NEW YORK – As CEO of Nissan, Renault, and the Nissan-Renault Alliance, Carlos Ghosn counts the European market as his biggest problem. Earlier this month, Renault and its French union approved a plan to cut hourly workers and make the company more sustainable while gaining market share with new models. The U.S. market is one of Ghosn’s bright spots globally, but he says that Nissan still needs to gain market share here.
“Unless we have 10 percent market share in the U.S., we’re not getting a fair return on investment,” he told a group of reporters at the New York International Auto Show. Nissan and Infiniti currently have an 8 percent share of the new-car market in the U.S., so “we have 2 percent to go.” Any increase must be sustainable, Ghosn warns, which means the company needs discipline when it comes to incentives and fleet sales. Nissan’s midsize Altima outsold the Honda Accord for several months after the 2011 Japanese earthquake/tsunami depleted supplies of the second-bestselling midsize in America. Both the Altima and the Accord were replaced with new models last year, but the Honda regained its sales lead and has not given up any ground to Nissan.
The Altima’s fleet take is about 21 percent, compared with an industry average of 32 percent, and it’s selling at a more profitable mix according to Andy Palmer, Nissan’s vice president of product planning. That does nothing for U.S. market share, however. Palmer says the next Titan, which Nissan will build alone, will take a larger share of the 1.7-million-unit market for full-size pickup trucks.
“We’re coming with a very strong product,” Ghosn adds. “I consider it an opportunity.”
Ghosn says Renault will naturally expand market share in France with its Captur crossover launched at the Geneva motor show late last month. The Captur is Renault’s first CUV, Ghosn says, which means anything over 0 percent of the segment constitutes an increase. Renault also has a new Espace minivan in the works: it replaces a very dated model and converges with other minivans in the alliance to greatly increase platform volume.
Ghosn says that under Renault’s reorganization, the company will cut 7500 hourly employees by 2016, increase the work week to 35 hours (some employees work far fewer hours, he adds), have increased flexibility to move employees from one plant to another, institute a management training program, and moderate salaries. In exchange, Renault vows not to shut any plants. In addition to finding more market share with new models, Renault will use the plant to build cars for partners, which Ghosn would not identify.
“We are planning for three years of no growth in Europe. Nothing in 2014, 2015, 2016. We hope we are wrong. This is not my forecast, because I think growth can come before” 2017, he says.
Ghosn emphasizes the need for “local” production. Nissan relaunches the Datsun name next year in India, Russia, and Indonesia using a platform being developed in India. “We want to be the leading Japanese brand in emerging markets,” he says. Nissan already is at 10 percent in China, making it the strongest Japanese brand there, Ghosn says.
“If you start to go with the same price point for each brand, it could be very dangerous,” he says, explaining the Datsun name for the three emerging countries.
Ghosn continues to be bullish on electrified cars, believing they will account for 20 percent of the market by 2020. Nissan has a new alliance with Daimler and Ford Motor Company on fuel-cell development and expects U.S. sales of the electric Leaf will reach 1900 for March, which would be a record. Nissan/Infiniti is expecting better-than-average monthly sales overall, at roughly 132,000 units, or 8.8-8.9 percent market share, says Jose Munoz, senior vice president of sales and marketing for North America.
Local Leaf production is making it possible to meet demand. Meanwhile, government incentives are necessary until Nissan and its rivals can bring electric-car production costs to the same level as internal-combustion-engine cars, Ghosn says. Japan, for example, buys 400 million barrels of oil per day, he says, all imports. Spending some Japanese government money on jobs for Nissan Leaf plant workers in Japan helps counter that all-export expenditure.
More than half a decade after Ghosn succeeded with his Nissan turnaround plan, the Japanese automaker seems to have been floundering as tough economic conditions converged with hyper-intense competition. At his press conference at the New York show, Ghosn displayed all the traits that made him popular with the public, the press, and his employees before the downturn. It’s far too premature to count out Renault and Nissan, or their leader.