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Published on July 4, 2007

Suthichai: I see from your press conference that you are not so happy with your company's performance in Thailand. What's wrong?

Ghosn: Well, when we compare our performance today to our potential, we are far from it. I think that many things are wrong. One of them is the fact that we are still not bringing to the market enough cars which are popular. We have cars that are very successful but playing more in the niche market. We need more popular cars. I'm not talking about pickup trucks, because our pickup trucks are pretty popular and are doing very well. So, this is the part of the problem.

Is it a regional thing? Is Asia - Southeast Asia - a market that may be different from where you have expertise in North America, in Europe, in Japan?

No, the market is about the same. What is different here is the fact that if you want to compete and to have a strong offering in Thailand, you have to localise your products. You have to make sure that the products you're bringing here can be sourced here by parts-makers.

Or perhaps the Nissan brand has lost its glory over the past few years?

Well, you know, when your product is not very popular, obviously it drags down the brand. So, when you bring better products, more attractive ones, it brings up the brand. So, the brand is not disconnected from the product. They go hand in hand. The brand is the result of a succession of successful products or a succession of not-so-successful products. And we are witnessing this in every market.

What do you plan to do with Thailand as a production base in comparison to other countries in the region?

Thailand is our export base, our second largest in Asia

after Japan. The plans for exporting pickup trucks are

set. Within the next few months, we will be exporting

to more than 120 countries. So, the massive export programme is starting now. And we feel very good about it. It's going

to be extremely competitive. We need to enhance a little

bit our potential as an export base into the car market. But, Thailand is the great export base. I think it will continue

to be because it looks like the government and the country care about being a base for

car manufacturers, not only producing locally but exporting. And it looks like infrastructure and different kinds of incentives are put

in the place to maintain Thailand as an export base even though there is emergence of competitors in China, India and other Asian countries. Thailand's already competing very well because most Japanese cars are established

in Thailand, using Thailand

not only in terms of a market, but also for export.

That's for the past 20 years. But from now on?

From now on, when we take a look to the investment made by Japanese car manufacturers, we're putting ourselves in it. The plants built in China are made for the main Chinese market or some export from China. But still I think the export base from Thailand is considered the most appropriate for the moment.

In what way are we more appropriate than China?

It's very simple. The cost competitiveness out of Thailand is very high. Frankly, I think as long as Thailand cares about being an export base, as long as people in Thailand and the country care about being effective export base, I think it will last. The day people don't care anymore, it will be lost to countries which are more aggressive in getting export bases. But, so far so good.

What's your priority, then, to be shifted from Thailand to China?

You know, when you are exporting, you always prefer

to be in charge. Why? Because in fact you're exporting to a market that you control. You want to be in charge of the whole operation from A to Z. Producing the product in Thailand, shipping it where

you think is the most appropriate country. If you have a partner, it's very difficult because a partner doesn't share the same priorities as you, doesn't share the same objectives as you. So, I would say on an absolute level when you are having an export operation, you'd better manage it alone. The Thai operation has a more competitive advantage due to total control.

You don't see a time when China will absorb everything from Thailand?

I don't think so. I don't believe a kind of everything or nothing. There is place for cooperation, for complimentary action, for competition, and that's what Asia is about. That's why everybody thinks that the 21st century is the Asian century. So many countries are trying to have a bigger share in the overall wealth of the planet: China, Japan, India and Southeast Asia. And this, in my opinion, is the best insurance that Asia is going to play a bigger role, that nobody is going to try to dominate the Asian market. And I don't think that anybody is in a position to dominate.

Thailand would like to be known as a Detroit of the East. Up to now, do you think that is a possibility?

It's still a possibility. In fact, it's partly a Detroit already with the amount of cars in Thailand and exports from Thailand. Thailand has a really fair share of the business of making cars and exporting cars. I think it's not a question of size. It's a question of ambition and a question of willingness. And it's a question of focus. I think as long as Thailand and the Thai government are focused on the car industry and willing to make Thailand a strong country in terms of making cars and exporting cars, I think it will be a reality.

Do you think Thailand still needs to do more along these lines?

Thailand will need to do more along these lines if it wants to be successful against emerging economies and emerging powers in Asia. But I think what has been done today is very good, frankly. The only thing that can reasonably help more investment in Thailand and more links to Thailand as an export base, is the development of an internal market. And that's very important because when you have a strong internal market, it will encourage investment, encourage industry, and at the same time it will encourage exports. That's one of the reasons for which China and India will be competing. Not because they are more cost-competitive. Or you find things in China and India that you don't find in Thailand. Practically, Thailand is competing very well. But the big influence is that the internal market of China is booming and the internal market of India is booming. And this is the something that you want to make sure of: that the Thai market doesn't become disproportionately small compared to these two markets.

Is there any special area where we should push harder?

There is a tariff between the countries inside Asean. Eliminate the tariff, simplify the rules and really try to act as if Asean is one country, at least in terms of trade. Because at least in one country when you go from one region to the other, you don't have to fill out documents. You don't have to pay taxes and tariffs. Everything could be done to create this kind of open trade space for the car industry inside Asean and this will be benefit all Asean countries, and particularly Thailand.

What's the next vision for Nissan after your great success? Is now the time to sustain it? Is it more difficult to remain on top than to climb up there?

No. I think, you know, when you're the CEO of a major global company, you know that there is no such situation where you can relax or enjoy it. The day you want to do so is when you should retire. There's always a challenge.

What is the next challenge for you?

The challenge for me is a double challenge. First, make the alliance a success. You know, Nissan and Renault have been in alliance for seven years. That's an alliance which is still standing on its feet and being successful, aware we are creating more value than each company could on its own. My first goal is to make sure that this alliance continues to grow and strengthen and, eventually, expand.

But we don't want to make it the subject of preoccupation but the subject of business, of competitive advantage. We've done something here that nobody has done. This is considered a competitive advantage.