The Wall Street Journal recently sat down with the CEO and Chair of Nissan, Carlos Ghosn, and talk to him about his plans for reviving Datsun. The most striking topic that was brought up was his plan to create a $3,000 car. Many are speculating that there is no way to profit off of such a cheap car, by Ghosn is sticking to his guns. Here is the interview:
WSJ: Why Datsun, and why now?
Mr. Ghosn: The responsibility of every CEO is to make sure that you have enough waves for growth for the future…The most obvious one is geographical extension…But all car manufacturers are already practically everywhere. So in a certain way the growth [era] coming from geographical extension is ending because we are all global. We have, in our midterm plan, three [new] accelerators of growth that we have identified. The first one is [Nissan’s luxury brand] Infiniti….The second accelerator, obviously, [is] the [Leaf] electric car…And the third is low-cost cars.
When I say ‘low-cost car,’ I’m talking about the one that we mentioned, $3,000-$5,000, engineered and produced in India first and probably expanded after that to other markets for which we are building platforms and we’re working with partners…The third wave is very important because this is the one which is going to accelerate the move in emerging markets from people who are buying used cars, or people who are driving motorcycles today, or people who have nothing for transportation, to [enabling] people who would like a car. The only reason which is blocking them is the price.
WSJ: Can you make any money on a $3,000 car?
Mr. Ghosn: Oh yeah.
Mr. Ghosn: If you engineer well, and if you [don’t] build a car, but build a system around a car, then yes, it’s profitable.
WSJ: No other global auto maker has succeeded in the low end of emerging markets…
Mr. Ghosn: Good! Exactly! Good! So what? We’re going to be the one.
WSJ: But aren’t the risks incredibly high?
Mr. Ghosn: For the [cheap car] concept that [Tata Motors Ltd. Chairman] Ratan Tata launched [with its Nano model], I was the first one to say: ‘He’s right.’ I was the first one. Everyone criticized it, but I was the first one to say he’s right, we’re going to emulate this, and we’re going to do a good job on it…When you take a look [at] the global market, that’s the biggest next wave of growth…moving people who dream to have a car and cannot afford it because the cars are too expensive. That’s the biggest wave and it’s our duty to make sure that we can stimulate this wave and bring a product [to market] in order to do it.
WSJ: How long before a $3,000 car makes its way to the U.S.?
Mr. Ghosn: Our priority is not the United States, frankly. We were talking about India, we’re talking about countries surrounding India, we’re talking about the Middle East, Africa, Russia…If you go to the U.S., it’s not going to end up being $3,000. Because you’re going to have to reinforce the car, you’re going to have to face this test, and this other one, and etc. It’s going to be much more expensive. But you know, every time you create a concept like this, [then] yes, this concept can turn out being developed for new markets. But in a different shape and [with] more reinforcement.
[Source: The Wall Street Journal]