Straightline

Nissan-Renault chief executive officer Carlos Ghosn predicts a grim year for automakers this year.

Ghosn told a group of reporters at the Detroit auto show that he predicts sales will drop to 16 million vehicles in 2007, from this year's 16.56 million, a number that was lower than Nissan had forecasted.

Worse, Ghosn said all automakers will be in their third year of rising commodity prices, which must be absorbed by automakers and can't be recovered by increasing the price of vehicles. Further, it isn't merely a U.S. phenomenon; Ghosn expects sales to be lower and pressures to heighten in all of the developed markets of the world, which account for about two-thirds of all vehicle sales.

 "That's going to have serious consequences for all automakers," Ghosn said. Such pressure will cause company failures and force more consolidation in the auto industry.

Of course, Ghosn projects Nissan will fare better than others.

—Michelle Krebs