“Making the Car a Mobile, Connected Workspace”
Carlos Ghosn has made a career out of handling crises. In the 1990s the celebrated car executive essentially saved first Renault and then Nissan, and for the past 11 years he’s served as CEO of both. A Brazilian-born Lebanese-Frenchman—the very embodiment of globalization—he somehow manages to be a hands-on executive on two continents.
He is also among the most recognizable figures in the industry. By restructuring Renault and restoring it to profitability, he earned the nickname “Le Cost Killer.” For his success in overhauling Nissan, which formed an alliance with Renault in 1999, Ghosn won the sobriquet “Mr. Fix-It.” And he is famously portrayed as a superhero in a Japanese comic-book series.
But technology can humble even the most successful executives, and Ghosn these days is focused on trying to remain an innovator. Dramatic advances—electric cars, vehicles that operate with significant autonomy, fully self-driving cars—threaten to shake up the industry. Upstarts like Tesla and even Google are now in the automotive business. The transformation is sure to crown new market leaders and ding some incumbents. “We expect major disruptions in technology,” says Ghosn, “which will change the product mix.”
The challenge seems to have energized the 62-year-old leader. He has invested billions in electric-vehicle development at both Renault and Nissan. He took a big gamble with the Nissan Leaf back in 2010. But although the Leaf is the industry’s top-selling all-electric car, with more than 200,000 units on the road, its overall sales are at least four years behind initial expectations. The problem, Ghosn says, isn’t with the product but with the slow development of the supporting infrastructure. But it’s a problem nonetheless.
And so Ghosn is scrambling to find ways to maintain his track record: tapping into synergies within the alliance, cutting costs, being the public cheerleader for his companies. In May he concluded another big deal, as Nissan invested $2.2 billion for a controlling 34% stake in troubled Mitsubishi Motors. The now-triple alliance presents Ghosn with further opportunities for cost savings—through shared work in engineering, production, and other areas.
It’s a complex managerial challenge, and investors have wondered aloud if anyone other than Ghosn could handle it. Renault and Nissan’s combined worldwide car sales last year totaled 8.5 million units. Add in the 1 million that Mitsubishi sold, and Ghosn’s companies are approaching sales of 10 million cars a year—making the alliance the world’s fourth-largest carmaker, after Toyota, Volkswagen, and General Motors.
Ghosn took a break from it all recently in New York City to talk with HBR’s editor in chief, Adi Ignatius, about the future of the auto industry.
HBR: A lot of the innovation in cars these days is coming from Google and others in Silicon Valley. Is that worrisome for the auto industry?
Ghosn: I’m not worried. Sure, it’s interesting to talk about Apple or Google making cars. But we have a long tradition of taking technology from the outside and putting it into our products. Automakers are architects. We assemble parts. We assemble technologies. We assemble know-how—all to make a product and bring it to the consumer. Our big challenge is, How do you put new technologies into a car while continuing to deliver on classic expectations?
Do you fear the rise of new manufacturers?
If a tech company wants to become a car manufacturer, it will buy an existing automaker and transform it according to its own criteria. But I don’t think that’s what tech firms are looking to do. The fact that new players are developing technologies to help make cars more attractive is good for us, because we never want to become a “commodity.” We want the car to continue to be a high-tech, exciting product that people desire. Today that comes from design, driving performance, and the quality of the materials. Going forward, we want to add more connectivity, along with more autonomous-driving functions.
What’s your vision for autonomous drive?
We’re introducing sophisticated functions to empower the driver, who can decide when to drive and when not to. And if he or she decides not to drive, we’ll have the technology to ensure that it’s in a safe and low-stress environment where the driver can be doing something else.
(Harvard Business Review)