The Truth About Cars » Ghosn The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Jul 2014 11:00:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Ghosn Ghosn Sees No European Turn-Around Anytime Soon, Or Later Sun, 07 Jul 2013 11:03:57 +0000 IMG_3274

Nissan and Renault co-CEO Carlos Ghosn still sees a future in the electric car, it’s the European market that doesn’t have great prospects of a turn-around as far as Ghosn is concerned.

Ghosn does “not expect any strong recovery in the troubled European auto sector in the medium term,” Reuters reports from France. “I am preparing Renault to several years of market stability, at best,” Ghosn said. That’s stability at low levels not seen for 20 years, mind you.

While some cling to hopes for a quick turn-around (hello, Opel), Ghosn repeatedly warned of a “structural decline” of the European car market.  Simple population studies show that there will be fewer and fewer new car buyers in Europe for many decades, with no relief in sight.

Ghosn’s faith in electric car sales however remains unbroken. Between the two of them, Renault and Nissan will have sold a total of 100,000 electric vehicles so far by the end of June, Ghosn told Reuters. Ghosn said the alliance’s investment in hybrid and electric vehicles “is not a bet, it is a certainty.” Other than Europe, EV sales can only go up.

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Inside The Industry: If It’s So Hard For Infiniti To Come To Japan, How Easy Do You Expect It To Be For Other Brands? Wed, 15 May 2013 12:31:03 +0000 IMG_4647“So would this new Infiniti Q50 be the new JDM Nissan Skyline?” asked TTAC commenter luvmyv8. One of the benefits of having a TTAC editor on the other side of the globe, as opposed to in a basement in Peoria, is that we can get first-hand answers to luvmyv8, straight from Nissan’s and Infiniti’s top men.IMG_4161

“What I can tell you today is that the Skyline name will continue in Japan,” said Nissan’s CEO Carlos Ghosn in regards to luvmyv8. When pressed further, Ghosn said that bringing Infiniti to Japan “has always been the object of a lot of discussion within the company.” Ghosn started his answer with a mild put-down:

“With the arrival of newcomers … by Johan de Nysschen now heading the Infiniti business, he also brought with him a lot of very competent people from the industry who have a very good knowledge of the premium market. We are debating and challenging everything. But so far there is no decision that has been taken about the introduction of the Infiniti brand to Japan. But it is being discussed. There are pros, there are cons. Usually, we make thorough business decisions based on the analysis of the pros and the cons. For the moment, all I can tell you is that there is no decision to introduce Infiniti in Japan. The Skyline will continue in Japan.”


TTAC readers know that Infiniti chief de Nysschen is a strong advocate of Infiniti coming home to Japan. In an interview last year in Hong Kong, de Nysschen said :

“Ironically, we take models that are unique Infiniti platforms, developed for Infiniti, and in Japan, we put a Nissan badge on them.”

De Nysschen may be a newcomer to Nissan, but not to Japan. He managed Audi’s business in Japan, and came here in 1999, at the same time as Ghosn arrived in Tokyo. Ghosn immediately wanted to hire de Nysschen, but had to take a rain-check. De Nysschen knows the market, and that it is not easy.

When a reporter asked de Nysschen in Tochigi about Infiniti’s homecoming plans, the questioner found himself instantly castigated:

“So, that means that if you ask Mr. Ghosn a question and he doesn’t answer, you are making another attempt to get an answer out of me?”


Nevertheless, there was an answer, delivered wrapped into de Nysschen’s trademark carefully carved sentences:

To be a global brand, you might well want to compete in the premium sector in your domestic market.

We spend a lot of time talking about Infiniti brand values, and how those are to be communicated, not only in the tone and manner of our marketing and our advertising communication, but also, they need to be expressed and conveyed through the product, through design, through technology, through the engineering.

It seems to me to be very difficult for all the men and women who work on expressing these values in the Infiniti product to then not also see the vehicle and the brand being available in the domestic market.

Also, in term s of the international flavor for the brand, our customers are internationally mobile. And one important cornerstone of premium brands is that wherever you encounter them, they are positioned consistently, they portray the same values and qualities, whether you meet them in New York, or in London, or in Beijing, or indeed in Tokyo.”

After having made a strong philosophical case for estranged Infiniti coming home, de Nysschen sees himself faced with the realities:

“One of the disadvantages of course is cost of entry. It is very expensive to set up a distribution network in Japan. Last time I looked, not too many free open spaces were shouting to come and build an automotive showroom.”


Again, this is coming from a former Audi manager who had busted a cozy (and largely unknown) distribution agreement between Volkswagen and Toyota, and who had talked Ferdinand Piech into setting up an exclusive network in Japan. Eventually, this led to the end of Volkswagen’s Japanese distribution agreement with Toyota. This case should be a required course in the education of carmakers, especially those who feel entitled to major shares of the Japanese market without really trying. Continued de Nysschen:

It is my commitment that Infiniti will achieve profitable growth, and that we will achieve very quickly a positive contribution to the overall operating profit of Nissan. That means that we have to balance the speed with which we want to enter the Japanese market.”

I take that as a carefully wrapped no.

In regards to luvmyv8’s question and with regards to luvmyv8, de Nysschen said that “on the Skyline, I really have no further comments to add other than those already expressed by Mr. Ghosn. I would urge you to be patient for just a little while.”

As this is a question and answer session, let me try to answer  28-cars-later’s inquiry. He said: “Bertel, how do you get such access to Ghosn… is Nissan just *this* friendly to the press?” Instead of a simple and pat “yes,” let’s make a separate story out of that.

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Renault-Nissan: The Giant That Wants To Be Small Mon, 04 Feb 2013 17:07:41 +0000
Looking at Renault’s European sales, one sees red. Looking at Renault’s stock chart, one sees the best valuations in the last two years, and a trend that is going up. What does the market know we don’t?

