Posted on Monday 28 January 2008
Carlos Ghosn is the man credited with turning around the fortunes of Nissan during the 1990’s, bringing it back from the brink of bankruptcy and turning billion dollar losses into profits within a couple of years. At the same time he also headed Renault, which is now on track to boost its sales 30% within the next 12 months. The Brazilian born CEO has now given insight on the state of the auto industry and where it’s headed in the not too distant future.
Ghosn sees the auto industry as being under strain and in need of major boost, just like Nissan was only a decade ago. The weakening U.S. market, rising oil-prices and the race among carmakers to dominate new markets is a problem for all labels and it’s one that has most of them stumped.
During his interview with the Wall Street Journal, Ghosn said electric vehicles will play a much larger role. Alliances between brands will also rise. Renault-Nissan, for example, is planning to develop new electric vehicles through its Project Better Place deal with Shai Agassi and will also supply cars to Chrysler.
One of the problems carmakers are facing in the U.S., he explains, is that there’s major movement towards small cars. The problem lies in the fact that most carmakers, especially the Detroit 3, don’t make any money in the segment. Some carmakers simply won’t survive, he said, or they will be taken over. Markets outside North America, on the other hand, are booming. Russia, India, China and Brazil all saw sales increase more than 20% last year, so there’s still plenty of opportunity left for the major carmakers, Ghosn said.
As for China and India, Ghosn is hoping to develop his own version of Tata’s $2,500 Nano. Together with India’s Bajaj Auto, Renault-Nissan will build a rival model but it’s still several years away at the earliest.
unfortunately he’s very right on that. the problem right now in the auto industry as a whole is that developed markets are either downsizing (USA) or changing their tastes to smaller cars (just about everyone). the future technologies are upon us and petrol engine tech is breathing a final breath into a dying technology. Electric cars will become the most logical mode of transport within 20 years, and simply put, some companies will not make the transition. It’s similar to the stereotype of the modern work place; there are people in the older generation who learned computers and email and those who simply did not.
I think hes definitely hit the nail on the head; america can’t make a small car at a profit large enough to sustain their current bulk. in the short term, platform sharing will reduce the cost of all cars but I hope the UAW and CAW are able to give more concessions in the future if need be. Also, the car companies need to streamline themselves. technology over the last 20 years has allowed most industries to streamline their organizations, however, this process has not happened at the big 3.
I think it all depends on the price of fuel, be it oil or ethanol.
Electric cars are great, but until there’s a quick charging one, and charging stations, I won’t buy one, and niether will most others.
There will be many early adopters, who will charge them in their homes, but apartment dwellers like me (and quite a few others, I would say) who have no access to an outlet where the car sits overnight can’t use this tech.
If more oil comes to market (and there are many new reserves coming online soon in the US) or cellulose ethanol becomes a reality (and the tech is advancing rapidly, with many quoting $1 per gallon in 10 years), and the costs stabilize or go down, then all we need are more efficient engines, not smaller cars.
Don’t forget the source: He is also making sure the stock of his companies goes up, he is not exactly what I would call an unbiased expert…
Oh I’m sure that ethanol production will become very economical in the future, however, I think fossil fuel consumption will be forever tarnished in one way or another since this whole green movement started.
Social impact aside; i do think that 20 years is a very safe timeline to say that battery tech will out perform petrol and alcohol combustion for most commuter applications. I think it would be foolish to suggest that heavy machinery will go electric any time soon, however anyone with access to a wall socket will find that buying an electric car that you just plug in at the end of the day is much more convenient, cleaner, and cheaper, than having a petrol or ethanol fueled car. I can assure you, if there were enough people buying electric cars, apartment complexes would install electric sockets in the parking garages. The same thing is happening in universities around the world with the explosion of laptops on campus. Old buildings that barely meet electric code are being fitted with as many sockets as makes sense.
I will comment about flex fuel: making ICE’s that can run on e85 is a great step forward because fuel cells dont need to run on hydrogen. fuel cells can run on ethanol and other chemicals as well. hydrogen isnt the only fuel for fuel cells. which one has the better energy density, who knows. but ethanol really is the way of the future. even in ICE’s, it can be used more efficiently.
He needs to find a way to buy out the oil companies first. The whole landscape is politicized. Alaska sends it’s reserves overseas, while it’s also regulated to the point of minimal efficiency, OPEC and other governments manipulate the oil industry, and every time a revolutionary fuel efficiency invention comes out, the inventor ends up at the top of some manufacturing plant or in an insane asylum. There’s no reason a car can’t get 50+ miles a gallon with more than respectable horsepower. What did that Shell car get with the catalyzed carburetor? 200-300 mpg. They approach it from the wrong angle purposely so that fossil fuel still reigns as the best in the end. Not to mention, the concept of ethanol is supported over the infinitely more effective use of bio-diesel, which is already waste so it kills 2 birds with one stone. Ethanol goes the opposite direction in interfering with food production and it’s not really that much if any better than plain gas. But, he is right about all companies trying to be everything to everyone. I knew it was out of hand when Mercedes built a minivan.
One of the sticky widgets with apartments will be those that don’t park in assigned spaces or on the street. How in God’s name will that work? Millions probably park on the street and in general parking lots. The only people who will be able to charge their cars on their dime will be those who have an assigned space underground or in a garage…
Ethanol will not mess with food production once cellulose ethanol is perfected.
I still see ultra-efficient gasoline engines and ethanol power to be less pie-in-the-sky concepts than full electric cars. Most people can’t afford more than one car.
We’ll see…
hmm interesting yet valid points but it also eems we will get stuck with small boring cars whilethe oslo markets get the cool shit, since it would make them money