Transcript from a media round table session with Carlos Ghosn at Auto China 2016

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24-03-2023, 12:01 PM

BEIJING, China – At Auto China 2016, Nissan unveiled the all-new Tiida and announced the local launch of Maxima, strengthening its product offering for young consumers in China. Additionally, the Nissan IDS Concept premiered, bringing the company's vision for the future of EVs and autonomous driving (AD) to China.Following are remarks from a media round table session during the show with Renault-Nissan Alliance CEO Carlos Ghosn. The main questions were on EVs, but there were also questions about Autonomous Drive, the global SUV boom, Nissan's growth in China, and the recent agreement between Renault and Nissan.Q1: [In Chinese – about electric cars]Carlos Ghosn: Well I suppose by new energy vehicle you mean electric cars, okay, so let's talk about electric cars. About electric cars today we have an offer which is what I call a high spec offer, high spec offer. Nissan introduce it with the Venucia model and Renault will be introducing it with the Freelance Electric that will be introduced to the Chinese market following commitment made by Renault to introduce electric cars. This is what I call high spec which means high price with very good performance but today these models are not selling very well in China. What are selling in China are lower spec models, more affordable price, so we are both from Renault and Nissan continue to develop high spec model by making it lower cost, more autonomy, more range, that's one thing but also we are working very hard into introducing a low spec affordable electric cars and with this we are working with our friends from Donfeng because we think that in order to be a big player in the Chinese market we need both offers – high spec, low spec, higher price, lower price – because I believe that the support that the Chinese government is giving to electric cars is going to continue and it's going to be stronger.Q2: [In Japanese – about Mitsubishi]Ghosn: Yes, first as you said Mitsubishi is at the same time a partner and a competitor. I've never made any comments on any car market which is finding itself in this kind of situation in the past, we need to respect each car makers identity and each car makers strategy and each car makers decisions or response to this kind of problem. We will wait until the complete unveiling because I understand there is an inquiry taking place today both from Mitsubishi with the supervision of the Japanese government, we will wait until all the conclusions have been known. We are obviously involved because as you said we are buying from Mitsubishi many of these cars, I'll wait until all the facts are on the table to make a decision as a business person but we will do it as business people without being involved into anything else, anything else that is different from the interests of Nissan.Q3: [In Chinese – on Renault Nissan cooperation]Ghosn: Well the co-operation between Renault and Nissan is very simple, we have common platforms, we are trying as much as possible to be more efficient on investments, investments on technology, investments on gaining scale in technology but at the same time we are keeping the brands very, very separate, very separate. Why? Because we want the two brands to appeal to their normal customers. Nissan is a Japanese brand competing mainly against Toyota, Honda, Hyundai, Kia etc, etc, Renault is a European brand competing mainly against other European brands and we want to continue to have this distinction. The Alliance exist for 16 years and for 16 years we have been co-operating together and for 16 years nobody can say there has been any cannibalisation between the two companies because we have been always careful to maintain the co-operation to everything that consumers do not care about and, on the contrary, maintain a complete differentiation on everything which is important for the consumer and you are going to continue to see this into the future. So more common platform, more common technological bricks, a completely different association and completely different definition of the product in function of the Nissan DNA from one side or the Renault DNA from the other.Q4: [In Chinese – on selection of suppliers]Ghosn: It is difficult to answer your question because first we need to make sure that on these technologies, like autonomous cars, connected cars, zero or low emission cars, the objective is to come as soon as possible to the market in the most efficient way. So we don't select suppliers by nationality, we don't. We select the suppliers who can give us what we need. For example on batteries we are working with LG Chemical, we are buying some batteries from LG Chemical, LG Chemical is a Korean company, it's not Japanese, it's not French, etc. Why are we working with LG Chemical? Because we think LG Chemical has the best performance. So I don't want you to think that we select suppliers by citizenship, we select the supplier first in function of their ability to deliver what we want and their ability to partner with us. So obviously the ability to partner with you usually means some kind of cultural proximity. Two Japanese companies are going to be partnering more easy than a Japanese company and a non-Japanese company, two European companies are going to be partnering more easily than a European company and a non-European company but at the same time you have to have some kind of cultural proximity for the long term relationship but then you look also at the performance of each company and you make decisions. So from time to time we are going to choose a Japanese company, from time to time we are going to choose a French company, from time