World’s Largest Automakers
Rank OEM Units 2012
1 Toyota 9,909,440
2 GM 9,288,277
3 Volkswagen 9,070,000
4 Renault-Nissan 8,101,310
5 Hyundai Group 7,120,374

On a global stage of automotive braggadocio, Renault CEO Carlos Ghosn plays the role of a Columbo: Unassuming, a little disheveled at times from hours of arm waving, often comical looking, and, oh, one more thing: The Nissan-Renault Alliance is the world’s fourth largest automaker, bigger than Hyundai, bigger than Ford. It will never show up that way on global rankings, because Carlos Ghosn does not want it that way.

Renault sold 2,550,286 units worldwide in 2012, down 6.3 percent from 2011. Nissan sold 4,940,133 units, up 5.8%. Often forgotten: Russia’s largest carmaker Avtovaz is under control of the Renault-Nissan Alliance. Avtovaz added 610,891 vehicles to the tally. The Russian car market, already at 2.9 million units in 2012, is expected to eclipse Germany as Europe’s largest car market this year and for many years to come. Russia has just started, whereas Western Europe is going into decline. Avtovaz is for Russia what Volkswagen is for Germany, and the Renault-Nissan Alliance owns it.

The offerings of Renault, Nissan, and Avtovaz are more cohesive than those of some other makers that drag around a legacy jumble of platforms and technologies. Scratch on Avtovaz’s Lada cars, and you find Renault’s Dacias, a Nissan Micra or Cube shares the same platform as a Renault Clio or Twingo. The Dacias are not old Ceaucescu era cars, as some may think, but derivatives of a joint B platform by Nissan and Renault. Nevertheless, this highly integrated alliance will continue to report as separate companies. Renault owns more shares in Nissan (44.3 percent) than for instance GM in its Wuling joint venture. 100% of the Wuling sales are counted as GM’s. Renault counts zero percent of Nissan.

The Nissan-Renault Alliance is front and center in the push for low-cost cars, the future battlefield of the global auto business. Nissan is reintroducing its Datsun brand, the Alliance is working on a sub $5,000 car, primarily targeted at emerging markets, but possibly also at first world markets such as Europe that need to prepare for decades of decline.

Oddly, a company that some recklessly regard as one of the most affected could be best positioned in that new high volume low cost race.


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Carlos Ghosn Sees No European Growth For Years. There Will Be Even Less After That Tue, 29 Jan 2013 17:22:46 +0000  

Nissan-Renault CEO Carlos Ghosn said today that he does not expect any sales growth in Europe over the next three to four years. He is not giving up on growth, and said that most will come from higher demand in the United States and China, Reuters reports.

What Ghosn kept to himself is that there probably won’t be much growth in Europe after those three to four years either. Most likely, there will be a monstrous contraction of the market. When with his inner circle, Ghosn often talks about a “structural decline:” This is not a just one of these cyclical phenomenons. It is simple math:  Around 1970, as the pill became popular, births dropped by approximately half from their prior peak in the mid-sixties. This peak now sits smack in the middle of the prime new car buying age, which in most of Europe is between 40 and 60 years. The trailing edge of the peak already makes itself felt with lower sales. At around 2020, this peak will retire, leaving behind a drastically smaller pool of buyers.

European carmakers which at this point are not firmly established in growth markets, will be dead.  If you are just beginning to establish yourself now in growth markets, it will be too late.

We did these studies in the mid-1990s, when the dip which is now heading towards its 70th birthday created a crisis in the European car market. We predicted the crisis would be over soon, there will be a huge boom at around the turn of the Millennium, after 2010 it will get iffy with premium cars (older buyers) still going strong, and after 2020, 2025, we all want to live elsewhere, or be dead.

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Ghosn: Renault May Have To Leave France Fri, 28 Sep 2012 12:33:36 +0000

Renault chief Carlos Ghosn said in a radio interview with RTL that his company could leave France if it is unable to compete at home. Asked if Renault could disappear, Ghosn said: “In its current form, yes.”

Renault will not be able to avoid cutting jobs in France if the market’s decline proves to be deep and lasting, Carlos Ghosn said in another interview during the Paris auto show today.

According to Reuters, Renault has forecast a 13 percent drop in the car market in France and an 8 percent decline in Europe this year.

Due to its wider international footprint and its alliance with Nissan, Renault is in better shape to get alive through this slump, in one form or the other, than its rival PSA.


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Daimler-Renault-Nissan Alliance Gets Results, GM-PSA Doesn’t Fri, 28 Sep 2012 11:24:17 +0000

TTAC readers who followed our past reporting on the developing relationship between Daimler and the Renault/Nissan Alliance will not be surprised in hearing what Carlos Ghosn and Dieter Zetsche told the press today. If you think you’ve heard it all before, you are right. You did here.

According to Reuters,

On the other side of Paris, the alliance between GM and PSA Peugeot-Citroen is said to be going nowhere. According to Bloomberg, a lowly joint parts-buying plan is delayed, allegedly because it is waiting for regulatory approval. The agreement, and possibly the announcement of joint production of cars, are now expected by the end of October, when all good news about GM are due to be announced.

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Ghosn Sees European Market Fall Further, But “Zero Chance” For Bailout Thu, 27 Sep 2012 15:56:30 +0000

European auto sales likely will fall 8 percent this year, Renault/Nissan CEO Carlos Ghosn told Reuters today in Paris. Should some industry leaders be hoping for government help, then Ghosn has bad news for them. There is “zero chance” for a government-led restructuring of Europe’s auto industry. ” Every company is going to have to deal with its own problems,” Ghosn said.

On the Nissan side, the tensions between China and Japan are “bad news in the short term” for Nissan’s sales in China, said Ghosn. “We’re watching carefully the situation, and we’re adjusting our production.”

TTAC was not invited to go to Paris, but we bribed a security guard at Renault to take some candid iPhone shots.

