“Making the Car a Mobile, Connected Workspace”: An Interview with Carlos Ghosn
He is also among the most recognizable figures in the industry. By restructuring Renault and restoring it to profitability, he earned the nickname “Le Cost Killer.” For his success in overhauling Nissan, which formed an alliance with Renault in 1999, Ghosn won the sobriquet “Mr. Fix-It.” And he is famously portrayed as a superhero in a Japanese comic-book series.
But technology can humble even the most successful executives, and Ghosn these days is focused on trying to remain an innovator. Dramatic advances—electric cars, vehicles that operate with significant autonomy, fully self-driving cars—threaten to shake up the industry. Upstarts like Tesla and even Google are now in the automotive business. The transformation is sure to crown new market leaders and ding some incumbents. “We expect major disruptions in technology,” says Ghosn, “which will change the product mix.”
The challenge seems to have energized the 62-year-old leader. He has invested billions in electric-vehicle development at both Renault and Nissan. He took a big gamble with the Nissan Leaf back in 2010. But although the Leaf is the industry’s top-selling all-electric car, with more than 200,000 units on the road, its overall sales are at least four years behind initial expectations. The problem, Ghosn says, isn’t with the product but with the slow development of the supporting infrastructure. But it’s a problem nonetheless.
And so Ghosn is scrambling to find ways to maintain his track record: tapping into synergies within the alliance, cutting costs, being the public cheerleader for his companies. In May he concluded another big deal, as Nissan invested $2.2 billion for a controlling 34% stake in troubled Mitsubishi Motors. The now-triple alliance presents Ghosn with further opportunities for cost savings—through shared work in engineering, production, and other areas.
It’s a complex managerial challenge, and investors have wondered aloud if anyone other than Ghosn could handle it. Renault and Nissan’s combined worldwide car sales last year totaled 8.5 million units. Add in the 1 million that Mitsubishi sold, and Ghosn’s companies are approaching sales of 10 million cars a year—making the alliance the world’s fourth-largest carmaker, after Toyota, Volkswagen, and General Motors.
Ghosn took a break from it all recently in New York City to talk with HBR’s editor in chief, Adi Ignatius, about the future of the auto industry.
HBR: A lot of the innovation in cars these days is coming from Google and others in Silicon Valley. Is that worrisome for the auto industry?
Ghosn: I’m not worried. Sure, it’s interesting to talk about Apple or Google making cars. But we have a long tradition of taking technology from the outside and putting it into our products. Automakers are architects. We assemble parts. We assemble technologies. We assemble know-how—all to make a product and bring it to the consumer. Our big challenge is, How do you put new technologies into a car while continuing to deliver on classic expectations?
Do you fear the rise of new manufacturers?
If a tech company wants to become a car manufacturer, it will buy an existing automaker and transform it according to its own criteria. But I don’t think that’s what tech firms are looking to do. The fact that new players are developing technologies to help make cars more attractive is good for us, because we never want to become a “commodity.” We want the car to continue to be a high-tech, exciting product that people desire. Today that comes from design, driving performance, and the quality of the materials. Going forward, we want to add more connectivity, along with more autonomous-driving functions.
What’s your vision for autonomous drive?
We’re introducing sophisticated functions to empower the driver, who can decide when to drive and when not to. And if he or she decides not to drive, we’ll have the technology to ensure that it’s in a safe and low-stress environment where the driver can be doing something else.
What does “empower” mean?
It means giving you options. I don’t hear anyone say, “I love driving in traffic jams,” or even on highways with miles and miles of road ahead. But people love driving in the countryside, where they can enjoy the car’s performance. In the future, when you’re bored, you can give up the driving. And when you are excited about being behind the wheel, you can take back control. We know that consumers want that.
What are some of the most promising of these self-driving features?
We already have single-lane autopilot. When your car deviates from the lane, the system brings it back. We have an autonomous braking system. If you get too close to the car in front of you, the car brakes without your intervening. The car is making decisions, for safety reasons, without you. And there’s autoparking. Cars will be able to park themselves. The ultimate step is for cars to be able to handle city driving.
How close is the industry to producing these kinds of advanced autonomous vehicles?
It’s coming in waves. Cars today already have a lot of autonomous functions. People will really notice it when these functions combine to offer drivers the full possibility of giving up driving. We plan to bring such a car to market in 2020.
Will competitors beat you to it?
According to their statements, yes. But the reality? We don’t know. We’ve heard a lot of claims. Some carmakers said they’d be mass-marketing fuel-cell cars this year. Come on! Selling 500 cars is not mass-marketing.
I assume these innovations will create tricky new liability issues.
Not with autonomous cars. Because at the end of the day, the driver is responsible for the vehicle, even as he or she has more ability to give up the driving. There is a robust and important dialogue taking place about this, but ultimately drivers must understand their legal responsibilities while behind the wheel. At the same time, automakers must take steps to educate customers about how much control they can cede to the vehicle. The manufacturer is responsible if the car malfunctions. The confusion starts with driverless cars, like Google’s, where you have no one inside calling the shots.
Hardware and Software
It seems that you now have to manage a couple of cycles: the car-design cycle and the technology cycle, which I presume turns over more quickly.
Yes, but it’s manageable. It’s like the smartphone. You have hardware, which can last for a while, and software, which adjusts all the time. The car is going to last five or six years, while the software inside can be updated far more rapidly and from a distance.
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