Nissan is a sprawling, successful car company, consistently profitable, capable of creativity and innovation and skilled at remaining profitable in the face of the most demanding crises – earthquakes, tsunamis, nuclear plant meltdowns and a financial crisis. At times, in fact, Nissan has shown a breathtaking willingness to take product risks with the air of a reckless swashbuckler. Exhibit A: the Nissan Leaf, the most successful electric vehicle in history (take that, Tesla).
But Nissan’s leadership seems exasperated.
Led by CEO Carlos Ghosn, the executives running Nissan seem frustrated by goodness that lacks greatness. That is, Japan’s second-largest car company is a good and has been stunningly consistent in growing sales, experimenting with new technologies and spinning up profits. But none of the senior brass at Nissan will be happy until their corporation is considered a great global auto maker.
That was the subtext running right through three days of Nissan Immersion Therapy at an event called “Nissan 360,” an hour’s drive from downtown Los Angeles at the former El Toro marine air base, where a test track and exhibition centre were created from rotting runways: we’re a good company and we will be a great one before the decade is out.
Great means growing global sales from the current 4.9 million a year to 7 million within just a few years. Great means Nissan’s under-achieving Infiniti brand is expected to grow sales of about 170,000 a year to 500,000 by the 2017-2018 time frame. Great means commanding an 8 per cent share of the global car market. Great means profit margins of 8 per cent on that global share.
Great also means being recognized and appreciated for what the company is capable of achieving. No one at Nissan has ever told me this outright, but I believe many within Nissan feel the brilliance and daring of the Leaf is under-appreciated. At this point, Nissan has about 75,000 Leafs worldwide, with production taking place in Japan, North America and Great Britain. The Leaf is a pure EV that is sold and serviced like a real car to real customers who enjoy a full warranty package. It’s a stunning achievement and a testimony to the courage of Nissan’s leadership.
Today, Nissan is working on putting technological innovations in its latest models that are useful, reliable and safe. For instance, we were taken for an “autonomous drive” in a Leaf that steers, brakes, turns and accelerates itself. A so-called “driverless” Leaf, and it worked seamlessly. On a temporary racetrack, we roared about in the latest high-performance Nissan GT-Rs. Nissan even showed off a broad array of commercial vehicles, including the latest New York taxicab based on the NV200 commercial rig.
And there was plenty of talk about electric vehicles. Executive vice-president Andy Palmer talked in general terms about the electric car, perhaps even a relatively affordable electric sports car, arguing that Nissan is committed to EVs. Palmer is a genial and chatty car nut who happens to be one of the two or three most powerful executives within the company – and as head of product development he certainly has a lot of say about the future of Nissan’s vehicles.
Pure electric vehicles, he said, are sensible from a performance perspective because you get “oodles of torque and power instantaneously. For a car that’s really fun to drive, then electric offers lots of opportunities.” As battery technology improves, range will become less of an issue, too. Pricing is already becoming less troubling. Case in point: recent price reductions for the Leaf.
Most of all, he seemed to take a forward-looking view of EVs – that they are critical for the future health of car companies like Nissan. At a reception, I followed up with Palmer on the quite interesting observations he’d earlier shared on EVs with drive.com.au. He’d talked about how his own kids had grown up in an education system in which the car is demonized as a polluting device. Cars are, in a word, “bad.”
So what’s a car company to do? I asked. The answer is to build environmentally friendly products; they will have greater appeal amongt so-called “Generation Y” buyers. Still, will buyers pay a price premium for a more environmentally friendly car? They may be willing to pay a small premium, but the key for car companies to be successful in this future is really quite simple: bring “green” cars to market at a price point that is more or less equal to conventional cars.
This is the long-term goal of the Leaf. Indeed, with today’s taxpayer subsidies, the entry-level Leaf in Canada is now available to buyers at a price in the low-$20,000s. As sales volumes rise – bringing efficiencies of scale – and as battery technology evolves, the price of a city-friendly Leaf should go down further and quite soon.
Of course, being the gearhead that he is, Palmer pointed to the possibilities of an electric sports car, too – one that would thrill enthusiasts. Electric vehicles have the potential to be wonderful racetrack performers, with “great handling, that lower centre of gravity, motors in all of the wheels,” he said. If you want to make a great sports car, there are worse places to start than with the basics of an EV.
Palmer’s thoughts on EV and how important they are to the future of not just Nissan, but all car companies, were refreshing and insightful. Yes, it was interesting to see how Nissan is celebrating its 80th anniversary by laying on a product extravaganza and test drive for more than 1,000 journos, investors, suppliers, analysts, suppliers and industry experts. But Palmer’s thoughts on EVs struck me as the most telling, the most interesting in terms of insights into the future of the car business, not just Nissan’s car business.
The point is, to be a great car company, not just a good one, Nissan needs to be a world leader in the sorts of “green” vehicles such as the Leaf and its ilk. Nissan has been around for 80 years, but the most telling in its future may be the next eight or less.
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