Hybrids not the way to go says Nissan CEO Ghosn
Despite the fact that Toyota and Honda are
leading the world in consumer hybrid gasoline-electric
technology, Nissan is not going to leap wholeheartedly on the
band-wagon, said their CEO Carlos Ghosn, at a meeting in New
Orleans at the end of January.
Carlos
Ghosn
Ghosn (despite an impossible to pronounce
name) is a very smart cookie, taking Nissan from a company
which was on the brink of collapse in 1999 to one that has
seen its sales increase by 24 percent in the US. He said that
the company has learned its lessons about investing in
technology, for the sake of technology, and would be looking
at the financial bottom line before going further into
technological territory.
“Nissan is a profit-driven company,” he
said. “If volume growth is antagonistic to profit, we
don’t want to go there. We don’t want to build or sell
cars that don’t make a profit.”
Now while that seems that it should be as
obvious as the nose on your face, many automakers use the
“loss leader” supermarket approach to their vehicle
line-up. Speaking to 4,200 car dealers and other industry
professionals, Ghosn stated that of the 16.9 million vehicles
sold in the United States in 2004, only 88,000 were hybrids. A
very small percentage of total sales.
Nissan
Altima
Even though demand has grown worldwide
because of concerns about the dangers of global warming,
decreasing natural fuel supplies and the rising cost of those
fuels, Ghosn remains unimpressed. “They make a nice story,
but they’re not a good business story yet because the value
is lower than their cost,” said Ghosn. “The same is true
for fuel cells. The cost to build one fuel cell car is about
USD 800,000. Do the math and you figure out we’ll have to
reduce the cost of that car by 95 percent to gain widespread
marketplace acceptance.” Ghosn does not mince his words! Of
course, many manufacturers share his thoughts on this. The
fuelling infrastructure to support hydrogen fuel cars is not
in place at all, and the introduction is probably much more
than 15 years away, say the experts.
However, Nissan will release a
gasoline-electric hybrid in the US joining Toyota, Honda and
Ford who already sell advanced hybrid vehicles in the United
States. This will be called an Altima, scheduled for
introduction next year, and this will use some hybrid
technology licensed from Toyota. Ghosn explained the seeming
turn-around by saying they were building the hybrid Altima to
meet the much stricter vehicle emissions standards in
California and other states.
(California regulators in September adopted
what would be the world’s toughest emissions standards to
cut greenhouse gases, although some automakers are challenging
the regulations in the courts.)
Ghosn, who is credited with the dramatic
change in fortunes at Nissan, is going to take over as chief
executive at Renault in May this year. (44 percent of Nissan
is currently owned by French automaker Renault, but Ghosn will
continue to oversee Nissan as well as taking on Renault.)
Heidfeld gets
the nod at BMW Williams
Who would partner Aussie F1 star Mark
Webber at BMW Williams has been a matter of conjecture over
the past three months. Finally it came down to Antonio
Pizzonia (AKA Jungle Boy) who was previously dropped by Jaguar
mid-season or German Nick Heidfeld, who has been skulking
around the back in Sauber and Jordan, without making any real
impression, in my book.
Finally, as they revealed their race
vehicle to challenge for 2005, Sir Frank Williams also
revealed that the number 2 would be Heidfeld. “We have
decided, at the last minute, that Nick Heidfeld would be the
team’s regular driver,” said Sir Frank Williams,
continuing on, “There was little to choose between the two
of them, and we were in the fortunate position to be able to
choose between two drivers who would be a credit to any
Formula One team.”
“Ultimately, however, it is Nick who has
got our vote, but I am delighted that we have strength in
depth with Antonio taking up the position of official test and
reserve driver.”
Heidfeld, who drove for Jordan in 2004, was
delighted to hear that he had got the nod to partner Mark
Webber. “I really wanted this job. Driving for Williams is
the greatest opportunity of my career,” said the man who has
been previously called ‘Quick Nick’.
Heidfeld does have a good history in the
lower formulae and was the F3000 champion before graduating to
Eff Wun, however, I have serious misgivings. When I
interviewed Heidfeld in Pattaya, when he was still with Sauber
at the end of 2003, I asked him who was the best driver in F1.
Race drivers need a healthy ego to keep going, and I expected
the response to be that he was the best, and fellow German
Michael Schumacher wasn’t bad either. However, I got the
very weak reply that it was difficult to say and judge, and he
did not want to be pinned down on that issue! If you are going
to be world champ, you have to borrow from Cassius Clay, who
said “I am the greatest,” and he certainly proved that
later on.
I am prepared to be wrong, but I think Nick is like Rooby
Baby Barichello, a good number two. I also wonder how much
influence the German BMW engine suppliers had in influencing
Sir Frank to choose the German driver?
