FYI
02-10-2005
Nissan's Carlos Ghosn
(Enlarge photo) Nissan's Carlos Ghosn
Carlos Ghosn is like the old E.F. Hutton ? when he speaks, people listen. But rarely does he grant one-on-one interviews as he did with Inside Line at the recent National Automobile Dealers Association convention in New Orleans.
Ghosn is credited with the dramatic turnaround of Nissan Motor Co. Ltd., of which he is president and CEO. This April, he adds the title of president and CEO of Renault to his duties. French automaker Renault holds a controlling interest in Nissan.
Prior to joining Nissan in 1999 as its chief operating officer and later becoming its president, Ghosn was Renault Group executive vice president in charge of research, engineering, vehicle development and manufacturing, powertrain operations and purchasing. He worked for French tiremaker Michelin for 18 years before joining Renault in 1996. Among his Michelin duties were chairman and CEO of Michelin North America and overseer of the company's restructuring after its purchase of Uniroyal Goodrich Tire Co.
What is your company's biggest challenge? For us and for everyone in the industry, it is making sure the customer experience is one that is clearly ahead of the competition and one that the customer looks at as a delightful experience.
Product quality has been a problem area for Nissan, especially interiors. What are you doing about that? We are recognizing them first, reacting to them and improving them quickly. For example, when the Altima went on the market, it was very successful. But even though it was successful, the negatives we got from customer feedback [indicated that] we could do a better job in terms of the interior quality. We took to heart the reaction of the customers. We made a lot of modifications of [the Altima's] interior this year, and we're getting great feedback.
Creative designs helped Nissan's turnaround. How do you maintain creativity on the second generation of vehicles? You will see bolder, more impactful designs. Our designers are talented, and they also are working in an environment where the role of design is recognized and is balanced with engineering, marketing and product planning. We also try to create a high level of adherence between design and performance of the car itself. A design is appealing but only becomes successful when you drive the car and you recognize the high level of consistency between the design and the car's performance. An inconsistency between the two will result in a fad that will not last.
Can you give an example? One of the successes of the Z is that the design suggests a kind of car. You get into the car, drive it and you recognize it. Same for the Murano, the Armada, the QX56, the Titan. What's important is not the design itself, but the consistency between the design and the driving performance. And you'll also see more consistency between the outside and the inside of the car.
Is it harder to be as creative the second time around as it was the first? I don't think it's harder. It's different. You have different advantages and weaknesses. Today, people are under more pressure because the first wave of products has been successful. They want to make sure the second wave is just as successful. On the other hand, they aren't working for a financially struggling company that is lacking in resources, systems and tools. Today, the tools are available, the systems exist and people are more confident and have more experience.
When you take over Renault, what is your biggest challenge? My biggest challenge is to make sure moving into this position where I am at the same time president of Nissan and president of Renault that it will not be perceived by anybody as Nissan is weakening or Renault is weakening. On the contrary. We want them to know there is a new life brought to each one of the companies.
Do you anticipate changes in the Renault-Nissan alliance? I'm consistently saying that this alliance is not going to change the way it is working with two different companies, two different identities, two different alternative organizations working side by side. We're looking for synergies and commonalities for the sake of better performance for each company through lower costs, higher quality and faster reactions, not for the sake of the synergies alone. We do things that make business sense that translates into clear benefits for the customer, shareholder and employees.
In Japan, they are worried Nissan will be neglected. How do you reassure them? It is going to be an opportunity to grow by giving them more empowerment and more space for their talents. And we're doing it in a way that it is not a risk because I'm not leaving. I'm still there. I'm still in charge.
Where do you see Nissan opportunities in the future? Our first opportunities will be geographical expansions. There are still a lot of markets where we are not present ? Russia, India, Africa, South America. We launched in China but we'll continue to develop there.
Where are other opportunities for Nissan? The second set of opportunities is in our existing markets. For example, in the U.S., there are six segments where we're not represented. The [subcompact] is one where there is clear opportunity.
And what about Infiniti as a global brand? The third opportunity will be to leverage Infiniti. Infiniti is an established, successful experience in the United States, but there is opportunity to expand all over. In commercial vehicles, we can be a much bigger player. Ideas for growth ? we have many. Our challenge is to select them in terms of their potential return to the company and set clear priorities in order to act in a disciplined manner.
Will we ever see Renault return to the U.S.? In the midterm ? the foreseeable future ? I don't think it's likely.
Why not? The U.S. is a high-risk, high-opportunity market. It's high risk because you make a huge investment at the beginning to have a shot at it. And when you get a shot at it, you're not sure you're going to be successful. So if you're going to do this, you'd better make sure everything has been set in a very disciplined manner.
Will we see a Renault sold as a Nissan or Infiniti in the U.S.? It doesn't make sense. A brand has to be on its own with a clear character. A brand using another brand ? I don't believe in it.
Define the Nissan brand. Nissan is a brand that has a character of being bold but at the same time, thoughtful. The Murano is bold, for example. We want to give the brand the opportunity from time to time to make an audacious move. But a move that is not built on short-term thinking and not fashion but is thoughtfully prepared and affordable.
Define Infiniti. Infiniti is about strength and grace. It's about aesthetics. But it is about beauty as well as strong performance and horsepower.
In the U.S., Japanese automakers are taking market share from the Big Three, which are at their lowest point in history for share. Do you fear trade friction between the two countries? I don't for the simple reason that Nissan's growth of U.S. shares has come from U.S. sourcing, U.S. assembly, U.S. production, U.S. marketing and U.S. design. I think it could have represented trade friction if this growth was backed by imports.
What's the next big thing? There are many trends coming but the most significant and most catchy one is around the protection of the environment ? hybrids, fuel cells, better combustion engines, better diesel engines. We see this globally.
When will Nissan sell a hybrid in the U.S.? The Altima in 2006.
What's another trend you see? A second significant one is how to transform the car into a place where time is being used for more than driving. If you drive for an hour, you have the impression you lost an hour. More and more you will have the possibility to call in a safe way, to communicate with the car, to receive information in the car. The challenge is to create a space where you can do other things in the car than just drive it.