally this year, enough to contend with Volkswagen AG and Toyota Motor Corp. for the industry's top sales spot for the first time. The alliance has forecast deliveries will jump to at least 14 million in 2022.

"The growth is going to be here, because the first thing people aspire to is an autonomous way of transportation," Ghosn said.

Partisans of the sharing economy aren't so sure.

"Our view is that individual car ownership is something that will go away because it is very inefficient," Jeff Holden, Uber's chief product officer, said in an interview this week with Bloomberg Television. Individual owners use a car only 4 percent of the time, he said, while with ride sharing a vehicle can be on the road 80 to 90 percent of the time.

"When you get to those kinds of utilizations what you see happen is prices go way down," he said. "So why would you own your own car? It's just a hobby at that point. It just doesn't make sense."

Born in Brazil, raised in Lebanon and educated in France, Ghosn, 63, is also an adamant believer in open borders and free trade.

"I have absolutely no doubt on the fact that in the long term, we're going continue to see an evolution and the development of globalization," which is "here to stay," he said.

"It's going to change, it's going to modernize, it's going to adapt, but there's no way you're going to put the economy back behind borders and you're going to build walls," he said. "Because frankly, this is not the way history is going, and it's certainly not the way wealth can be created and people can benefit."

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