NEW YORK -- The ongoing debt crisis in Europe will force Renault to operate in "crisis mode" in the region, CEO Carlos Ghosn said, while Nissan will be in a similar situation in Japan due to the strong yen.
Ghosn said European automakers will continue to weaken if not permitted to restructure and cut jobs by governments in the region.
"Over a period of five to 10 years, I have no doubt that the lack of restructuring in Europe, particularly for those carmakers who need it, is going to be a drag on their potential strategy in the future."
Ghosn said countries in Europe are not encouraging the restructuring of the industry. "As long as you cannot restructure, you may survive, but you are weakening all the time," Ghosn said on Tuesday at an automotive forum in New York.
The French government, Renault's biggest shareholder with a 15 percent stake, has repeatedly warned the automaker that it should not cut jobs in France.
Ghosn also said that the strength of the yen continues to put Nissan at a disadvantage.
While Ghosn was cautious about markets in Japan and Europe, Nissan continues to make gains in the United States. U.S. data released on Tuesday showed a 12.5 percent increase in sales for March.
In its home market of France, Renault suffered a 30 percent drop in sales last month, to 42,908 vehicles. Renault's commercial director for France, Bernard Cambier, said the automaker forecasts a decline of the order of 10 percent in the market in 2012.
Europe's auto market is set to decrease 5 percent this year because of weak economic growth, ratings agency Standard & Poor's said last week. The continent's carmakers are also struggling with manufacturing overcapacity, which executives estimate at around 20 percent.
Sources: Reuters and Bloomberg