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Renault “Not Dying, Unlike Some Others On The Ward” Fri, 27 Jul 2012 16:43:09 +0000


If you look at half year sales in Europe, then you see Renault as the worst performer of the volume makers. With EU sales down 17.09 percent, the Renault Group took a bigger hit than European patients Opel (- 15 percent) and PSA (-13.9 percent). Even troubled Fiat was doing better than Renault, by a hair (-17.08 percent for Fiat.) Whereas the percentages carry the smell of death, Renault’s half year results smell downright rosy.

The Renault Group reported a half year group profit of €1.02 billion ($1.26 b) before tax, and €786 million after tax. While this is nowhere near the X-rated  profits of Volkswagen, or those of Daimler, a billion euro is a billion euro, and it is a miracle when your home market collapses.

Why the difference? Renault appears the best managed carmaker in trouble.  Sure, most of the profit (€630 million) comes from Renault’s shares in other companies, notably Nissan. As Volkswagen and Daimler will confirm, global diversification is a good hedge against regional calamities. Sure, a big chunk of the money (€395 million) comes from sales financing. A well run bank that does not dabble in mortgages or currency gambles is beneficial to a carmaker’s bottom line. Still, Renault has eked out €87 million from making and selling cars, which is, it bears repeating, a miracle.

Astounded analysts expected Renault’s auto manufacturing business to report a loss. “The patient is not well, but not dying either, unlike some others on the ward,” Bernstein analyst Max Warburton told Reuters.

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Her Master’s Voice: Carlos Ghosn’s Japanese Alter Ego Thu, 26 Jul 2012 16:06:41 +0000

“I am following him everywhere, except into the rest room.” For nearly twelve years, interpreter Yuki Morimoto has been Nissan CEO Carlos Ghosn’s adapter to the Japanese world. The lady is a miracle. She simultaneously translates Ghosn’s high-speed stream of wit and Gallic sarcasm into Japanese, and translates Japanese back into perfect English. Morimoto is so in tune with Ghosn that she sometimes finishes his sentences before him – in Japanese.

Morimoto-san is proud of conveying precisely how her boss feels. She does not pretty up what people say, she translates it as it comes.

In a land where the waving of arms makes you suspect of suffering from epilepsy, Morimoto has adopted Ghosn’s trademark body language that underscores words with gesticulations. She transposes Ghosn’s undulating emotions into wave after wave of likewise emotional Japanese, and when the boss gets loud, Morimoto is known to crank up her voice.

If Ghosn is displeased with you in Yokohama, you will hear it. If you don’t speak English, you will hear it again from Morimoto. Amongst the executive crew at Nissan’s headquarter in Yokohama, the saying goes that “when the CEO yells at you, you get yelled at twice.”

For more than a year, I had been bugging the troops and generals in Yokohama to let me do a story about Morimoto, who I had been surreptitiously recording anyway. When I suggested it, a lot of sucking air through the teeth ensued, I was told that it would be, you know, muzukashii, or difficult, because she’s shy in real life, and, sumimasen, the CEO’s personal translator, wakarimasu ka? I kept suggesting it, they kept sucking air.

Today, to my thorough dismay, I find this seven minute feature-length movie about the (shy my eye) translator on YouTube. Produced by Nissan’s global newsroom, it confirmed my worst fears: Those guys are here to put us all out of business. After more than a year of tut-tutting and sucking air, they wait until I’m out of the country, and steal my idea. Wait until I’m back in Tokyo, Dan Sloan.

Dan hasn’t put us out of business just yet.

In the week since the Morimoto video was up on YouTube, it attracted a shocking 419 views. If you see more than 419, then these are all ours, adding clicks to injury.

The non-amount of clicks stands in no relationship to the importance of the lady, and, dare I say it, the production value of the video. We really need to talk, Dan Sloan.

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Quotations From Chairman Carlos Ghosn Sat, 12 May 2012 15:59:52 +0000

Ford wanted to hire Carlos Ghosn instead of Mulally. Ghosn said no. Kerkorian wanted Ghosn to save GM, Wagoner prevented it. For you, dear TTAC reader, Carlos Ghosn is available.

Chief of Nissan and Renault, Ghosn is the ultimate rock star of the industry. He is the master of the unprepared remark. Any of his statements, delivered with French-Brazilian-Lebanese flair and his trademark gesticulations, is more profound than thousands of PowerPoints delivered by overpaid management consultants. Today, absolutely free of charge, Carlos Ghosn lets us in on the secrets of running a successful car company.

Carlos Ghosn on strategy

“You need a good strategy. If you don’t have a good strategy, no matter how much scale you have, you will achieve nothing. After the good strategy you need to have a good management team. We are people, we make decisions all the time, and if you make the wrong decisions, no matter how big your scale is, you are not going in the right direction. Once you have a good strategy and a good team, then the difference is made by scale.”

Carlos Ghosn on scale

“The car business is a business of scale. An 8 million car company will be doing much better than a 3 million car company. Some companies have scale by themselves, some don’t. Is it impossible for those to get scale? No. Alliances are a very good way. Small or medium-sized companies join forces, and all of a sudden, they benefit from scale.”

Carlos Ghosn on what a car company needs

“In our business you need a vision, then you need a strategy, then you need a budget, and then you need results. You can’t have a vision that is different from the strategy, and a strategy that is different from the budget, and a budget that is completely different from the results.”

Carlos Ghosn on the economy

“Let’s not forget, this year will be another record year for the industry. Even though the European market is struggling, even though the growth in the U.S. is not at the level that everybody is expecting, compared to 2011, our forecast is that there will be 3 to 4 million additional cars produced and sold on the planet in 2012. Obviously, the growth will not be balanced. There will be strong growth in China, there will be strong growth in the new emerging markets, you will have growth in the U.S. no matter what, Japan is also going to see a growing market. Europe will be decreasing, but overall, it will be a good year for the industry, particularly if you are well positioned to contribute to the growth where it is taking place.”

