‘We are starting to make money now in India after selling 100,000 Kwids’
THE INDIA RIDE A product that is successful in India will do well in other emerging markets also, says Ghosn
GENEVA: Carlos Ghosn, 62, is the global auto industry’s most charismatic and, some would say, best performing chief executive. He is also the chairman and CEO of French automaker Renault SA, chairman of Japan’s Nissan Motor Co Ltd, and chairman of Mitsubishi Motors Corp. He has turned around the fortunes of the first, rescued the second from near oblivion, and now wants to do the same with the third. On the sidelines of the Geneva Motor Show, Ghosn spoke to Autocar India on the alliance and his plans for Mitusbishi in India. Edited excerpts: You have kind of relinquished your position as CEO in Nissan and are going to be focusing on the alliance specific to Mitsubishi. In India, Mitsubishi’s problem was no scale, no investment and no appropriate product. Suddenly these problems matter no more because of the alliance. Will it be logical to assume that with the alliance there’s a big market out there for Mitsubishi? Without any doubt because, in India the most important step and our key for success — not sufficient but necessary — is the product. If you don’t have the product, you better not try your chance in India. It takes a lot of time to find a product. I think with the A-platform (the second of the so-called Common Module Family, or CMF jointly developed by Renault and Nissan, a sort of modular manufacturing system for cars), in particularly with the Kwid and all the products that are going to follow that, we think we have found our entry level (car) in the Indian market. But is an alliance platform. Today you are having a Renault product, tomorrow you are going to have a Nissan product. This platform will be open to Mitsubishi. So Mitsubishi could use it and you could go up and bring the Lancer back for example? Yes, but Mitsubishi has so many opportunities to grow that the management of Mitsubishi is going to have to prioritise what they are going to do first, second and third. I cannot tell you in what timeframe this will happen, but without any doubt, this is a very big market for future for any carmaker and for Mitsubishi in particular. So what you are confirming is that it’s not a question of if but a question of when Mitsubishi will come to India with guns blazing? We are not limited to the short term; it is going to obviously mean mid- or long-term. Everybody expects India to be in the top 3-4 markets in the future. So you can expect that what happened in China, where all the carmakers are present, is also going to happen in India, with exception that the Indian market is very tough for the foreign car maker because of the specificity of the product and market. Do you think you have an edge with Kwid? It is doing well and has already got a lot of things like design and the touchscreen. Yes we do and we are improving and we are listening to what the customers are saying in India. Not only to improve our offer for the Kwid in India but also to improve our offer for the Kwid outside India because you know a version of the Kwid is going to be launched in Brazil as a second step of the A platform. If you are going to make it in India, you are going to make it in many emerging markets. That’s why for us, testing and being successful in India and having a very strong acceptance of the product, a very competitive product in India is a guarantee that they will do well in other markets. Are you making money in India? Is this the tipping point? We are starting to make money now after selling 100,000 Kwids. We struggled at the beginning because it was the new plant and a new car so when you have so much innovation accommodated, you struggle with profitability. When you are going to a new emerging market with a new product, you have to be patient for your returns. In future, is the CMFB (for cars slightly larger than those on the CMFA platform) also expected? The volume that you expect from a car based on that platform is not going to be very big. So it can be an additional product, but you can’t have a strategy on this platform. Is there a lesson learnt by Nissan on the performance of its V platform (cars such as the Sunny and Micra that did not do well in India)? That you cannot bring a European platform into India because the cost is too high and the customers may not pay for it, so you have to have a tailored platform for emerging markets? You can bring copy and paste platform and product but that has to be a niche product. Don’t expect big volume coming out of it. If you want big volume in India, you will have to tailor it, even the platform. On the Renault strategy in India, you are selling around 10,000 vehicles every month and are the number one European carmaker in India. You’ve even rattled Suzuki. What is the aim? I think this is all due to the attractiveness of the product. We have some improvement that we can make in terms of competitiveness of our plant. You have previously mentioned that Tata Motors’ Nano is really an inspiration for the Kwid... When Ratan came with the Nano, I congratulated him and he said I was the only one who congratulated him because a lot of people said it’s a bad idea. No, it’s a good idea. We came with the Kwid at the end of the day and the Kwid was inspired by the Nano.