PARIS (AP) - Troubles in Russia's once-booming car market are dampening spirits at the Paris Motor Show.
PARIS (AP) — Troubles in Russia's once-booming car market are dampening spirits at the Paris Motor Show.
The European car market is seeing a fragile recovery after six years of decline, but CEOs in Paris are scaling back hopes that Russia could help drive the rebound as the sanctions imposed on the country for its involvement in the Ukraine crisis have dented confidence.
The sanctions from the U.S. and the European Union are one reason why many economists think Russia is heading for a recession.
Ford's new CEO, Mark Fields, told The Associated Press on Thursday that "weakness in Europe driven by Russia" was one reason for the company's recent lowered profit expectations for 2014.
With three plants and annual sales volumes around 120,000 units, Russia had been important to Ford Europe's goal of returning to profitability by 2015. The company announced this week that it expects profits of $6 billion to $7 billion this year, instead of $7 billion to $8 billion as earlier forecast.
Renault-Nissan CEO Carlos Ghosn also said the sanctions were having "an impact on the Russian market which as you know is in full contraction ... we are hit indirectly by this."
The Renault-Nissan alliance has the biggest market share in Russia thanks to its partnership with Russian brand Lada, and operates four factories in the country. Last year sales were 821,404, which equated to a 29.6 percent market share.
"The mood overall is a recovery in Europe," Ghosn said. However, he noted that it's an "imbalanced" recovery.
"We would like the recovery to be faster to be stronger like the one we have seen in the United States. But unfortunately, I think it is not in the cards for the moment," he said.