Carlos Ghosn, the man who drove Nissan into India, stepped down as the Japanese automaker’s chief executive on February 23. At the helm of Renault Nissan Alliance since 2005, Ghosn decided to now dedicate his time and attention to overhaul of the loss-making Mitsubishi Motors, which the alliance acquired in 2016.
After Renault bought a large stake in the nearly bankrupt Nissan, Ghosn was sent in 1999 to revive the Japanese carmaker, which by all testimony he has fulfilled by the time he stepped aside. This also earned Ghosn the moniker “Mr Fixit”.
Ghosn started off with a ‘Nissan 180’ plan from 1999-2006, aimed at increasing global sales of Nissan by one million vehicles. This not only helped keep Nissan afloat but also gave Renault more power. In 2001, Ghosn was named Nissan’s chief executive.
In the following medium-term plan -- ‘Nissan Value-Up’ – Ghosn focused on entry in emerging markets like China and India, which would give impetus to building Renault-Nissan Alliance as a global brand.
Ghosn and Nissan India
Nissan initially tried to enter India by 2006 in partnership with Bajaj to make a Nano-like car. But the plan was shelved. Opportunity finally arrived with the 2010 launch of small car Micra, followed by a locally-made sedan Sunny in 2011, and Terrano in 2013, the twin to Renault’s Duster launched in 2012.
Carlos Ghosn had plans to make Nissan primarily a big-car maker in India, but adapted to the ever-changing Indian car market where smaller and compact cars were selling like hot cakes. Eventually, Nissan launched its sub-brand Datsun in India, with small cars like GO, GO+ and the latest redi-GO.
“Nissan’s growth in the Indian market has been underwhelming without doubt and the strategy to bring in a budget brand in the form of Datsun has also not played out well so far. Despite its sketchy performance, Datsun has already dislodged Nissan from the spotlight as far as the Japanese automaker’s Indian operations are concerned,” IHS Markit analyst Anil Sharma says.
When appointed as the CEO of Nissan in 2005, Ghosn was the first CEO to simultaneously lead two Fortune 500 companies. He was doing businesses of east and west across the globe. “We never made a decision about Renault in Tokyo, and we never made a decision about Nissan in Paris. These two companies had nothing in common except the willingness to cooperate in some areas for the good of both. I carried separate briefcases and had separate schedulers; the job organized itself,” he writes in one of his blogs on Nissan’s website.
Ghosn’s love for India is evident. “I always admire what you call Jugaad, but this is not what we want to leverage in India but want to make it a weapon in the global market,” he had said in 2012, during nascent stages of the Kwid, the car that deepened Renault’s roots in India. Although the Datsun GO series has not done equally well, Ghosn’s leadership at the top has kept the numbers ticking for the alliance.
Ghosn also was the man behind development of the V platform in India, which underpinned the sedans and hatchbacks of both Renault and Nissan and can hold crossovers too. The V platform was manufactured in India and exported globally owing to far greater international market demand than local.
“Le Cost Killer”, as Ghosn is popularly known for his dramatic cost-cutting moves to generate profits, will continue to serve as the chairman of Nissan Motor Company, and will continue to oversee operations. Will his stepping down as the chief executive make any difference to Nissan’s India story? The jury is still out on that.
A Nissan India spokesperson said there would not be any major sudden impact, though he refused to make any comment in addition to the company statement. Analyst Sharma also doesn’t expect to “see any big changes in Nissan’s India strategy right away as the focus will be on reviving Mitsubishi instead of drubbing down the former”.
Ghosn has a major task at hand now: overhaul of the troubled Mitsubishi to which Nissan threw a lifeline in May buying a one-third stake for about $2.2 billion. Will Mitsubishi, which was well-known for Lancer and Pajero in India, see a sunrise, again?
Analyst Anil Sharma believes there is ample room for Mitsubishi to grow as an SUV brand in India, as it would let Nissan, Datsun and Mitsubishi operate in largely different spheres, ultimately helping the group’s cause.
In 2016, Renault-Nissan Alliance grew by over 52% to become third largest carmaker in India, only below Maruti Suzuki and Hyundai. While others are struggling in this dynamic market, Nissan’s success in India as well as globally shows why Ghosn, a Lebanese Brazilian Frenchman, is a legend in Japan. They’ve even made a manga comic telling Ghosn’s story.
The author tweets as @GulshanMWankar