to time we are going to choose a Korean company or from time to time we are going to choose a Chinese company, okay. So decisions are made one by one but what prevails is ultimately the performance of our offer onto the market.Now on autonomous drive you are going to see every kind of configuration, you know the Germany company collides together to buy Here which is an affiliate of Nokia. Okay, fine, does it mean we're going to join? We don't know but we are considering the offer from Here, we are considering the offer from Mobileye, we are considering other offers and we are going to continue to have as much as possible the choice. What is important is not so much how comfortable you feel with the supplier, it is how effective you think the supplier is going to be into delivering this performance because I can tell you that on autonomous drive, on connectivity and on electric cars, the competition is going to be very tough so you cannot be complacent or select people only because you're comfortable with them or because they speak the same language as you. You are going to have to select on function, their ability to deliver the performance that you want.Q5: [In Chinese – on EV platforms and smart vehicles]Ghosn: Well first I don't think we're going to … Let's start with the EV platform. High spec EV very probably will be one platform but I don't think high spec EV and low spec EV are going to be common platforms so answering your question, no, there are going to be two platforms, high spec and low spec, that's for sure but we still have to build one high spec EV and one low spec EV, that's the intent. For the moment we're not there. Now for the first question which was smart vehicles, the question was what? Ah yes, yes, but we have to be very careful because with the development of smart vehicles you can understand that there is a lot of traps on quality. So we have first traps on quality so we have to be very sure that with the short cycle you don't fall into this trap number one and second, with the development of the smart vehicle you have a lot of problems about cyber security appearing that we need to solve. So yes, we are going to have to move faster but at the same time we want to make sure that we're not falling into any traps or in terms of quality or in terms of security of the data and security of the users. So this is a complicated problem and if you tell me, do we need to move faster? Yes, we need to move faster but at the same time we have to be very careful by moving faster that we don't compromise anything about cyber security or anything about the quality and the reliability of the data.Q6: [In Chinese – on market share of electric cars]Ghosn: First let me assure you that I don't forget any one of the questions please, keep that in mind. The first one is yes, we are disappointed. We are a promoter of electric cars, we are, we were the first one in 2006 to go the electric car has a future in this industry and we were the only one, the only one, okay. Nissan and Renault took the lead on electric cars in 2006, we announced it, we told you what we were going to do and we are moving with the electric car. At that moment there is nobody coming with electric car, now everybody is coming with electric car, that's fact. In Europe in 2015 Renault and Nissan had more than 50 percent market share of electric share. Good, the European market is growing and both Zoe and Leaf are leading, good, this is fair. In the United States we are moving ahead, we are facing some headwinds but we are coming with higher range cars because the range is an issue, there is competition coming from General Motors and from Tesla, good. In China we brought the car but we are not selling it and we're not selling it because we are being told that it is too expensive and the range is maybe not as big as the consumer wants.So what's selling? We look at what are the electric cars that are selling in China and the electric cars that are selling are 25 percent lower POC price than the Venucia and with the range that is higher than the Venucia. So we have to be very clear, we need to lower the price and increase the range. We know how to do that, it is going to take a little bit of time but we know how to do it but at the same time what is really evolving are the cheap electric cars and this is where we have no offer and this is where we need to develop an offer. So I don't want you to have the impression that we have a car and it's okay, we said we are not selling it and it's a problem. No, we need to follow the market, not only the market follows us but we need to follow the market so our strategy in China is going to be first adapt our product to the market needs but at the same time come with other products that is really selling today in China. So I cannot tell you I am happy with the sales of Venucia electric, I'm not but at the same time that's not sufficient, what is important is what are the root causes, why are we not selling this car, what should we do in order to sell this car and what are the Chinese consumers buying in terms of electric cars? I am convinced that China will be a very large electric car market, not hybrid, electric because the Chinese government has been very clear in supporting zero emissions and putting a lot of incentives behind electric cars. So we have a very clear signal from the Chinese government that they want electric cars and they want the development of electric cars so we are going to follow and we are going to contribute.Q7: [In Chinese – on SUV and Chinese infrastructure]Ghosn: Okay, these are two questions which are totally legitimate. Let me take this opportunity to ask the Head of Renault in China, M. Prevost, to tell you why Koleos is important and why we are launching Koleos