Look for Nissan Motor Corp. to channel more money into product development over the next few years.
For the past two years, the Japanese automaker has allowed its investment in new product to fall to 3.7 percent of net sales.
No more, vows the company's new COO, Carlos Ghosn. Nissan will raise the annual investment level to 5 percent of net sales, said Ghosn, speaking to reporters last week at the Detroit auto show.
'It is our blood,' Ghosn emphasized.
The executive asked reporters what sense it made for Nissan to tie up its capital maintaining an ownership position in fellow Japanese automaker Fuji Heavy Industries Ltd. when Nissan's product development efforts were going underfunded.
Ghosn was installed as operating head of Nissan after Renault purchased an equity stake last year. He is charged with restoring Nissan to profitability and improving its competitiveness over the next three years. Late last year, Ghosn announced a timetable and tactics for achieving that goal - including slashing global procurement costs by 20 percent, closing unneeded Japanese plant capacity and reducing worldwide employment.
But Ghosn cautioned that all of the money saved in the process would not make it to Nissan's bottom line. Some of it, he said, would be pushed into bringing new products to market.
He complained that while Nissan was one of the first importers to enter the U.S. market, other import brands had overtaken it in sales. 'A lot of cars were not developed when they should have been,' he said.
He said that Nissan had allowed some models to age when it should have been updating and replacing. Said Ghosn: 'It's a bloodbath when the competition comes out with a new car.'