Ghosn shakes hands with workers at Mitsubishi assembly plant in Chon Buri yesterday.
Ghosn shakes hands with workers at Mitsubishi assembly plant in Chon Buri yesterday.

Not good enough, Ghosn tells Nissan

Corporate April 27, 2017 01:00

By KINGSLEY WIJAYASINHA
THE NATION

6,307 Viewed

NISSAN has done poorly in Thailand and will need to fill in unused capacity at its assembly plants here, said Carlos Ghosn.



Ghosn, chairman of Renault, Nissan and Mitsubishi, told journalists that Nissan has been underperforming in the Thai market and needs to catch up. 

“Our market share is short because you (Nissan Motor Thailand) didn’t do a good job,” he said. “In other markets, Nissan is on the same level as other brands but here our position is lower.”

Last year Nissan sold 42,677 vehicles in Thailand, dropping to fifth position behind Toyota (244,317 units), Isuzu (143,170), Honda (107,342)  and Mitsubishi (55,409).

Ghosn said Nissan and Mitsubishi will start sharing platforms and technologies in order to create cost advantages. 

“Eventually all platforms will be shared, including technologies like EVs (electric vehicles) and autonomous drive,” he said. “There is no point in an alliance if platforms are not shared.”

He said that in Southeast Asia Nissan and Mitsubishi have strong potential but are underperforming. “We need to raise cooperation especially in terms of purchasing and logistics as well as personnel exchange in the short term. For the long term, there are things like technology, sharing platforms, cross-manufacturing,” he said.

Ghosn confirmed that all new models that are introduced will be co-developed among the alliance brands. “This will help the smaller company, like Mitsubishi, to have access to technology,” he said.

Ghosn said the priority for Nissan and Mitsubishi in Thailand is first to fill in unused capacity.

“Our first priority is not about making additional investments but to fill capacities at both the Nissan (60 per cent utilised) and Mitsubishi (80 per cent utilised) plants. Both have room to fill,” he said “After that we’ll make additional investments if needed.”

R&D hub 

Nissan has opened a research and development centre in Thailand with 400 engineers, and spent $25 million to build a testing centre at its Samut Prakan factory grounds.

On EVs, Ghosn said Nissan and Mitsubishi will also be co-developing new models for the market.

“We are the largest producer of EVs in the world and our products are affordable, not $80,000 luxury cars,” he said. “With the first signal that there is government support for EVs, we will be the first to be there,” Ghosn said.

Nissan is developing a low-cost EV in China, and this model could also be produced and sold in other markets.

“EVs don’t come because of market demand but from government support. That’s why there aren’t any in Brazil, Russia or India, but there are in the US, the UK, France, Japan and China because there are policies to support electric cars,” Ghosn said.

Mitsubishi top exporter

In contrast to Nissan’s poor performance, Mitsubishi Motors has outpaced other global carmakers to become the No 1 automotive exporter in Thailand for the 12 months to March 31.

The company’s export performance means that its Laem Chabang factory in Chon Buri is now the largest global production hub for Mitsubishi Motors, with more than 80 per cent of all local production sold for export.

The record export performance coincided with Ghosn’s visit to the Laem Chabang Industrial Estate on Wednesday – his first since becoming chairman of Mitsubishi Motors in December.

The plant’s production capacity is the largest among Mitsubishi Motors’ factories worldwide, with the vehicles produced there sent to more than 120 countries.

“The Laem Chabang plant is a tremendous strength of Mitsubishi Motors’ business,” Ghosn said. “Our world-class production facilities are capable of producing 424,000 vehicles a year. As Thailand’s leading automotive exporter, this factory will become the global production hub for Mitsubishi Motors.”

 Mitsubishi Motors last year joined as a member of the Renault-Nissan Alliance, one of the world’s top three auto groups with annual unit sales of almost 10 million vehicles.

 The company’s Thai business will deliver synergies through sharing of best practice on cost controls, parts sourcing and productivity. It said its growth would be supported by better procurement, improved logistics, better plant utilisation and access to technology sharing and common vehicle platforms, reflecting the alliance’s larger investment in research and development.

Mitsubishi Motors operates four plants in Thailand that employ more than 6,000 workers.

Last fiscal year, the company’s Thai operations produced 353,000 vehicles. The main export destinations are Europe (28 per cent), Asean and broader Asia region (25 per cent), North America (21 per cent) and Oceania (12 per cent).