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?
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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.
 Bill
Ford and Hisakazu Imaki
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.
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 automania @chiangmai-mail.com
Good luck!
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