Q&A: Ghosn says Nissan will rely on products, not incentives to achieve growth

Frankfurt/Tokyo. Carlos Ghosn, president and CEO of Nissan, describes the next phase of his strategy following three years of a rigorous restructuring that has turned the Japanese company into one the world's most profitable carmakers.

Q: Mr. Ghosn, will you be able to maintain the current speed of your restructuring program in the long term?

A: Yes, because there still is a lot of potential - in the markets as well as in regard to the products. Of course there is no 100 percent guarantee. However, it is very likely that the company's growth will continue this way for a long time.

Q: Does that also pertain to the high profit margin of 10.8 percent?

A: That will increase even further. It is more important to increase profitability for the whole of the group. We want to fund our own growth. That is why we will not be working with incentives just to increase our sales volume. That way we lost a little on some sectors in the USA in 2002 but our total sales volume increased by 1 percent.

Q: In August, Toyota overtook Chrysler in the USA for the first time. Does Nissan have similar plans?

A: No. We are not about sales volume. Our aim is to be the biggest regarding added value. We want our employees to be proud to be working for us, our customers to find our cars exciting and we want our stock holders to make good profits. Those who bought Nissan shares in 1999 have a reason to celebrate: the shares' value has tripled during the past four years.

Q: Nissan's situation in Europe is a little bit more difficult.

A: That is true. We are more successful in the USA. There the product sectors are huge, they speak one language, there is one marketing strategy and one sales network. In Europe only our name and the currency are the same. Primarily small sedans are in demand and every country has different expectations. Germany for example is very brand-oriented. It is easy to make mistakes in the beginning. However, we now profit from our joint venture with our partner Renault, who helps us for example with diesel engines. Our advantage in regard to other Japanese manufacturers is that we can coordinate the launch of new models with Renault.

Q: What are your biggest problems in Europe?

A: Not the biggest problems but the biggest opportunities, even if the market is very competitive. Our profit margin in Europe is much lower - that can only improve. Here too we are not planning to reach growth through incentives but through our attractive products at a cost that we can afford.

Q: With which models are you hoping to do so?

A: The chances are good for our SUV models. It is difficult to make more business with the sedans as the competition is very big. We have to develop attractive crossover models.

Q: Is the sales structure right?

A: No, the organization in Europe is too complex. There are too many overlaps and not enough communication - it is easy to forget about the customers' demands. Our aim is to have a simpler and leaner organization, which can react to the market demands more effectively.

Q: Will you introduce the luxury brand Infiniti in Europe?

A: It is possible. However, currently there are no such plans. First we will have to rebuild the brand. Since 2002 we succeeded in turning Infiniti into the fastest growing luxury brand in the USA. Europe would be the next step for Infiniti.

Q: The markets in America and Europe continue to be weak. Nevertheless you are hoping to sell one million more cars by 2004 than in 2001. Is that realistic?

A: Yes, we have the necessary products and capacities. In the current year with planned sales of 3,040,000 units we will be crossing the three million mark again for the first time since 1990.

Q: In 2005 you will replace Louis Schweitzer as Renault boss. What will happen to Nissan then?

A: I have to clarify something: I will not be leaving Nissan just like that. At first I will be managing both jobs: president and CEO at Nissan and president and CEO at Renault. Of course there will come the day when Nissan will not need me anymore, but that won't be in 2005. I feel that I owe this to the Nissan stock holders.

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