TOKYO -- Now 16 years into his leadership of Nissan Motor Co., CEO Carlos Ghosn continues to drive and evolve the automaker. His plan to boost Nissan's operating profit margin to 8 percent -- from 6.7 percent for the six months ending Sept. 30 -- and capture an 8 percent global market share is less than a year and a half from his deadline. He vows to have fully autonomous vehicles in showrooms in five years, and he remains a strong supporter of electric vehicles, despite dismal U.S. sales.
Meanwhile, in a surprise move, the French government this year enlarged its ownership stake in Nissan's partner Renault, increasing the government's voice in Ghosn's Renault-Nissan Alliance. Ghosn, 61, spoke with Asia Editor Hans Greimel and Mid-South Bureau Chief Lindsay Chappell in late October during the Tokyo Motor Show.
Q: The French government has increased its ownership stake in Renault, and there are reports that you are considering a change in the structure of the Renault-Nissan Alliance. What's going on?
A: There have always been issues, there have been tensions and there have been different opinions. But it was always resolved in a way that was extremely wise and centered on whatever the benefits were for both companies. We never dwelled on it. We never mentioned it. We never made comment. And probably one of the reasons we always came to a good solution is because it didn't become a soap opera of the day. So I'm not going to make any exception today. As long as all the parties agree that the alliance is the biggest asset for both Renault and Nissan, then we're going to find a solution for any issue.
What is Nissan's outlook for the U.S.?
I was just asking the same question of our North American guys, and they're very positive about the U.S. They're not envisioning significant growth in the U.S., but it's a very healthy market at more than 17 million vehicles on an annual trend now. And for next year, they continue to see growth. We'll make our forecast in January at the Detroit auto show.
I'm not seeing any stress. I'm not seeing signs that we are out of breath. I wouldn't be surprised to see another 2 or 3 percent growth. I'm not saying that's our forecast, but the way things are going, I wouldn't be surprised.
Nissan's managers have just 16 months to reach the goals of an 8 percent operating profit and an 8 percent global market share -- 10 percent in the United States. What happens if the managers can't deliver on time? Will you clean house?
We were very clear when we set the targets of Power 88 that an 8 percent operating margin is a commitment. This is a clean-houser.
The 8 percent market share is a target. We said it from the beginning. It doesn't make sense to reach 8 percent market share if we don't get 8 percent profit, because it means that we're doing it in a way that's not sustainable.
The 8 percent operating margin I feel will be on time. We're on track. The 8 percent market share target relies on all the new products of the Power 88 plan to be launched. But the objective I feel the most comfortable about is hitting 10 percent in the United States.
The dynamic is good. We have a strong team in the U.S., led by Jose Munoz. The dealers are fired up. We're getting into the right segments. The Rogue is very successful, and now we're coming with the new Titan -- a very large U.S. segment where we're practically not participating. So the target of 10 percent in North America I feel very good about.
In the meantime, China has slowed. Could the slowdown become a contagion to the rest of the world?
The fact that China is no longer growing by 8 or 9 percent is going to have an impact on other economies, on commodity prices, on emerging countries. But this was predictable. An economy the size of China's can't grow at that rate forever. Everyone is disappointed, and people were panting because there were three months of decline. But September sales were up. October is up. Instead of it being a 10 percent-plus increase, we're going to have to get used to 5 or 6 percent.
Let's not forget that this is a market that is still under constraints. We're not seeing normal spontaneous demand. There are constraints because of infrastructure and emissions and other factors. In Beijing, you can't go buy a new car when you want. You have to be in a lottery. It's what they call the lucky draw. So consider that even with constraints, you continue to see a healthy sustainable growth there of 5 or 6 percent.
Nissan is developing a 60-kilowatt-hour electric-vehicle battery. Will it take away EV range anxiety?
Range anxiety is never going to be taken away, no matter how much range you give a car. Range anxiety will be taken away by just seeing where the next charging station is when you need one.
Battery range anxiety is created by the lack of charging infrastructure. And the day will come when infrastructure will be normalized for electric cars.
So much of EV marketing focuses on the financial equation -- how much money will I save by not pumping gas? Will that message change?
Thinking that you're going to sell electric cars for economic reasons is somewhat of an illusion. You're going to sell them more on emissions and incentives. Where you see EVs really taking off -- in Norway, for example -- it's because of what the Norwegians have done. They have penalized emissions so much that people are buying zero-emission cars.
The price of gasoline is going to be either headwind or tail wind for us. It will slow you down or accelerate you. But it's not going to change the direction of where we're going. The main driver is going to be emissions.
When it comes to autonomous-driving technology, does Nissan see companies such as Google and Apple as future competitors or as partners?
They can be both. They can be the partners of some car companies. They can be suppliers. Or I can't imagine it, but they can also make some different kind of car.
Could you imagine Nissan building the shell of a car and having these companies supply the technology?
The tech companies will take as much space as we are ready to abandon.
The direction is clear. There will be autonomous cars, connected cars, low-emission cars, on top of expectations for safety and driving pleasure. If we leave ground uncovered, or if we are slow to develop the technology, or you neglect to develop connected cars, then you are going to be calling for more competition to come from outside the industry.
In the past, you've been critical of fuel cell technology. But Nissan is developing it.
No. Let me clarify. We are developing fuel cell. We've been developing fuel cell for a long time. We have prototypes. We just think it's too early. That's all. We need to see how the infrastructure is going to develop. We're facing a problem already in the charging infrastructure of electric cars -- you can imagine the problem we're going to have with fuel cells. And there is a problem of cost, of scale.
I can understand that those who haven't developed electric cars are more tempted to go fuel cell. And they're in a hurry to put them on the market. But those who already have electric cars and have them on the street are not in a hurry.