in China.M. Prevost: Thank you. Koleos will be our second car, second SUV, at the end of the year. As you know we just launched Kajar, our CSUV and Koleos will be the second one, the DSUV and it is meaningful for all teams in China to have the world wide reveal by our Chairman today showing the importance of the Chinese market for Renault Group.Ghosn: Okay Seki San maybe on Chinese infrastructure.Seki San: Thank you very much. At first infrastructure was slow but it has improved dramatically. China compared with other mature markets, so many people are living in apartments or mansions so not so many dedicated car space, that is a worry but actually 60-70% of our customers have a charging spot in their mansions or apartments, this is much higher than our expectations so they are securing their charging by themselves and meanwhile government is very serious to update quick charger as well so this is improving so we are not so much worrying about infrastructure development in China. Towards 2020 it will be catch up with Japan I think.Q8: [In Chinese – on launching new cars]Ghosn: First obviously we have many products coming but we we're not ready to talk about them because what we want today is to sell the products we have. If we start talking about the products coming in the future somehow it always handicaps the sales of today. Tesla has not this problem because they launched Tesla Model 3 which is a completely new car so even though they announce it today and it will be selling one year and a half down the road, it is not replacing any existing product so there is no impact on that, okay. We have to be more careful because today we are selling electric cars and even though we want to continue to promote these cars I don't want you to think these are the only cars we are going to be launching on the market. There is going to be a lot of innovation coming from Nissan and Renault and we are intending to compete against all the other car makers on electric cars. So I don't want you to think that what you are seeing today is everything you are going to see from us, we are watching competition, we are measuring what they will be coming with and we will be more than happy to show you the capability in terms of electric cars coming from both Nissan and Renault.Q9: [In Chinese – on autonomous cars]Ghosn: I don't think Nissan has the intention to bring the first autonomous car in China but I can tell you that it will come very soon because obviously immediately when the technology will be available China being a very large market for Nissan, we are intending to bring this technology as soon as possible. We have a plan and we have already outlined the different steps to introduce autonomous drive. We are going to have cars coming in 2017, 2018, 2019 with different bricks of autonomous drive, ending up in 2020 which is what we call the real autonomous drive which is what we call the city drive. So we are going to start with one lane highway, multi lane highway and then city driving. So it is going to be a progressive technology and China is obviously top of our mind to introduce this technology. Now I cannot commit to you that the first cars in every step are going to be launched in China, we are going to be very pragmatic and launching the first significant cars can be in Japan, it can be in Europe, it can be in the United States and China also will be a major market for us to introduce this technology.Q10: Hello, Hans Dremel from Automotive News. I'd like you to talk a little bit about the split personality that we see in the China market here. That being at the show here we saw a lot of car makers talk about two things, SUVs and NEVs and they are almost at the opposite extremes of the market, kind of cancelling out the intentions of the other. Which of these two ways will win? The NEVs are being spurred by these government incentives, the SUVs are being spurred by actual market demand for people who want it, which of these is a safer bet long term?Ghosn: Well first you can have SUVs, which are EVs at the same time, just saying but we are not there, we're not there. SUV is a market driven sales, we are seeing the surge of SUVs and crossovers in China, we're seeing it in the United States, in Europe, everywhere crossovers and SUVs are contributing to the growth of the industry, okay. In our opinion this is a trend which is going to continue, particularly because the offer on crossover and SUV is becoming more and more competitive and more and more diversified which is going to stimulate this trend, so this is a market driven trend and car makers are going to continue to feed into this trend. That's number one.EVs for the moment are mainly supported by governments. Why are they supported by governments? Because the consumer is not ready to jump into EV as long as he sees the price is at best equivalent, he doesn't see infrastructure so most of the consumers say okay, I like the EV, it's very interesting but where am I going to charge the car and how long is it going to take to charge the car? Third, he is waiting for some kind of incentive coming from the government in order to jump in and incentive is not only about money, it is also about infrastructure. So without any doubt, EVs development are going to be driven by regulation, without any doubt. But hey, let me remind you of another market that was driven by regulation and by incentive – it was diesels in Europe. How come that Europe has more than 50 percent of its market in diesel when the United States has zero percent or Japan has zero percent? They are the same car makers by the way, they are the same car makers in the United States, in Europe and in Japan, same technology, same car maker, 50 percent of the European car market is diesel, zero percent