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Published on July 4, 2007

Carlos Ghosn, president and chief executive of Nissan Motor Company, has a reputation in the global automotive industry as a "rescuer".

However, he puts it differently. "When a company is in trouble, it is like a sick patient. You must ask the patient: what [symptoms] do you have? And then diagnose the illness like a doctor."

He says the analysis of a company's problems is very important because without it a solution cannot be found.

"If the problem is put on the table and shown to the people - not just in a closed office - then we can formulate an action plan and follow it," he says. "We must diagnose [the problem] with the people, be committed to results and follow them. Then you can find a solution."

Significantly, Ghosn was in Thailand last week to visit Nissan's Thai operations.

He admits that Siam Nissan Automobiles is in trouble, to a certain extent. Its new pickup, the Navara, is doing only marginally well with a market share of 10 per cent to 15 per cent, while the market share of its passenger cars is arbout 3 per cent to 4 per cent, among the lowest of shares for world markets in which Nissan competes.

Having grown up a French-speaking Lebanese in Brazil, Ghosn (pronounced as in "grown", but without the "r") subsequently studied engineering in Paris. High on his list of business sensitivities are socio-cultural matters.

"The strength of Carlos Ghosn ... comes from his multicultural experiences, be they [in his] his professional or [his] personal life," writes his Renault predecessor, Louis Schnertzer, in a recently published memoir. "He has in his character the power - to an extraordinary extent - to carry people along, to galvanise big battalions, and a carmaker is about big battalions. And we [have] noticed the Japanese are particularly prone to being galvanised."

Ghosn joined the ailing Nissan in 1999, after the French carmaker Renault, where he was executive vice president, took a controlling interest in the Japanese company. It was debt-ridden and its share price had taken a nosedive. But instead of "Europeanising" Nissan, he has chosen to keep the two entities separate.

He says a closer French-Japanese synergy would be "impossible", because the Japanese and French working cultures are very different. Besides, he jokes, there are already many differences among the French.

The last time Ghosn visited Thailand was in 2004, when he announced big plans for Nissan after it took over the local distributorship. Since then the plan, which envisaged the introduction of a large number of new models to the market, has been revised.

Last week he visited the management team at Siam Nissan Automobiles and addressed the opportunities and problems the company is facing. He also visited its assembly plant and re-evaluated the long-term plan for Nissan in Thailand.

Referring to how cars will develop in the future, Ghosn says there will be three major changes.

The first is the development of low-cost cars with prices compatible with individual purchasing power in developing countries.

Nissan, for instance, has just announced that it will make a US$3,000 (Bt103,620) car in India, prompting US talk show host Jay Leno to joke that it was actually "a 1982 Datsun". However, Ghosn stresses that in many countries, consumers cannot afford a $5,000 car, and so what Nissan must do is to offer a $3,000 car that is better than other $3,000 cars already being offered by Chinese or Indian companies.

"The second change is establishing manufacturing bases in developing countries," he says. "This does not mean shutting down plants in developed countries, but creating more capacity in developing countries, because in developed countries we already have the history and the talent." This, he adds, will also involve global sourcing from developing nations.

The third change is towards environmentally friendly cars.

"Auto companies are looking for ways to lower carbon-dioxide emissions and other by-products considered unfavourable to public health," he says.

Developments include fuel cell vehicles, hybrids and diesels, as well as bi-fuel vehicles that make consumers "feel good about buying cars that are environmentally friendly."

Ghosn says growth in emerging markets will in future influence the decision-making and policies of multinational auto companies.

"The growth has shifted towards developing countries," he says. "There are 65 million vehicles produced each year and two-thirds are sold in developed countries. But what is interesting is that sales are stable in developed countries but are growing in developing countries like Russia, China, India and the Middle East. Growth is moving away from Europe, Japan and the US."

Ki Nan Tsui,

Kingsley Wijayasinha

The Nation