The Vision of Intelligent MobilityFri, 09/01/2017 - 12:45
Q: Mexico is Nissan’s fourth most important market globally. How will the company maintain its growth here?
A: After eight consecutive years of being the leading brand in Mexico and with a market share of 25 percent during our 2016 fiscal year, our goal is to continue with our winning formula. Our latest target is to surpass the 406,995 units sold in FY16, which is a record in itself because no other brand has managed to sell that many vehicles in Mexico in a single fiscal year. Nissan’s innovative approach has been one of the pillars of the company’s success, with a strong vehicle portfolio that allows it to participate in almost all market segments. Our manufacturing operations have also helped to strengthen our presence in the country and to offer competitive prices to our clients. We now have two plants in Aguascalientes, another in Morelos and we will open our fourth plant, also in Aguascalientes, by the end of 2017.
Our financing arm, NR Finance, has been key to growing our market share in Mexico, reaching demographics that we could not service otherwise. Our distribution network has also grown to more than 230 points of sale and we are now transforming the image of our dealerships with the implementation of the Nissan NREDI 2.1 global standard across our Mexican network. The goal of NREDI 2.1 is to create attractive dealerships with more open spaces that foster enjoyable interaction between our customers and our vehicles. All the information they need will be at hand. Dealerships will be much more modern and technology will be the basis for all our operations. This is an international effort and the first NREDI 2.1 dealership in the world was inaugurated in May 2017 in Playa del Carmen.
Q: How will Nissan’s recent acquisition of 34 percent of Mitsubishi's stock boost the company’s position in the global market?
A: Mexico has not yet defined a new model for how Nissan's, or even Mitsubishi’s, operations will change but globally this acquisition will only strengthen the alliance between Renault-Nissan and now Mitsubishi. After we acquired 34 percent of Mitsubishi’s stock, the alliance became the third most-important automotive group in the world. The alliance sold over 10 million vehicles around the world during the first half of 2017. The three companies complement each other and I think the best of this venture is yet to come. We still need to define how each company will take advantage of the others’ manufacturing infrastructure, supply chain, distribution network and technology. Negotiations on how the new alliance will impact each country are ongoing but Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, says the addition of Mitsubishi could transform the alliance into the most important automotive group in the world
Q: What role does Mexico play in Nissan’s global manufacturing footprint?
A: We manufacture a new vehicle in Mexico every 34 seconds and our production line in the Aguascalientes’ A1 plant is flexible enough to incorporate five different models in the future. Mexican manufacturing has become a corporate standard for our global operations, having attracted US$5 billion in investment from Nissan since 2007.
Aguascalientes was the first location to manufacture the Nissan Kicks crossover with an investment of US$150 million. Since this model was the official vehicle of the Rio Olympic Games of 2016, the first batch produced was sent to Brazil. Subsequently, production went to our local distributors. The Nissan Kicks allowed us to compete in a market segment that we had not explored in our 53 years in Mexico. Now we can proudly say that so far, in the current 2017 calendar year 2017, we are leaders in the small crossover segment as well.
Q: To what extent are Mexicans participating in Nissan’s R&D efforts?
A: Mexico led the Kicks' production and the vehicle’s design was a collaboration between Nissan’s R&D centers in Rio de Janeiro in Brazil, San Diego in the US and Atsugi in Japan.
These three centers brought their vision to Mexico and our local engineers were responsible for ensuring the vehicle’s quality and implementing all the necessary modifications and improvements to the original design.
Mexican talent has been a decisive factor in elevating the quality of our manufacturing operations. The country’s challenge will be to generate enough talent to support the production of 4.9 million vehicles by 2020, 1 million of which will be produced by Nissan. With the Nissan University program in Aguascalientes, the company can also help develop this talent and generate new opportunities, both for the company and the country. Our university has become an aspirational institution because it helps students develop the necessary practical knowledge to fill jobs at Nissan and its partners.
Q: How is Nissan transforming its value proposition to incorporate global automotive trends?
A: The Nissan Tsuru was a flagship model for Nissan in Mexico. We manufactured a total of 2.4 million Tsuru vehicles until production stopped in May 2017. Its sustained success was thanks to it representing a reliable and affordable mobility solution for the Mexican population. But after three decades, we decided it had accomplished its mission. We hope to satisfy consumers with the entry versions of the Versa, March and Tiida models.
Nissan is now moving on to a new era driven by Intelligent Mobility. Terminating the production of Tsuru was the first step we took into this new era. We sold 1,000 units of a commemorative edition and followed with the launch of the new Nissan GT-R in May 2017, when we formalized our promise to the public to provide innovation and exciting driving experiences.
Our new mission is to revolutionize mobility globally through three principles. The first, Intelligent Driving, will focus on how to incorporate new technologies to make driving much more efficient and eventually autonomous. Intelligent Power, the second cornerstone of our new initiative, will guide Nissan on the use of alternativeenergy sources. Finally, Intelligent Integration will create connectivity between vehicles, the Cloud and road infrastructure. These three branches of Intelligent Mobility are the key to reaching our Double Zero target of zero emissions and zero road fatalities.
Q: How important is the electric and hybrid vehicle market for the brand’s operations in Mexico?
A: Nissan was one of the pioneers in the electric vehicle market. When we decided to launch the LEAF in Mexico, here was no charging infrastructure available. We could not wait for the government to start developing this market so we invested our own resources in the country’s charging infrastructure and launched the first electric vehicle. Nissan LEAF became the first EV to be launched in Mexico and the country’s best seller, with more than 270 units sold to date.
To this day, Nissan has the largest charging network with over 230 charging points across the country. If we include the public infrastructure we developed alongside the government, universities and parking spaces, more than 170 charging points add to those 230 chargers throughout our dealership network.
Although the electric and hybrid vehicle market is growing of its own accord, most efforts have come from OEMs and the private sector. The government needs to develop state incentives to boost sales.
Q: What opportunity does Nissan see to participate in the growth of on-demand driver services such as Uber and Cabify?
A: These services are already important to the brand. We foresaw an opportunity to create a specialized product with our financing arm that targeted these clients. This led to the Versa becoming the preferred vehicle for services like Uber and Cabify. Nissan has built strategic alliances with these companies and we signed more than 25,000 contracts through NR Finance’s Private Driver Program in the fiscal year 2016. Approximately 95 percent of all financed vehicles for on-demand driver services were Versa models. We are optimistic about growth in the on-demand driver market, especially considering the room these platforms have for development in Mexico.
THE NEW MEMBER OF THE ALLIANCE
The Renault-Nissan Alliance acquired 34 percent of Mitsubishi in 2016 for US$2.3 billion. With this acquisition, the Alliance became the third most important automotive group in the world. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance and CEO of Renault and Nissan has now left the latter's leadership to Hiroto Saikawa to become Chairman and CEO of Mitsubishi and help the company get back on a growing track. The plan is for Mitsubishi to lean on the technological and financial backbone of Renault-Nissan to boost its operations.