practically of Japan and zero percent of the United States. Same car maker, what's the difference? Regulation, incentives, willingness of the government to weigh on one particular technology to the detriment of the other and I can tell you that on EVs government are going to have a lot of influence on the development of the EVs.So what I want to say is yes, you're right, SUV is mainly market driven, consumer driven. EVs are going to be heavily supported by government at the beginning but wait a second, when costs are going to go down, batteries are becoming more efficient and infrastructure is going to be stronger, we are going to see a surge of EV. Where is this surge? Well we've seen it in the orders, the huge orders that Tesla has been having. It looks like when you cross the 300 kilometres range and you go below $35,000 price and you have a sleek design, you start to be extremely interesting for the consumer but it has to have from the beginning strong support from the government.Hans Dremel: And will that government support continue amidst the concern about subsidy abuse, especially by the local EV makers here?Ghosn: I think frankly … I think personally yes, the support will continue because today the main preoccupation is about emissions and the main preoccupation is about CO2 and the main preoccupation is about global warming and if you want a radical solution to that you are going to have to support zero emissions.Q11: Hi Craig Shugel with Bloomberg News. You have an annual shareholders meeting coming up later this month at Renault.Ghosn: On Friday.Craig Shugel: Yes, it's been a year since there was significant development in the Alliance involving the French state in some changes late last year to help resolve that issue, could you provide us with an update as to how those three parties are satisfied with the deal that was reached late last year and given us an idea as to whether we should have any expectation that things have been resolved?Ghosn: You want to know whether you should come to the shareholder meeting or not?Craig Shugel: Am I invited?Ghosn: Don't come, it's going to be boring! It's going to be boring, why? Because we reached a stability agreement in December as you know between all the parties and since we reached the stability agreement you didn't hear anything which means that all the parties at the end of the day found a common denominator that satisfies all the parties. So if you are looking for a general shareholder assembly to participate because you have some scoop, I don't think you are going to be satisfied with the Renault one.Q12: [In Chinese – Nissan performance in China]Ghosn: We have with us the Head of the Chinese Operations, Seki San, who will be able to explain to you Nissan performance in China.Seki San: Thank you for your questions. First, we are still ahead of Toyota and Hyundai as a competitor, we are number one brand in China. We sold 1.25 million last year and the biggest subsidy under DFL is DFLPB, they sold 1.02 million. Both are highest record ever but you are right, compared with gross percentage of our competitors we are a little bit shy. Primary reason one, we have LCVs which is not growing, that is currently a handicap but LCV market will be stabilised soon so that needs to come following in but at this moment it's right. Second, current volume gross is mainly coming from new cars and then last year we introduced new car but it was late. From now on probably we will support our growth very quickly so please look at and watch us and we will grow, catch up.Q13: Nori from Reuters. Follow up questions on the EV market here, one, do you feel a little bit vindicated by this whole China push, the growth that's happening here? There is a lot of demand for EV it seems like and this is going to … You said that you are going to focus, start developing low spec affordable EVs but at the same cars like Leaf and I guess you call it Venucia over here, that's going to also probably be propped up by this demand. I just want to know how you see sales, can you talk about the market here? Last year I think was like 300,000 units, what do you see happening here and when is this low spec EV coming?Ghosn: As a business person I cannot be satisfied or vindicated because people are following a concept, we need sales and profit to make sure that the concept is right. For the moment in China we have neither sales nor profit on electric cars which still have a big interrogation mark about what we're doing, okay. Now when we look at the 300,000 cars, EVs sold in China, some of them are profitable, others are not. Most of them are sold to fleet or administration, not so many to private consumers or to individuals so we have to be extremely careful about who is buying these cars, what is the economic balance of this, before we establish our strategy. Today the Venucia is not selling and it's not selling because it's not a good electric car, it's because it's too expensive, it's clear, a clear signal. So we need to work on this, that's number one. We have this technology, it's present in China, we need to reduce the costs, we're working on it but at the same time we know there is another demand popping up which is a very cheap EV but low spec, which is a completely different car. So we need also to compete in this segment which, by the way, low spec EV is not only a speciality of the Chinese market, we think that there is a market for this low spec EV globally and particularly in emerging markets. We think that a low spec EV developed in China can interest India, can interest many other developing markets. That's why we are paying attention to this, this is not something specific to China, this is something which can become part of a global demand. So yes, we are vindicated