Industryweek 12545 Nissan 1

Nissan to Focus on Cost, Tech -- Says Policy Beyond Its Control

Dec. 8, 2016
“The regulations are not in our control, but what is in our control is that we stay competitive cost-wise, technology-wise, product-wise,” Rakesh Kochhar, Nissan’s senior vice president.

Nissan Motor Co., (IW 1000/25) the automaker that’s become symbolic of what it means to be a truly global manufacturer, has a simple plan to navigate an unprecedented level of uncertainty around policy and regulation: focus on what’s in its control.

“The regulations are not in our control, but what is in our control is that we stay competitive cost-wise, technology-wise, product-wise,” Rakesh Kochhar, Nissan’s senior vice president of global treasury and sales finance, said on Dec. 8 at the Bloomberg Asean Business Summit in Hanoi.

The global head of Nissan’s $90 billion automotive finance business said he’s confident the Yokohama, Japan-based carmaker will be able to work with any administration in a constructive manner.

Global carmakers have long benefited from open borders with everything from shipping cars to assembling them occurring across markets worldwide. That’s now under scrutiny following the election of Donald Trump, who campaigned on a promise to toughen America’s trade stance with Mexico and Japan. The president-elect has threatened a 35% tariff on any vehicles Ford Motor Co. builds in Mexico and ships back to the U.S., a levy carmakers fear he’d apply industrywide.

While Nissan wasn’t singled out on the campaign trail, the automaker is the largest producer in Mexico, and is growing. It started building cars in the country 50 years ago and produced 830,000 vehicles last year. The automaker offers products and services in more than 100 countries.

CEO Carlos Ghosn has brokered a deal with Daimler AG to jointly produce Infiniti and Mercedes luxury cars from a new Mexico plant scheduled to begin production next year.

‘Trump Factor’

“The Trump factor could have a pretty big impact on the overall auto industry around the world,” Richard Hanna, who heads PwC’s automotive practice, said at a briefing on Dec. 8. in Beijing. “If you look at the global industries around the world, the automobile industry is probably the most global industry there is.”

Nissan in October completed the acquisition of a $2.3 billion stake in Mitsubishi Motors Corp., which admitted months earlier to improperly measuring fuel economy and manipulating test data. Ghosn, who’s also the CEO of French automaker Renault SA, will take over as chairman of scandal-plagued Mitsubishi Motors in a bid to turn around a third major car company.

Mitsubishi Motors and Nissan have agreed to share plug-in hybrid and autonomous-driving technology and a multipurpose vehicle model for markets in Southeast Asia. The largest opportunity for synergies will be in joint purchasing, Kochhar said.

Nissan has sales finance operations in Thailand, Indonesia and Australia, a business Mitsubishi Motors lacks in Southeast Asia.

“This is where we can help them, in financing their dealers, financing their retail customers and that will also help build a market in the region,” Kochhar said in an interview with Bloomberg Television.

By Jacqueline Simmons and Ma Jie

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