The grand scheme of Carlos Ghosn

Renault-Nissan CEO Carlos Ghosn has announced that he would install the alliance as one of the top three global automakers by 2020.
His vision counts on a rebound at Renault, where key products will be renewed over the next three years, as well as growth in markets such as China and Russia.
It seems that he managed to convince the alliance’s shareholders of his vision because they have renewed his mandate as CEO until 2018.
In order to achieve his dream, Ghosn will have to catch up with Toyota, GM and VW — and they all aim to produce 10 million vehicles annually.
The Renault-Nissan alliance grew its global sales by some two percent to 8.26 million cars last year.
This leaves a large margin considering that the top three are still growing fast, but analysts believe Ghosn may be able to realize his scheme by 2020.
One analyst said: “As a group, they will reach levels that will allow them to compete with the top three. But whether they break into the top three or not is not really a priority since what matters most is profits and not volumes.”
Ghosn would like to raise Renault from number 4 in Europe to second place after VW and as largest French automaker.
He counts on large Renault minivans such as the Espace which will be revealed at the Paris auto show next October.
Ghosn focuses also on growth markets such as China and Russia. In both countries Renault-Nissan alliance has joint ventures with local companies such as Dongfeng Motors in China and AvtoVAZ in Russia.
However, the alliance had to scale down its expectations about electric vehicles especially after rivals crashed the party and caught up with the Nissan early advantage.
BMW i3 has more potential because it aims at premium buyers who are the biggest electric vehicles’ customers and it also broke into the US market.
Other companies, such as Toyota, are dismissing electric vehicles and going for hybrids.
There is no magic in world ranking but the vital element is shareholders’ value.
If Ghosn can keep his profit margins intact for the alliance then any growth is good for the alliance regardless of whether he can catch the top three or not.
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Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]