Carlos Ghosn, Chairman and CEO of French automaker Groupe Renault, Chairman of Japanese firm Nissan Motor Co Ltd, and also Chairman of Mitsubishi Motors Corp speaks to exclusively to Autocar India on the Kwid’s success, his plans to bring Mitsubishi to India and the vision of Ratan Tata.
You have kind of relinquished your position as CEO in Nissan and are going to focus on the Renault-Nissan Alliance which Mitsubishi is now a part of. Let’s take India. Mitsubishi’s problem was, there was no scale, no investment and no appropriate product. Suddenly these hurdles aren’t hurdles anymore because of the benefits of the alliance. Will it be logical to assume that with the Alliance, there’s a big market out there for Mitsubishi to tap?
Without any doubt because, in India the most important step and our key to success – not sufficient but necessary – is the product. If you don’t have the product, you better not try your chance in India. It takes a lot of time to find a product. With the A-platform (the small car platform of the Common Module Family, or CMF jointly developed by Renault and Nissan, a sort of modular manufacturing system for cars) in particular, the Kwid and all the products that will follow, we think we have found our entry-level (car) in the Indian market. But this is an alliance platform. Today you have a Renault product; tomorrow you will have a Nissan product. This platform will be open to Mitsubishi.
So, Mitsubishi could use it and you could go all the way up and bring the Lancer back, for example?
Yes, but Mitsubishi has so many opportunities to grow that its management will have to prioritise what they are going to do first, second and third. I cannot tell you in what timeframe this will happen, but undoubtedly this is a very big market for the future for any carmaker and for Mitsubishi in particular.
What you are confirming is that it’s not a question of if but a question of when Mitsubishi will come to India with all guns blazing?
We are not limited to the short term; it is going to obviously mean mid or long term. Everybody (expects) India to be in the top 3-4 markets in the future. So, you can expect that what happened in China, where all the carmakers are present, is going to happen in India, with the exception that the Indian market is very tough for the foreign carmaker because of the specificity of the product and the market.
Do you have an edge with the Kwid? It is doing well and has already got a lot of deal-making features like the SUVish design and touchscreen.
Yes, we do. And we are improving and listening to what the customers are saying in India. This is not only to improve our offer for the Kwid in India but also to improve our offer for the Kwid outside because you know a version of the Kwid is going to be launched in Brazil as a second step of the A platform. For the Indian market, this is very important because it is very competitive, and if you are going to make it in India, you are going to make it in many emerging markets as well. That’s why, for us, testing and being successful in India and having a very strong acceptance of the product – a very competitive product in India – is a guarantee that these will do well in other markets.
Are you making money in India? Have you reached a volume that is a tipping point?
We are starting to make money now after selling 100,000 Kwids. We struggled at the beginning because it was a new plant and a new car. When you have so much innovation accommodated, you struggle with profitability. When you are going to a new, emerging market with a new product, you have to be patient for your returns.
In the future, is the CMF-B (for cars slightly larger than those on the CMF-A platform) also expected?
Obviously the volume that you expect from a car based on that platform is not going to be very big, so it can be an additional product. But you can’t have a strategy on this platform.
Is there a lesson learnt by Nissan on the performance of its V platform (cars such as the Sunny and Micra did not do well in India) – which is, you fundamentally cannot bring a European platform into India because the cost is too high and the customers may not pay for it, so you have to have a tailored platform for emerging markets?
You can bring copy-and-paste platform and product but that has to be a niche product. Don’t expect big volumes coming out of it. If you want big volumes in India and to contribute to the core market as well, you will have to really tailor it, even the platform.
On the Renault strategy in India, you are selling around 10,000 vehicles every month and are the No.1 European carmaker in India. You’ve even rattled Suzuki. Were you expecting this level of success? Are you now confident of ramping up?
I think this is all due to the attractiveness of the product. We have a lot of improvements that we can make in terms of competitiveness of our plant because, if the plants are filled, we have a much better industrial performance. We are not there yet. Yes, after we have seen that the CMF-A and the CMF-A+ platforms are really adequately addressing the needs of the Indian market, we should be much more ambitious in terms of contribution.
You have mentioned in the past that Tata Motors’ Nano is really an inspiration for the Kwid. What are your thoughts on that and Ratan Tata’s vision for the Nano?
When Ratan came with the Nano, I congratulated him and he said I was the only one who congratulated him because a lot of people said it’s a bad idea. No, it’s a good idea. We came with the Kwid at the end of the day and the Kwid was inspired by the Nano.
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