Carlos Ghosn on emerging markets

“The companies that had the most resilience in the crisis that started in 2008 are the companies with a heavy presence in the emerging markets.  Companies that are mainly focused on Europe, or mainly on the U.S., they struggle more than companies that are in China, in Russia, in India, in Brazil. Those BRICs are not emerging markets anymore. They are emerged markets. They are some of the biggest markets in the world already. The new emerging markets are Indonesia, Vietnam, some countries in Africa, some countries in the Middle East. This is where you need to be positioned, if you have a car company. Not being there is the biggest risk.”

Carlos Ghosn on politics

“We are in the car business. We are not in politics. Countries have their rules, and if you want to do business in a country, you need to abide by its rules. If you don’t like the rules – easy. Don’t do business there.”

(The  last statement was made during a Q&A session at the Beijing Auto Show. A reporter wanted a statement about China’s policies. When I came back to the hotel, the audio file was wiped off the recorder. Instead of suspecting foul play, I blame my own stupidity. The statement remains permanently recorded in my head – in a paraphrased way.)

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Nissan Largest Japanese Carmaker. In Profits Fri, 11 May 2012 18:53:06 +0000

Nissan pulled off an even bigger miracle than Toyota and ended a (this time truly) catastrophic year with a big profit. Today in Yokohama, Nissan CEO Carlos Ghosn announced that Nissan delivered a pre-tax profit of 535.1 billion yen (US $6.76 billion) for the fiscal year that ended on March 31, “despite natural disasters and currency exchange headwinds.”

Japan’s second largest car company produced the largest profit, exceeding that of Toyota, which had announced a 432.9 billion yen ($5.4 billion) profit before taxes on Wednesday. At the end of last year it was already evident that Nissan had survived that truly catastrophic year best. Today, that fact was confirmed by a beauty of a balance sheet.

When asked what risks are in front of Nissan, Ghosn answered: “The biggest risk is the strength of the yen.” Ghosn is the designated hitter of the Japanese auto industry when it comes to the Yen. He can say what Japanese colleagues would love, but don’t dare to say.

At each quarterly results conference, a reporter of the Nikkei needles Toyota with the question when the company would finally produce a profit at its factories in Japan, instead of offsetting homemade losses with foreign gains. Toyota usually gives a polite non-answer.

Ghosn doesn’t even wait for that question. Unasked and blunt, he says:

“We have healthy profits this year, but all the profits come from international operations. When you take a look to the non-consolidated results in Japan, they are negative. The reason they are negative is because of the strength of the yen. We are protecting ourselves by using as much international capacity as possible and by holding the exports from Japan to the minimum level.”

Just about every car that is exported from Japan is exported at a loss. Instead of paying taxes on income at home, Japanese carmakers pay the price for the abnormally strong yen, Nevertheless, Nissan expects for the new fiscal a pre-tax profit for 680 billion yen ($8.5 billion) on sales of 5.5 million units for Nissan only.

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Nissan’s Ghosn Worried About Power. The Power Of The Yen Mon, 07 May 2012 12:08:29 +0000

With the closure of Japan’s last operating nuclear power plant hitting the news over the weekend,  people asked me what that means for Japan’s auto industry. My answer: Nothing.  The shutdown of the first nukes on March 11 a year ago was much more dangerous than the long scheduled downing of the last. Nissan’s Carlos Ghosn sees a much bigger danger: the power of the yen. The high yen at the currency exchange. And higher yen numbers on the electricity bill.

The sudden loss of electricity generating capacity following the March 11 earthquake and tsunami last year was a shock. Japan and its auto industry rode it out without a blackout.

The work-week was rearranged to smooth out demand. Carmakers built private power plants. Rigorous saving regimes were enacted. When financial results for fiscal 2011 will be announced this week, top brass of Japan’s automakers will leave their ties at home. Signified by open collars, a new “Super Cool Biz” season starts, with thermostats turned to barely bearable, and with hallways dimmer than a Kabukicho cocktail bar.

One year after the quake, Japan’s luckless TEPCO utility is looking at a power surplus. It has added new gas turbine facilities and is increasing capacity by bringing closed thermal plants back online. In the Osaka area, served by Kansai Electric, outages are more likely than in TEPCO’s service area.

In general,  Japan’s automakers are far less concerned of running out of power than a year ago. They are much more worried about the extra cost of power. Nissan CEO Carlos Ghosn writes today in a blog in The Nikkei [sub]:

Tokyo Electric Power (TEPCO), operator of Fukushima Daiichi and the largest energy supplier in Japan, began on April 1 to raise electricity rates for industrial and other large contract customers by an average 17%, the first such hike in three decades, which it attributed to some 830 billion yen in additional fuel costs.

Let me raise some figures. At Nissan, electricity accounts for about 10,000 yen of each car’s assembly cost. This increase will mean an additional 2,000 to 3,500 yen in additional production expense at some factories, which does not include the impact on our parts suppliers.”

2,000 to 3,500 yen per car are about $25 to $44 per unit. This may not sound like a big number, but with razor-thin margins, every yen counts. Ghosn and his Japanese colleagues are more concerned about the power of the runaway yen. After a short respite in March, the dollar has fallen below the 80 yen mark, and the trend points to a further strengthening.

While Ford’s Steve Biegun counts on an ignorant audience when he claims that the Japanese government keeps the yen low, just the opposite happens. A powerless government watches a rising yen destroy the remainder of Japan’s export machine.

Says Carlos Ghosn:

“I have been consistent in my call for urgent action to normalize the value of the Yen. The challenge now faced by industry over the stability and pricing of energy must be taken as seriously.”

Maybe Ghosn and the Japanese government should ask Ford how to manipulate the yen. Ford seems to be the only one who claims to know how it’s done.

