What China's 'new normal' means for autos

Carlos Ghosn
Getty Images
Carlos Ghosn

The Chinese car market still offers huge growth and potential, the CEO of Renault Nissan has told CNBC , despite China Premier Li Keqiang telling global leaders that the world's second largest economy is set to shift into a lower gear.

At a keynote speech at the World Economic Forum in Davos, the Chinese leader said that the economy had now entered a "new normal" and suggested that annual gross domestic product (GDP) figures would now be closer to 7 percent, rather than the double-digits seen in previous years.

Li's comments could naturally lead to caution for some multinationals but Carlos Ghosn, the CEO of the Renault Nissan alliance told CNBC Thursday that he was upbeat on China's economy.

"It's not a surprise for us," he said at the Davos event. "We never fault China would grow double-digit forever."

The company has large exposure to emerging markets like China and Ghosn estimated that GDP figures of 7 percent would still mean 1.4 million additional cars - of various models - being bought in the Chinese market every year.

The auto manufacturer claims to sell one in 10 cars worldwide under eight brands – Renault, Nissan, Renault Samsung, Infiniti, Venucia, Dacia, Datsun and Lada.

Another market it has exposure to is the Russian market which has suffered due to sanctions and a currency crisis at the back end of 2014.

Ghosn told CNBC that it was going to still be a sour spot in 2015. He said that sales had fallen 11 percent last year and predicted around a 20 percent his year, despite incentives by the Russian government.

"It's going to be a difficult market," he said.