Detroit: Carlos Ghosn said Renault and Nissan might consider adding further production capacity in the US because its two car plants there were nearing full capacity.
Renault and Nissan's chief executive also said that the companies were scaling back inventory, limiting investment and cutting costs to prepare for a forecast three per cent drop in the European car market in 2012. "We know that the first quarter is going to be bad," he said. "We still believe that overall the year will be down 3 per cent in Europe."
Europe's car market fell by a little more than one per cent in 2011, and most carmakers and forecasters predict a further contraction of up to 10 per cent this year.
"We're doing what everyone is doing," Ghosn added. "In this case you reduce your inventory, you make sure you limit your investment to exactly what is necessary, and watch carefully your cost — and for the rest you pray."
The risks to carmakers in Europe contrast with buoyant demand for cars in the US, where sales rose by about 10 per cent last year and where Nissan is performing better than most of its rivals.
Ghosn said that Nissan's car plants in Smyrna, Tennessee and Canton, Mississippi, would be running at full capacity by early 2013. The carmaker is expected to make a decision on building a plant in Mexico soon, but might expand further in the US, he said.
"We are seeing a shortfall of capacity," Ghosn said, when asked about plans for more US expansion.
"Yes, it is possible that we increase capacity in the US in the future."
Europe has been a significant discussion topic at the Detroit auto show as world carmakers worry about the risks to their business from the continent's sovereign debt crisis.
Sergio Marchionne, the chief executive of Fiat, told reporters that Europe's car market would not be any better this year than it had been in 2011.
Lewis Booth, Ford's chief financial officer, told the Financial Times that Europe was currently a "tough market" and that the US carmaker was making unspecified contingency plans in case the crisis got worse.
Ghosn said Renault was monitoring its inventory on a weekly basis to avoid producing more cars than customers wanted. "We want to make sure our salespeople never miss a car, never miss a sale," he said. "But at the same time, we're not going to be carrying out production beyond what's necessary."
— Financial Times