Carlos Ghosn 2012 Beijing Auto Show - 01. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 02. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 03. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 04. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 05. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 07. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 08. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 09. Picture courtesy Bertel Schmitt Carlos Ghosn 2012 Beijing Auto Show - 10. Picture courtesy Bertel Schmitt Zemanta Related Posts Thumbnail ]]> 13
Ghosn’s Two Front China Offensive Fri, 13 Apr 2012 17:34:17 +0000 The Nikkei [sub] must have been having intimate chats with sources high up in Nissan’s tower at the Yokohama waterfront again.

Prematurely perturbing press people at Nissan, the Tokyo wire reports that a new factory will be constructed in China, and that Infiniti cars will be built at yet another factory in China. In the meantime, Reuters cultivated sources at Renault and says that Renault will finally finalize a deal to produce cars in China.

According to The Nikkei [sub], Nissan will build its long-rumored plant in China’s port city of Dalian. It will be Nissan’s fourth Chinese plant in a joint venture with Dongfeng.

Also according to The Nikkei [sub], Nissan will begin the long-rumored production of  Infinitis in China. It will not make them in Dalian as the rumor went, but at the current Xiangyang plant in Hubei Province. Says the Nikkei:

“The Xiangyang plant produces the Teana mainstay midsize sedan. The Infinitis it makes will be similar in size to the Teana, enabling capital investment to be held down.”

Reuters meanwhile heard in Paris that Renault and Dongfeng have finalized a framework agreement on their long-rumored joint venture. This deal has been long in the works, but changing Chinese rules that are less welcoming to investments by foreign automakers added extra urgency. “We just made the window,” Reuter’s source said. Currently, Renaults are only imported to China. Says Reuters:

“Renault’s 80 Chinese sales outlets sold just over 24,000 imported vehicles last year, the bulk of them Korean-made Koleos SUVs.”

All of this is highly unofficial, but likewise highly likely. Renault’s and Nissan’s double-CEO Carlos Ghosn will come to Beijing for the auto show  on April 23. Full court press events are planned, and Ghosn will have lots to talk about.

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New York 2012: Mr. Eight Percent Wed, 04 Apr 2012 20:12:00 +0000 A year ago, Carlos Ghosn announced that Nissan is aiming for 8 percent global market share by 2016. This morning in New York, delivering the keynote address at the New York Auto Show, Ghosn said it again:

 “We can achieve 8 percent global market share by 2016.”

After a pause, he continued: “Whenever I state this 8 percent goal, I get some skeptical looks.”

Whenever he says that, people do get that look. Then they answer, or think: “Nissan? You surely must be talking about Nissan and Renault, right?”

Wrong. He meant Nissan a year ago, and he was talking only about Nissan today. Nissan is well on its way. Currently Nissan is at 4.8 million vehicles worldwide, or 6.4 percent of the total global market. Ghosn plans to sell 200,000 units more in the U.S. alone with 5 new volume models.

Nissan will ”target  millions of people joining the middle classes around the world” by reviving Datsun for low cost cars.

“And before you ask – no, we do not currently plan to bring Datsun back to the U.S.”

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Ghosn: Beware Of A Drop In Europe Tue, 24 Jan 2012 13:39:46 +0000

Renault and Nissan chief Carlos Ghosn continues to prepare the battlefield of world opinion for a drop in Europe. According to Ghosn, Automobile sales in Europe could decline two to three percent. For Renault’s home market, he expects a drop of five to six percent, Ghosn said in an interview with France Inter radio:

“It’s going to be tough for everyone, not just for Renault. What really worries us is France, as we’re very sensitive to the French market.”

For 2011, Renault reported a 5.7 percent drop in sales in Europe, which was offset by a 19 percent gain elsewhere. Renault’s global sales rose 3.6 percent to a record 2.7 million units.

A soft Europe may be tough for everyone, but for some in particular. Opel and Fiat come to mind. Opel is for all intents and purposes limited to the European market, and will take the full brunt of a drop in sales. Fiat is heavy in Europe, and especially heavy in southern Europe, which goes through serious problems. Volkswagen, BMW, Daimler are exposed, but can more than make it up with exports to and sales in foreign markets. A soft Euro converts into high profits at home.



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The Exodus From Japan Begins In Earnest Sun, 04 Dec 2011 19:36:02 +0000 It looks like Carlos Ghosn is tired of talking about the inaction of the Japanese government with regards to the killer yen. He told his people to start packing. The Nikkei [sub] reports today that Nissan will stop making in Japan newly developed cars for export from Japan.  New cars will be produced at overseas plants.

“Under current foreign exchange rates, there can be no shipments from Japan of totally new projects,” Nissan’s COO Toshiyuki Shiga said. According to the report, anything with a new chassis that is intended for foreign markets will begin its life in those foreign markets. Says The Nikkei:

“Shiga’s comments suggest that there are few benefits to producing entirely new models for export in Japan because of the yen’s surge, but new models that use the chassis of existing vehicles can be exported as they are relatively less expensive to produce.”

Nissan makes only 25 percent of its worldwide volume in Japan. However, half of the Japanese production is currently exported. This will change.

In the interview, Shiga indicated that exports from Japan could fall to 400,000 units. At the same time, the Japanese market (which pays in yen) is supposed to absorb 600,000 units, so that the target of 1 million units can be maintained. In the fiscal year that ended in March 2011, Nissan’s Japanese production was 1.07 million units, of which 610,000 were exported and 460,000 were sold in Japan.

In early November, Toyota had announced a similar plan to maintain its commitment to make 3 million cars in Japan: Fewer cars exported means that Japanese will have to buy more cars domestically.

If the domestic sales don’t pan out as planned, both carmakers can say: “Sorry, we tried.”

