Renault-Nissan boss urges global auto industry to embrace disruption

Renault-Nissan Alliance CEO Carlos Ghosn, who made the keynote speech at the New York International Show earlier this month, addressed the issue of disruption in the global auto industry and also competitors who promise a new approach to what a car can be.

According to Ghosn, “Much of this unease over potential disruption has resulted from the rapid emergence of new technologies and ‘mobility services’ – all of which are competing to establish a new vision of our industry's future. In addition, these technologies are developing at a speed unfamiliar to our industry.

“Whether we're talking about Autonomous Drive and connected vehicle technologies, ride-sharing services, or alternative propulsion technologies, the fact is, nobody in the industry knows for certain which will become mainstream. Companies can make some educated guesses and calculated bets – and we have – but in the end customers will decide which technologies and business plans will survive.”

Ghosn is of the view that the biggest questions revolve around how these potentially disruptive changes will come about: What regulatory roadblocks will emerge? What role will tech companies play? Which companies will succeed or fail in addressing the coming wave of change? And which will be able to move quickly and adapt in such a rapidly changing technological landscape?

The Renault-Nissan Alliance chief advised the global auto industry to embrace change. “Rather than fear the disruption, I believe our industry really has no choice but to embrace it. I expect the global auto industry to see more changes in the next five years than it has in the last 20. And those changes will bring tremendous opportunities for those companies with the skills and foresight to seize them.

“Rather than fear tech companies' interest, I see this new competition as healthy for our industry. We have a lot to learn from them, and they have much to learn from us, which is quite clear considering all the automotive talent they have been hiring.”

Bullish on electric vehicles

Ghosn, who is bullish on electric vehicles (EVs), also spoke on the auto industry’s long-term horizon. Using the Nissan Leaf, the world’s best-selling EV, as an example, he said that since 2012, the Renault-Nissan Alliance has sold over 300,000 EVs globally – not as much as expected, “but certainly a healthy start”.

He said, “More significantly, today nearly every major automaker has ambitious projects underway for new EVs and other zero-emissions vehicles. It's clear EVs are here to stay.”

Ghosn gave a number of reasons why he is bullish on the future of EVs. With an increasing number of countries asking their auto industries to invest more in zero-emissions transportation mainly to deal with the threat of climate change, electrification can be the lead response to that demand.

Enumerating the benefits beyond environmental regulations, he said “EVs just make sense. We have already seen within Nissan and Renault how the cost of EVs continues to go down as their economies of scale begin to inch closer to those enjoyed by the internal combustion engine.

EVs are also relatively simple machines: a battery and electric motors. They require far less service, no oil changes and they are extremely reliable. With battery technology improving and the charging infrastructure expanding in much of the world, we are nearing the turning point where EVs will become more of a mainstream option.”

The coming of Autonomous Drive

Ghosn also spoke about the emergence of autonomous drive vehicles. Reminiscing about his visit to Nissan's Silicon Valley R&D offices in California, he said he spent considerable time driving around the streets of Sunnyvale – hands-free and with his eyes off the road.

“Those cars will be far more connected than those on the road today. They will be a much more personal space, an extension of ourselves – just as smartphones are today. And the EV is the perfect platform for the future of Autonomous Drive and connected vehicle technology, which will, in turn, help accelerate the adoption of EVs.

The benefits of highly connected, Autonomous Drive cars are clear: They hold the promise of making driving far safer, less stressful, more efficient and more rewarding. And as we did with our EVs, the Alliance will aim these future cars at the heart of the mass market.”

“This is not a time for the conservative or the cautious. For those open to new ideas and new ways of doing things, the opportunities for our industry to grow and better serve society's needs has never been greater.

“The pending merger of new technologies and new business models means not only new business opportunities, but ultimately a more efficient and safer transportation system at a lower cost to society.

Three forces – electrification, Autonomous Drive and connectivity – are about to change our industry in ways we are only beginning to imagine.

To me, it feels like we're at the dawn of a new spring in the auto industry, and I'm excited to see how this new era unfolds.”