Fleet News

Face to face: Carlos Ghosn

IF fleet sales are all about market share and volume, then Nissan is losing interest.

Although fleet sales fell by 4.6% in the UK, the company's chief operating officer Carlos Ghosn would be happy if it meant profitability was maintained.

Profitability has become Ghosn's obsession since he took the reins at Nissan in July 1999, after Renault took a 37% share in the ailing Japanese company.

On October 18 that year, Nissan announced a global recovery plan to cut its £8 billion debt in half within three years and reduce costs by £5 billion.

More than four years on and Nissan is now well on the road to recovery, although it is scaling down its fleet sales as Ghosn's fixation with profit is applied in all its markets. Ghosn said: 'Fleet is not the most exciting part of our business. We are looking to improve profitability and not chase market share, so maximising our fleet business is not part of our objectives at Nissan.'

Although cars like the Almera and Primera were once high on fleet policies, Ghosn sees Nissan as a major player on the 4x4 market in the future, while new vehicles like the 350Z and X-trail have guaranteed user-chooser appeal.

The heavy-duty Terrano and Patrol continue, while the X-trail 'soft roader' has been a huge success, and there is potential for more four-wheel drive vehicles in the range.

A car like the Nissan Pathfinder, the latest version of which was unveiled in Detroit in January, is being touted as a potential Land Rover Discovery rival, the X-trail has made inroads into Primera sales.

Ghosn is determined the replacement for the slow-selling Almera has to be a different type of vehicle.

'We don't think we can be profitable by bringing another Almera to the European market,' he said. 'We are not moved by market share or volume – we must make a profit.

'We have come to the conclusion that by bringing in a traditional replacement for the Almera, the number of cars we would have to build to make a profit would be too great. The figures are telling us we have to do something else. We have to consider cars in fields where nobody else has gone.'

Nissan showed the Actic concept as a potential medium sized car at the North American International Auto Show in January, while another medium car concept called Qashai will be unveiled in Geneva next week.

Design now plays a bigger role at Nissan, with the Primera possibly proving too radical for the conservative fleet market. Meanwhile, the latest Micra is performing well in the supermini segment.

But Ghosn believes design alone cannot ensure a car's success.

'Design is important,' he said, 'But not the most important. The Micra is successful. The design is the first thing you notice about a car. It attracts people, but to be successful the car has to have the right level of performance, comfort and so on.'

Ghosn hinted that there are more vehicles in the pipeline based on the Micra, but there are no plans to build a smaller car in the city car segment, pointing out that the bigger the car, the bigger the profit for Nissan.

'We don't need a smaller car than the Micra, but it would be a good idea to build more cars off the same platform. Some companies might make a profit in the B-segment, but we believe there is more to be made from 4x4s, SUVs and cross-over vehicles.'

Nissan is expected to launch the Murano sport utility vehicle in Europe in the next 12 months. The distinctive four-wheel drive car has been a huge success in North America and Nissan Europe is keen to introduce it.

Ghosn said: 'The Murano wasn't wanted in Europe or Japan when we unveiled it. It had a slow start and for a few months performed below our sales targets.

'But people were just getting used to it. It has been a very consistent performer with about 5,000 units a month in the US.

'The European team is interested in the Murano and we have already decided to release the car in Japan. We aren't going to force our sales people to sell cars they don't want to sell – they have to want it. If we imposed it on them it would be a disaster.'

He also indicated that the company's luxury brand Infiniti would eventually come to the UK, but ruled it out for the next five years.

'Infiniti will come to Europe one day, but not in the medium term. We have other priorities at the moment that come first. We must make sure Infiniti is successful in the United States, but we are going to build it as a global brand. It will happen step by step. However, there is no reason why we could not have success with the brand in Europe.'

A cloud on the horizon for Ghosn is a lack of clarity from the British Government about its intention to join the Euro.

Nissan will make a decision this year on what type of product will replace the Almera in 2006, but next year it will have to decide whether or not it will be built in Sunderland.

A row broke out two years ago when a decision was needed on where to build the new Micra, with Sunderland just scraping through.

He offered the Government a stark warning that future investment in the plant would be under threat if the UK remained outside the Euro zone.

Ghosn said: 'We build three products in the UK – the Micra, Almera and Primera. The question is not 'do we maintain the plant', but 'do we invest in Sunderland or do we choose somewhere else'.

'If the UK is in the Euro by 2006 it's a no-brainer because the plant is already there. If the UK is not in the Euro we're going to have the same 'soap opera' we had two years ago.

'It's not a Nissan story, it's a UK story. How can we continue to produce vehicles in a country where we build in a different currency from where we sell? I thought we would have this situation for the last time with the Micra, but unfortunately it has returned.'

For now, though, Ghosn can take pride in his turnaround at Nissan, with healthy coffers and a range of attractive products in the pipeline that will be both distinctive and attractive, making the worthy-but-dull traditional fleet car a distant memory.

Rescuing an ailing company

  • First you have a vision. A destination where you would like the company to be three, or five or 10 years ahead, and then get everybody looking in the same direction.
  • When you have established a vision, you must establish a strategy. There can be no strategy without a vision. If you show where you are going, you have to show how you are going to get there.
  • After the strategy, you must deploy an action plan and tie yourself to certain commitments. People have to see accountability and if things don't work out you have to go.
    By Carlos Ghosn

    Carlos Ghosn: life and times

    Ghosn was born in Brazil in 1954 and graduated with engineering degrees from Ecole Polytechnique in 1974, and Ecole des Mines de Paris in 1978. He joined Michelin in France in 1978 and was appointed plant manager in Le Puy. In 1984 and 1985 he headed the research and development of earth mover and agricultural tyres in Ladoux, France, and then served four years as chief operating officer of Michelin's South American activities, based in Brazil.

    In 1989 he was appointed president and chief operating officer of Michelin's North American companies, and in 1990 was appointed chairman, president and CEO of Michelin North America. He presided over the complete restructuring of Michelin North America after the acquisition of Uniroyal Goodrich in 1990.

    In October 1996 he joined Renault and was appointed executive vice-president of the Renault Group two months later. He was in charge of advanced research, car engineering and development, car manufacturing, powertrain operations and purchasing.

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