Nissan’s plan sounds more decisive than Toyota’s.  Usually, cars are developed and made at home first before they slowly filter abroad.  Starting newly developed cars offshore inevitably will mean that R&D has to follow. Development and production must go hand in hand in close vicinity, at least in the early stages of the cycle.

Japan’s innovative power will be dismantled and shipped abroad. And that is a much bigger loss than a few cars. Japan will slowly turn into a 3rd world country. It used to be that those got the older cars, while new models hatched at home.

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Ghosn To Japan: Do Like Switzerland, Or Become Like Switzerland Sat, 03 Dec 2011 17:09:05 +0000

For quite some time, Carlos Ghosn had been the booh-leader against the strong Japanese yen. At the sidelines of the Tokyo Motor Show, he launched into his so far strongest worded tirade against the “abnormal” yen. He told the Japanese government to learn from the Swiss, and to basically peg the yen to another currency.

Currently, about half of the Japanese auto production is exported. At a loss or at the very least at no profit. No sane business person will invest into a country with no return, says Ghosn. Investments and jobs will go elsewhere:

“The main problem we are facing today is the uncompetitive value of the yen. The yen is not so much a problem for the Japanese carmakers. The yen is a problem for Japan. Japanese makers are moving production little by little outside of Japan.  The car industry employs between four and five million people in Japan, and more than half of the industry works for export. If the car industry goes, a substantial part of employment is going to go with it.”

What the strong yen does is strengthen the industries  of Thailand, China, Mexico, or other emerging export bases. Ghosn had said this for quite some time. The answer was that the Japanese government is helpless, that no amount of quantitative easing seems to be able to stem the strengthening of the yen. This time, Ghosn says what should be done:

“People say there is no solution.  Wrong! Wrong! Look what the Swiss have done. Switzerland is a great benchmark of how a small country has drawn a line in the sand. They said: Enough is enough, we will not allow the Swiss Franc to rise above a certain level against the Euro. Everybody laughed, but they stuck with it. What we are encouraging is that the government of Japan takes the same stance. If Japan draws a line in the sand, the market will listen.”

If the Japanese government will not listen to the plight of its carmakers, carmakers won’t suffer, Japan will:

“Japanese car makers will survive this. They already are global. What we are saying is this: If there is nothing that is done, don’t blame us for the consequences.”

In other words: Follow the example of Switzerland, which had a similar problem with its rising currency, until it was effectively pegged against the Euro. Or watch the Japanese industry collapse to  Swiss size.

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Quote Of The Day: Car Makers Are Huge Users Of Cash Fri, 18 Nov 2011 15:46:09 +0000

“Car makers are huge users of cash – we use cash because we are big employers, big investors and because we have huge supply chain systems. So the working capital is necessary to make the company work. And if all of a sudden the banks stop lending or are frozen, you have a serious problem. A very serious, immediate problem.”

Nissan/Renault CEO Carlos Ghosn at the Japan Society, New York City, November 17, 2011

This is a quote which every carmaker, especially the budding ones, should frame and hang on the wall in a spot where it is seen daily.  If you want to invest in a new car company, or buy an old car company because it is very cheap, you should write this sentence down by hand 100 times.

Repeat if you still feel the itch.

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Nissan And Toyota: Sayonara Japan, We’re Going To America Fri, 18 Nov 2011 12:42:46 +0000

Both Akio Toyoda and Carlos Ghosn are in the U.S. and what are they doing here? They complain loudly about the high yen.  Akio Toyoda uses an interesting reasoning. It may make Americans wish for an even higher yen. Toyota may shift a “significant” amount of production to the U.S., if the yen stays high, and if demand in Japan will fail to consume Toyota’s vast capacity there. If the majority of Toyota’s output is shipped overseas, then factories will follow.

“If demand in Japan recovers, we will continue and work to maintain production of 3 million units” in Japan, Akio Toyoda said to Bloomberg. “If most of it becomes exports, shifting a significant amount of production to the U.S. may be considered.”

“If the yen continues to stay strong, Toyota will collapse,” Toyoda said at an opening event for a factory in Blue Springs, Mississippi. He reiterated comments he had made recently at a JAMA press conference in Tokyo, where Toyoda said that Japan’s automobile industry may no just hollow out, but “collapse” unless the yen goes back to more palatable levels. Toyoda usually is not prone to grandiose rhetoric, and when he says „collapse“, then he means it.

At the same time, Nissan & Renault co-CEO Carlos Ghosn said yesterday at the sidelines of an event of the Japan Society in New York City: “What’s taking place now is many projects are now basing their manufacturing outside of Japan because they just cannot survive with this 77 yen to the dollar.” Says The Nikkei [sub]:

“Ghosn called the rate of 77 yen per dollar “unbearable” and said many Japanese companies are shifting their operations overseas because they do not see any clear prospects for an end to their predicament. Ghosn criticized the government for lacking effective measures to fight the yen’s record appreciation at “the worst time for the Japanese economy,” citing the March 11 earthquake and severe floods in Thailand.”

Since 2007, the dollar has fallen more than 35 percent against the yen, a currency which some dimwits who had not updated their dog-eared talking points, steadfastly call overpriced and manipulated by the Japanese government.

Listening to Ghosn’s comments, people may remember that he had mentioned building a new entry-premium Infiniti using a Mercedes platform – somewhere. It could be Europe, China, the U.S. or elsewhere (maybe Mexico), but definitely not Japan. Additionally, Financial Times Germany floated rumors of a joint Daimler/Nissan engine plant in the U.S.  Infiniti will buy two diesel and one V6-gasoline engine from Daimler, beginning in 2013, but Daimler’s European capacities are tapped out.

Bottom line: The high yen will most likely not help the Detroit 3 as much as it will create jobs on U.S. soil. And that’s where a high yen comes in handy: A yen that buys 35 percent more in dollars makes such an investment 35 percent cheaper.