FoMoCo move
again into China, bringing Mazda as well
Thailand may call itself the Detroit of
Asia, but it will not hold that title long. The coming country
is China, and with the deregulation or easing of restrictions
on doing business with China being evident, all the majors are
moving into China.
The new manufacturing plant is in Nanjing,
to make it the third plant in China for Ford, but the first
for Mazda. The local venture partner is Changan Automotive
group, about whom I have to say I know very little, other than
the fact that they are already a joint venture partner with
Ford at another plant in China.
Bill
Ford
Mark Schulz, Ford Motor Company executive
vice president said, “China is easily the third largest
automotive market in the world. With this new plant, we will
be introducing more Ford and Mazda products to the Chinese
consumer. But just as important, we will be introducing an
entire company to them and the way we do business and how we
care for the communities where we live and work.”
This is the same philosophy as they used at
the AutoAlliance plant here in the Eastern Seaboard Industrial
Estate. The difference is that the Nanjing plant can supply a
much larger local market. Forget about the idea that the
Chinese are sitting on street corners begging for rice. Those
days are long gone. You are looking at a newly industrialized
country, whose inhabitants have money to spend. If they
haven’t got the money right now, then Ford Credit will make
sure they have enough to buy a Ford car. That’s the way it
works. Ford makes more money out of selling money, than they
do out of selling cars!
The all-new vehicle manufacturing facility
will be the first in China for all three companies
(Ford/Mazda/Changan) working together. The 190,000 square
meter facility will have an initial manufacturing capacity of
160,000 units a year and could be expanded to as many as
200,000 units annually.
Highly flexible and capable of producing a
number of different Ford and Mazda vehicles, the new plant
will be fully integrated to support stamping, body assembly,
paint, trim and final assembly. Using the Mazda manufacturing
process as a blueprint, the jointly developed manufacturing
facility will feature the latest safety and environmental
standards to ensure the plant is friendly to both people and
the surrounding ecosystem.
Bill
Ford and Hisakazu Imaki
The new plant is part of the USD 1 billion
investment that Ford Motor Chairman and Chief Executive
Officer Bill Ford announced during his visit to China in
October 2003.
“This is an important next step in
expanding in China,” said Mark Schulz, Ford Motor Company
executive vice president. “The progress we have been able to
make, thanks to the support of central and provincial
authorities in China, is gratifying.” (And there’s a man
who gets 10 out of 10 for diplomacy!)
“With Mazda joining us in this new
project, we expand our ongoing cooperation that has us
building vehicles together on four continents,” Schulz said.
“By using a combination of Mazda’s manufacturing expertise
and Changan’s deep knowledge of China, all of us will
benefit.”
Mazda’s Hisakazu Imaki, president and
chief executive officer, added, “The plant in Nanjing is a
key part of Mazda’s overall business strategy in China.
Working with Changan Group and Ford, and putting to use
Mazda’s noted strengths in manufacturing capabilities, we
will build a plant able to deliver world-class quality and
efficiency. We are confident that the new plant will produce
vehicles both high in quality and performance; vehicles that
are exciting to drive and able to deliver the level of quality
Chinese customers certainly deserve.”
Despite all that coming from an official
press release, the important words were at the end - “the
level of quality Chinese customers certainly deserve”. This
plant is not trying to export, it is there to fill local
demand. Considering the total output of all auto manufacturing
in Thailand is around 600,000, this Nanjing plant has the
capacity to turn out one third of Thailand’s production, on
its own! Do we still think we are the Detroit of Asia? I think
we should change that to the “Detroit of SE Asia” before
it’s too late!
The press release continued to spell
further doom for the Thailand manufacturing claims. “Nanjing
is an ideal location,” said Yin Jiaxu, president of Changan
Automotive Group. “Our operations with Ford in Chongqing are
being expanded and production is going well. This new location
and Mazda’s participation will enable us to grow even faster
and to serve the populous eastern provinces of China even
better.”
Ying Zhanwang, former Vice President
Technology of Changan Ford, is appointed General Manager of
the new plant, putting to work his experience in Chongqing.
Masahiro Araki, former Production Engineering Division Manager
of Mazda Motor Corporation, is appointed Vice President of
Operations. Albert Li, former CFO of Ford Motor (China), is
appointed Vice President of Business Operations.
Autotrivia Quiz
Last week, I mentioned that a designer
produced a car in 1937 that featured front wheel drive and
rear wheel steering. I asked what was his name? It was a
gentleman from Belgium called A. Demati, if your Google failed
you?
So to this week. Folklore would have it
that the first cars to be built in Australia were the Holdens
in 1948, with the FJ now being an Australian icon. However it
was not the first car to be built Down-under. The first was
built in 1898. What was it called?
For the Automania FREE beer this week, be
the first correct answer to email [email protected]. Good
luck!
