Nissan Motor Co (TYO:7201) of Japan is confident that they will be able to post record sales in 2017. This was revealed by Carlos Ghosn, who is the Chief Executive of this auto maker. Ghosn says Nissan’s increased sales will come because of a stronger global economic growth, which is sure to boost demand substantially.
Ghosn is so confident that he even said on Friday that the current volatility in the commodity and the currency markets won’t be enough to hold back Nissan. “Any impact will be offset by our strong growth”, he says.
Speaking to the press on Friday, the CEO said, “I think 2017 should be a good year. I think we will see reasonable economic growth, particularly in the car industry … I think we will establish a record for sales in 2017”.
Will Nissan’s Production Costs Increase Substantially?
In recent times, many observers have issued a warning that production costs of automobile manufacturers such as Nissan might go up if the President-elect Donald Trump goes ahead and renegotiates terms of the NAFTA or the North American Free Trade Agreement. Trump had said that he might even terminate the NAFTA. Costs are also likely to increase if the United States imposes strict tariff on cars imported from Mexico.
However, Ghosn is confident that Trump won’t do any of those. If anything, he will be promoting strong ties with the southern neighbor, he says. Nissan would be affected if Ghosn’s confidence is found to be wrong, as the business makes a lot of vehicles in Mexico and exports them to the United States. Nissan has quite a few production plants in the country.
NAFTA’s Future Is Strong
Ghosn says the future of NAFTA is strong. The President wants “America first” and American interest ahead of everything else. “American interest includes strong trade relations with Mexico”, he added.
As per the latest figures, the Japanese automobile maker has been able to sell 4.52 million between January and October. But 2015 was a better year, as Nissan (TYO:7201) sold a total of 5.42 million trucks and cars. It is unlikely that this figure will be reached even after adding the sales figures of the last three months of 2016.
Meanwhile, the Organization for Economic Cooperation and Development has reported that there is likely to be a 3.3 percent growth in car sales in 2017. For 2016, they had projected a 2.9 percent growth.