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From Akerson To Ghosn, The Mood Of Industry Leaders Darkens Tue, 18 Oct 2011 18:34:52 +0000

Industry leaders, usually known for their unfatiguing optimism, are more and more taking a cautious stance. GM’s CEO Dan Akerson predicts flat industrywide U.S. auto sales in 2012, while his colleague Carlos Ghosn, chief of Renault and Nissan, has feelings of “very great uncertainty” when he looks toward 2012.

In an interview with Automotive News [sub], Akerson said GM predicts “flattish” U.S. light-vehicle sales for next year. And that only if Europe’s debt crisis is not contagious and won’t affect the U.S. economy. Akerson sees the EU crisis as the biggest threat to auto sales and to the global economy.

For 2011, GM predicts U.S. light-vehicle sales will finish at around 12.7 million or 12.8 million, and for 2012, there won’t be much more: “As we go into ’12, we’re looking for kind of a repeat of ’11,” Akerson said. The pent-up demand will have to remain pent-up for a while.

Meanwhile in France, Carlos Ghosn said that “for 2012, we are all currently in a state of very great uncertainty for the time being.” Ghosn also fingered the debt crisis as a threat. Ghosn told Reuters that there “could be some grounds for optimism in 2012 if Europe managed to solve its sovereign debt crisis.” However, he does not see that happening anytime soon, because countries are not in agreement on the measures needed.

This time around, it also does not look like China will bail out the auto industry, as it happened in 2009 and 2010. At the Global Automotive Forum in Chengdu last week, none of the captains of the Chinese car industry doubted China’s long-term potential. But all were in agreement that next year, the industry won’t see much growth.

In Japan? Don’t ask.



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Ghosn To Announce Big Plans For Brazil Any Minute Wed, 05 Oct 2011 14:12:40 +0000

In a press conference that is about to begin in a few minutes in Curitiba, Brazil, (see picture above), Nissan’s CEO Carlos Ghosn is expected to announce the expansion of an existing Renault plant, and the building of a new Nissan factory. And possibly even bigger news.

If reporters ask the right questions, Ghosn may voice the opinion that global auto sales will again reach record levels in 2011 and 2012. He will say that the growth will come from the usual suspects, Brazil, Russia, India and China. He may say that other countries in Latin America and the Middle East are growing nicely.

The problem are the developed markets, Ghosn will most likely say. Ghosn does not expect a recession for the United States, but also not much growth. For Japan, he will predict lower sales.

For Europe, he might repeat his latest zinger, namely that “Renault-Nissan wasn’t very optimistic about Europe’s growth prospects even before the recent debt crisis.”

We have our spy in the audience, and he’ll hopefully won’t forget to let us know what Carlos Ghosn really said.

No arm waving pictures. That’s no big deal in Brazil.

Update: The Renault plant will be expanded from  currently 250,000 units/year  to 380,000 vehicles.1,000 jobs will be added. Renault wants to introduce 13 new cars in Brazil before 2016. The Nissan factory announcement is expected for today.

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Ghosn On Crusade Against Japanese Yen Wed, 28 Sep 2011 10:57:45 +0000

If anyone again mentions that the Japanese manipulate their currency to get an unfair advantage in international markets, then I will strangle him.  Or make him pay my Tokyo restaurant, taxi, and even subway bills in converted dollars. Strangling would be the more humane punishment.

Nissan CEO Carlos Ghosn has an even more painful option in store: He’ll leave the island. “If the Japanese government wants to really safeguard and develop employment, then something has to be done,” Ghosn told Reuters editors Paul Ingrassia and Kevin Krolicki in an interview in New York.

Ghosn is on a worldwide crusade against the “abnormal” yen. Last week in Kyushu, Ghosn announced a rethinking of Nissan’s production presence in Japan if the yen hasn’t returned to an (unspecified) normalcy six months from now. A week later in New York, Ghosn said:

“We have been talking about this as an industry for a while. Unfortunately, it keeps happening. It looks like whatever effort has been done so far has not delivered results.”

“We have to make investment decisions all the time. This is one of the factors that we have to consider when we look at a project and say are we going to do it in Japan or are we going to do it in another country?”

The yen doesn’t seem to listen. A dollar buys you 76 yen, and 76 yen will buy you next to nothing in Japan. Attempts to bring down the yen have failed.

Investment decisions are made on a long-term basis. It appears as if the decisions have already been made at Nissan, and Ghosn is simply softening the blow that is soon to come.

Already, Nissan and other Japanese manufacturers are growing their capacity abroad with no expansion at home. Percentage-wise, the Japanese capacity shrinks. Nissan had made commitments to keep Japanese production at 1 million units. Toyota had committed to 3 million units. Even that is no longer sacred. Both have made noises that either the yen drops or their Japanese production will. At some point, moving production abroad will also mean that engineering follows. Engineering without attendant production is like surgery without a body.



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Nissan Will Build A Chinese EV Tue, 26 Jul 2011 11:32:20 +0000

At a press conference in Beijing’s tallest building, Nissan’s CEO Carlos Ghosn announced today that the Nissan-Dongfeng joint venture will build an EV in China, and that it will be ready by 2015. No, it will not be the Nissan Leaf. It will be a plug-in that will sail under Nissan-Dongfeng’s “Chinese” brand, Venucia. Said Ghosn:

“We see a clear need for cars that are affordable, practical, spacious and zero emission. Nissan is clearly the global leader in zero emission mobility, now with more than 10,100 electric Nissan Leaf vehicles already sold worldwide.”

“We are fully prepared to follow the Chinese government direction to promote the adoption of zero emisssion vehicles. We are ready to produce electric cars locally in China under the Venucia brand.”

Venucia will release its first car in 2012. The EV that will follow in 2015 will officially be an indigenous Chinese product. There have been many rumors about the (not yet announced) Chinese EV subsidy policy. Will imports qualify? Is it ok if the car is made in China? Does the car have to be “Chinese?”