in the term that we have seen EV and EV is coming but at the same time we are a little bit frustrated because for the moment we are not seeing the return on this, particularly in the Chinese market, because we're not selling too many units.Q14: [In Japanese – about Mitsubishi]Ghosn: So what did I do when I learned about this? Obviously I called to my chief engineer and asked him, what's going on? That's my reaction and he explained to me what was going on etc, etc, that's it. Second, does it erode the credibility of the Nissan brand? I don't think so, I think first we need to understand what went and we already talked to our customers buying the K car made by Mitsubishi under the Nissan brand to tell them whatever decision will be made, we will stand by our customers, that is what they are expecting of us, to say that we stand by our customer because this is the Nissan brand on the product and whatever decision will be made, we will make sure that our customer is happy.Q15: Hello, I am Donny Fuentes from Barcelona, Periodico from Barcelona. I want to know your opinion about the reaction in Europe and USA and Japan about the emission controls and do you think some governments are overreacting now?Ghosn: That's an interesting way to put the question! I think today there is a mixture of many different kinds of problems. There is one extremely important problem and one extremely important question is does a car manufacturer cheat? Okay, that's the most important one, are we cheating. Whatever I'm concerned about Renault or about Nissan, it has been very clear that we have absolutely no device showing that we have in any way, at any level cheated. That for me is the most important element, because that is where the trust of the public is, that's point number one.Then after this you have what we call the real driving performance in terms of emissions where there is a confusion in the public between okay, this car is homologated, it is homologated in the case of diesel with a certain level of NOX emission. How come that if I test the car in different conditions I can have three times, five times, ten times, twenty times more NOX than during homologation? That's the main question and the main question is today as you know absolutely no regulation on this and we welcome – and we said it many times – we welcome that there should be regulation on wheel driving emissions and as you know, the European Commission has decided on a new regulation on wheel driving emissions on Euro Six, starting in 2018.So it's coming because it's not up to car makers to say what is acceptable and what is not acceptable. It's up to the regulator to say this is acceptable and this is not acceptable and then after this I think the rules will be clearer. So today there is a little bit of confusion between different problems because people are putting what happened with [inaudible 40.35], what's happening with Mitsubishi, in the same bag. But no, there are different kinds of problems with different kinds of issues and we as car makers need to make sure there is no confusion in the mind of the consumer, even though it's hard because these are complicated issues, in order to maintain the trust which is necessary between us and the consumer. Now I have somebody with me who has been working day and night on this issue, which is Gaspar Gascon who is the Head of Engineering of Renault who has followed from the beginning.Gaspar Gascon: Thank you very much. As you probably know, due to this so-called diesel scandal that happened in September of 2015, the main European governments decided their own initiatives to perform some kind of test with only one intention is to know if there is someone else that was cheating and these tests has now been performed, most of them, and I think you are aware that two weeks ago the French government released the results of the test in a kind of single report and last week on Thursday and Friday it was the UK authorities and the German authorities. In the three reports it mentioned very clearly, as Mr. Ghosn says, that no one else was cheating, just the one that you know. The second topic of course that this report shows is that all the cars, when you try to test them in so-called simulation of real driving conditions, emit more than the value than in their evaluation. That is not a surprise, frankly speaking, it was not a surprise for anybody so according to that of course, all the governments as you see, they are overreacting and probably they are trying to say car makers have to do something for that. We say let's change the regulations and we are happy to do that and to be closer to the reality than in the tests that are ageing, thirty years old. So we are happy with that.As you know as well we have announced, because we are quite responsible on that, we have announced that maybe there are some potential contra-emissions that we can implement quite quickly in order to mitigate in some way the real emissions, the emission of NOX in real conditions and this is what we have announced in April 5. And in parallel, as you know as well, we are developing a new generation of diesel engines that are intended to emit the future regulations that I hope very soon will be fully functioning, it is not the case right now.We are out of time. We are going to have to close now. Thank you very much Mr. Ghosn and thank you everyone for participating. Nissan at Auto China 2016: Full Press Conference More from Auto China 2016:Venucia debuts T90 at Auto China 2016Nissan further strengthens its model line-up for young Chinese consumers at Auto China 2016Remarks from Daniele Schillaci at Auto China 2016Daring Infiniti QX Sport Inspiration concept unveiled in Beijing # # #

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