Monday, 24 March 2008

Carlos Ghosn visits Tan Chong's new Nissan plant in Malaysia

The Malaysian media had a chance to get acquainted with Mr Carlos Ghosn, President and CEO of Nissan Motor Co. Ltd. recently at Tan Chong Motors Assemblies Plant in Serendah, Selangor. Built at a cost of RM230 million over a 47.3 acre site, it currently produces Nissan models like the Latio, new Grand Livina and the soon-to-be-launched Sylphy. The Serendah plant has been up and running in less than a year from end of construction. Plans are afoot for production to run a 2nd shift by September, thereby doubling up roll-off to 2,400 units a month.

The charismatic Carlos Ghosn was back in Malaysia after a period of seven years and was happy to note the progress of Nissan brand in our important market, in partnership with Tan Chong over the past 50 years, an alliance that dates back to the nation’s independence.

In January of this year, Nissan recorded the highest monthly sales in Malaysia since 1985, at 3093 units. To affirm this Carlos revealed, “And with over 10,000 bookings for our new Grand Livina, we can look forward for more growth to come”.

Ghosn in his speech thanked everyone involved with the Nissan brand in Malaysia, recognizing the achievements of all from the factory and offices through to sales and after-sales. The head of Nissan Motor Co. also reaffirmed Nissan’s commitment to Malaysia, of which there are four pillars:

1) Empathy to Malaysia as a nation since 1957, creation of strength from diversity.
2) Half-century of partnership with Tan Chong, from “Datsun” to Nissan through the generations.
3) Belief in the benefits of regional integration through initiatives such as ASEAN Free Trade Area (AFTA).
4) Commitment to Malaysian consumers. By offering the right product with the right design, high quality and value.

During the media Q&A session, Ghosn reiterated Nissan’s plan for ASEAN as an attractive and vibrant market place. Therefore, instead of a global one-for-all car, Nissan believes a common regional platform in tandem with fully localized production is more attuned to the automotive needs and desires of a certain locality. For example, Renault-Nissan will partner Bajaj in India to introduce a low-cost US$2,500 car by 2010.

In addition, Nissan also sees importance in the affordable and fuel efficient A- and B-segments of vehicles for ASEAN under AFTA. As always, Nissan has been and would still want to have a car in every class/segment, rather than cluster around just a few categories but its priorities are more on these two fast growing classes in emerging markets. A step further, emphasis will be more towards B-segment growth in markets like China, India, Middle East, Brazil and of course, ASEAN. Carlos has also cautioned that for the next fiscal year (April 2008 – April 2009), mature markets like the U.S., Europe and Japan will experience slower growth in view of the U.S. recession, economy contraction in Western Europe and slowdown in Japan. Last year, across the ASEAN region, Nissan saw growth of 25% in sales.

On plans for future sustainable mobility, Mr Ghosn has outlined the options of hybrid, electric, clean diesel and fuel cells vehicles in Nissan’s product range. He added it was premature and short-sighted to bank on any one of the above alternatives, given the different geopolitical and regulatory climate in every region, country or government. Carlos has pointed out for example, in Europe every one other vehicle sold is diesel powered while in both Japan and the U.S., oil burners hardly make up 1% of all passenger vehicles registered. Above it all, he is quite optimistic about electric cars, saying that its fully-electric vehicles will be sold in the U.S. by 2010, in Israel by 2011 and rest of the world by 2012.

To stay competitive and afloat in this age of ever-increasing costs, Nissan’s has always believe in the right product planning, strategy, technology and more importantly localization plan e.g. for ASEAN. This will also help hedge it against wide currency fluctuations as evident in the recent Japanese Yen strengthening versus U.S. greenback. Making this point, Mr Ghosn stressed “Localisation is the key to cost control, so as to be not so exposed to violent currencies fluctuations”.

On a related note, Mr Ghosn, Dato’ Tan and Dato’ Ang also revealed the new Nissan Sylphy to the media. During a media TV interview, I asked if the new R35 GT-R will be officially imported to Malaysia of which Dato’ Ang gave examples of CBUs new Murano, Qashqai and the likes possibly from Tan Chong in 2009. He, however was neither confirmatory nor committing on the supercar availability in Malaysia (not at least officially) - with the much essential after-sales support from ETCM - in the near to medium term.

For Nissan’s current fiscal financial year, 3.7 million cars have been shipped and this is attributed to its 6% of overall global automotive market share. Malaysian sales of Nissan vehicles currently stakes at 5% and Mr Carlos Ghosn is confident of rationalizing this to international level in Malaysia. Lamenting this, Dato Dr Ang Boon Beng, Edaran Tan Chong Motor Executive Director, is bullish on increasing Nissan’s local market share to 6% or even 7% – with its vision of strategic planning in products, technology and localization as evident from a tour of assembly lines of Grand Livina and Sylphy with its auto parts’ carts frame labeled “Return to Nissan Indonesia” and Return to Nissan Thailand”.

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