The decision to build a “Chinese” EV instead of simply manufacturing a Leaf in China is indicative of what the rules will be when they are finally handed down:

It must be “Chinese.” It’s o.k. if it is Chinese by name, and if the technology comes from Japan or Europe. There will most certainly be a lot of parts under the hood of that Venucia EV that look very familiar to a Leaf owner. However, if it is “Chinese,” then the IP of the car (not necessarily that of the components) will be owned by the joint venture instead of being licensed from the foreign joint venture partner.

Dongfeng is owned by China’s central government. Or as Ghosn said, the company has “solid relationships with China’s central and local governments.”

Dongfeng should know by now what the rules will be when they have been announced. A lot of people will not like those rules.   While U.S. Senators are rattling sabers, Ghosn cuts deals with what could possibly the world’s largest market for electric vehicles.

Make cars, not war.

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Battle Of The Batteries: Toyota And Nissan Power Houses With Cars Thu, 30 Jun 2011 15:49:00 +0000

„When will it discharge?“ asked a reporter on Monday at Nissan. I ducked under my desk. “In one or two years,” answered Nissan CEO Carlos Ghosn. I broke cover when I realized that they were talking about the Leaf powering the house.

Running your house from your car battery suddenly is all the rage in Japan. Why would you do that?  It doesn’t need another tsunami for Japanese to worry about electricity. What’s the hottest Android app in Nippon? “TEPCO usage!” It shows us how much power we consume. Yesterday (green line,) we were at 93 percent, perilously close to overload.

“And it’s not even July yet,” said Paul Nolasco of Toyota, who today met a perspiring me at the Nagoya Shinkansen station. We were on our way to Toyota City, to witness the discharge of a Toyota Prius into a house.

As it turned out, the house is ready, but the car is not. The plug-in hybrid Prius won’t be commercially available before 2012. By that time, Toyota also wants to have figured out how to discharge the juice in the Prius back into the house.

But boy do they have the house! And a few hundred more on the way. Prefabbed by Toyota Housing Corporation, the house comes with networked electrical appliances, solar panels, a 5 kwh household storage battery, and assorted gadgetry. Of course, there is a charging pod with a CHAdeMO compliant plug.

Inside are many screens that allow the owners of the house to monitor electric consumption if watching today’s episode of “Kiri ni sumu akuma” (“Devil in the fog”) should not be gripping enough.

We didn’t need Japanese soap operas for suspense. When the national and international press (the latter represented by Ran Kim of Reuters and this reporter) descended on the smart home made by Toyota, a Mitsubishi i-MiEV was found parked side-by-side with the Prius plug-in hybrid prototype.

The intruder was promptly removed.

Then, the PHV Prius was ready to Meet The Press.

This is the load center of the house. The main breaker says 75A. Very miserly

The 30A breaker in the middle is for the solar system. The 20A breaker is for the EV charger pod. The unconnected 20A breaker? Further expansion.  Note the thin wires for monitoring. The coils around the two hot legs of the 30A breaker allow for amperage measurement.  The EV charger pod has its own communication capabilities.

This is the 5 kwh storage battery of the house, as introduced by Yamaguchi Kazuhiko,  chief of Toyota’s Smart Grid Group..

The batteries next to the house and in the car can be used for when the sun doesn’t shine, or, in a high demand situation, for load leveling. When others in Japan stare at the afternoon peak with trepidation, the house can go off-grid and run from the batteries for a few hours. Should all admonitions to save power remain unheeded and the dreaded rolling blackouts come along, the batteries will keep the lights on.

But what if a disaster strikes again? On Monday, Carlos Ghosn said that the battery of a Leaf would be able to power a Japanese house for two days, the power-oinker of an American house will survive on a Leaf alone “for one day only.”

After he was done addressing reporters, I asked Hiroshi Okajima, Project General Manager of Toyota how long a Japanese house could function, powered by a plug-in hybrid Prius alone. He pulled out pen and envelope, and said after some quick calculation: “With a full tank of gas, 10 days.”

Let’s hope that huge disaster won’t strike before the discharge-ready Prius is available. Smaller disasters should wait at least for the availability of the discharge-ready Leaf.



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Nissan Predicts A Miracle Thu, 23 Jun 2011 10:10:08 +0000

Carlos Ghosn had reason to be beaming and relaxed last night in Tokyo. Last night, he said “Well, we are going to show you the numbers tomorrow, and they will be significantly higher than in 2010.” Today, Ghosn did not disappoint.

Nissan announced its forecast for the Fiscal Year 2011, which goes from April 1 2011 through March 31 2012. Nissan clearly expects a year that beats all records in the history of the company. Based on foreign exchange rate assumptions of 80 yen to the dollar and 115.0 yen to the euro, Nissan filed the following forecasts with the Tokyo Stock Exchange:

  • Net revenues of 9.4 trillion yen (US $117.5 billion, euro 81.74 billion). Last year ended with 8.8 trillion yen.
  • Operating profit of 460 billion yen (US $5.75 billion, euro 4 billion) . Last year ended with 537.5 billion yen.
  • Ordinary profit of 441 billion yen (US $5.51 billion, euro 3.83 billion). Last year ended with 537.8 billion yen.
  • Net income of 270 billion yen (US $3.38 billion, euro 2.35 billion). Last year ended with 319.2 billion yen.

Nissan expects global sales for fiscal year 2011 to rise to 4.6 million units, an increase of 9.9 percent. Nissan anticipates a return to full unrestricted production in October.

All of these are forecasts, but they are usually made with great care. Deviate too much from your forecasts and your stock will get hammered. Of the big Japanese automakers, this is by far the best forecast. Considering that large parts of Japan and its industry had been devastated, it is the forecast of a miracle.

How will that miracle be performed? On Monday, Nissan will present its short and long-term strategy.

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