Renault chief sees silver lining in auto sector slump

Aix-En-Provence, France: A current slump in the global automotive sector could give fresh impetus to plans for consolidation within the industry, the head of French carmaker Renault said.

"Something will have to happen," Renault chief executive Carlos Ghosn told delegates at a business conference in this southern French city.

Ghosn said the problems of the US sector could spur deals. "What is happening in the States at the moment does not bode well for the future," he said.

The world's largest automobile market is reeling from record gasoline prices, tighter credit conditions from banks and a slump in the American housing market.

US auto sales plunged in June to a 15-year low.

GM's finances

Although General Motors held onto its number one spot in the American market, some analysts have raised concerns over the financial state of GM, whose shares fell to a 54-year low earlier this month.

Ghosn has consistently said that Renault and its Japanese partner Nissan could revisit plans drawn up two years ago to expand their alliance to a third party, although he has also said that Renault is in no rush to do so.

Billionaire investor Kirk Kerkorian suggested a three-way union involving Renault, Nissan and General Motors two years ago.

Analysts have also speculated as to whether Nissan could expand its ties with Chrysler after they signed a deal this month to supply each other with vehicles.

At the conference, Ghosn also highlighted the cost pressures facing car manufacturers.

He said he had recently discussed the issue of rising steel prices with the European Central Bank (ECB) and reiterated his support for a low euro compared to the dollar. The weakness of the dollar has impacted European groups' overseas sales.

"As a car manufacturer, I want the lowest possible price for the euro," he said.

Renault shares closed down 0.3 per cent at 52.23 euros on Friday.

The stock has fallen around 46 per cent since the start of 2008.

Renault owns a controlling, 44 per cent stake in Nissan, while Nissan in turn has a 15 per cent stake in Renault.