Carlos Ghosn – Auto Executive of the Year 2012 (I’m calling it early)

Carlos Ghosn Renault/Nissan

The more I’ve thought about this post, the more I’ve realised that no matter how I write it, it’s going to sound anti-American. That’s a shame, because I’m not anti-American at all.

My wife and I are actually in the beginning stages of planning a driving holiday there – sea to shining sea and all that kind of stuff. I’ve been to a few places in the US: felt ho-hum about LA and hated Detroit, but loved Seattle and Boston, and was completely awestruck after seeing only a minor glimpse of New York City.

So….. not Anti-American. Even if this post sounds like I am.

The automotive world is one that’s becoming smaller every year. That’s not in terms of sales, which keep expanding as developing nations become wealthier and demand more cars. It’s becoming smaller in terms of the convergence of companies through either sale or closure. It’s becoming smaller due to the fact that cars and car companies are becoming more and more alike through the pursuit of common fuel economy goals and adherence to common safety regulations.

It’s as if there’s a magic formula out there for The Car that will appeal to the most potential buyers and all car companies are pursuing that formula. Have you noticed how the basic shape of most sedans is the same these days? The only difference seems to be the face they draw on the front.

This is true of the global market in general terms, but it’s a concentrated truism in the world’s most established, mature, and cutthroat market – America. America’s one place I wouldn’t want to live as an automotive enthusiast. There are other places too, of course, but I don’t think I have to explain why I wouldn’t want to live in Afghanistan as an automotive enthusiast. America, however, does invite some explanation.

It’s not my distaste for American cars. There are a number of cars you can buy in the US that you can’t buy elsewhere, but aside from some of the stuff from Chrysler/Dodge, American vehicle styling just doesn’t appeal to me at all. So even though I’m not a fan, it’s not the cars that you can buy in America that make me glad I’m not an American car enthusiast. It’s the cars you can’t buy there.

Cars like the hot Ford Focus models. Any Alfa Romeos. Peugeots. Even the Dacia Duster and Skoda’s Yeti and RS vehicles have their merits and none of these can be bought in the US. There are a whole lot more, too. I’ve lost count of the number of times I’ve read stories on US-based automotive websites that include the words “of course, we can’t get it here……”

Why is this? Well, Americans have particular tastes in powertrains, ride comfort and most crucially, price. It’s the most cutthroat market in the world and I’ll go as far as to say that whilst the desire for companies to succeed in America has led to some vehicles becoming better in some respects, the need to maintain profitability has also led to some degradation of materials and quality, as a result. Bottom line, the American market is driven primarily by price and volume and if a company can’t achieve those, or chooses not to worry about them, then that company needs either great margins, or some very deep pockets behind them.

One of the brands that Americans can’t buy is Renault. I’m no Renault aficionado but I’m becoming more and more interested in their RenaultSport line of vehicles. As a Saab person, the idea of a slightly odd looking hatchback with a 2-litre turbocharged engine and class-leading handling is quite appealing, and the RenaultSport Megane from a few years back is deliciously close to my price bracket right now. It’s nowhere near as practical as an old Saab hatchback, but a Saaby friend of mine had one a year or so ago and still raves about the driving experience.

Carlos Ghosn is a rare CEO, regardless of industry. He’s actually the head of two quite distinct automotive companies – one French, the other Japanese. They own bits of one another and there’s all sorts of corporate incest going on there, but basically, Renault and Nissan have managed to combine their corporate and national cultures into a combined entity that allows them to rely on and cooperate with one another, and yet still maintain independent brand identities.

That’s one reason I like him.

The other is that he looks a little like how I’d imagine a modern day Napoleon. But that’s beside the point.

The reason I’m giving him the Swadeology Automotive Executive of the Year Award for 2012 – just two weeks or so into the year – is because he recently came out and said that Renault is not going to expand into America. Instead, Renault will focus their expansion efforts on developing markets, in particular the company’s introduction into China.

My interest in Renault is focused on their RenaultSport line of vehicles, comprising smaller vehicles finely tuned for bringing smiles on twisting, turning mountain passes and un-gridded city streets. These cars are about as un-American as you can get (check the video at the top-right of the page).

Renault, to me, is a European car made for European roads. It’s not particularly fancy in any way, but the cars do their job and carry their own certain je ne sais quoi whilst they do it. Some European car companies have adapted their cars for American life. They build them bigger, softer, more suited to the long and straight multi-lane highways that dominate there so much. And in order to be profitable in America, some manufacturers have to scale down on the materials or the sophistication of the vehicle. Compare Saab’s leathers in the 1980s to the last ten years. Or other interior trim parts, plastics, etc.

My experience from Saab tells me that a company selling in the American market sees itself subjected to a very large degree to what the company boss in the American market wants. Sometimes that can mean great things – the Saab 900 Convertible, for example. Other times, it can lead to a company setting aside some of its core traditions in the chase for the only thing that matters for most in the US auto market: volume.

The more a carmaker becomes dependent on higher volume instead of decent margins, the more that carmaker will de-content the vehicle.

I’ll freely admit that I’m an outsider when it comes to the US market and this is only my perspective. But the mainline car companies that are absent from the US market aren’t missing because they make bad cars. Renault is one of those companies, and they don’t make bad cars, either. In fact, their RenaultSport line is now ranked pretty consistently at the top of hot-hatch wishlists.

The decision by Ghosn to keep Renault on a steady course and preserve whatever DNA the company has is one that I applaud. And when you consider how easy it might be for him to piggyback an established Nissan dealership structure to reintroduce Renault in America, it’s even more cause for applause.

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17 Comments

  1. Well done , and sadly true about the lack of independent thinking in the U.S. market , ” car by concensenses ” . The Day of Harley Earl is gone . I do like Delahay , but it’s not in the budget . So I’ll just keep rebuilding what I have .

  2. Swade – you’re missing the big issue which keeps all the interesting cars out of the US, the cost of complying with a wholly separate set of safety and emissions regulations. The cost of getting low volume models certified in the US vastly exceeds the potential profits of the sales.

    1. Very true, Greg. It’s a significant piece of the puzzle.

      But better margins would encourage more to try and whilst I can understand compliance as a factor for small-run editions of Euro-spec vehicles (e.g. hot Focus editions) should it be the barrier that it is for entire companies?

    2. Not so much an issue with big players like Renault. Safety regs have caught-up in Europe, so their cars mostly comply already (and some of the same platforms are sold here under the Nissan badge).

      What keeps Renault out is their bad rep, mostly based on their 1970s and 1980s products. They and Fiat were almost as popular as VW in the 1960s.

      Ironically, Chrysler did great business with two Renault platforms that they inherited through AMC. Few Americans realize that the Jeep Cherokee and Chrysler 300M were based on French designs.

      There was a preliminary announcement of Citroen coming back to North America in the middle of the past decade, but that never panned-out. Too bad, I guess they were scared by the total collapse of the North American auto market after 2007.

  3. Well, perhaps M. Ghosen is telling a near truth. I think Renault is already in the US and Canadian markets with the small Nissans that are essentially reskinned Renaults, including a performance version of Nissan Sentra.

  4. If I can longer buy a SAAB product, I would choose CITROËN, specifically a C4 AIRCROSS. Of course being here in the U.S. it is not possible. Frustrating.
    .

  5. Hafta disagree with you here Mr Swade. Renault has tried, and failed spectacularly, to make it in the US market. Why? Because they made crap cars. They may be fine now, but boy… The Dauphine, Caravelle etc were hideous. Not only ugly, but their reliability rivaled that of a Yugo built on a Monday. The second round was better, but still… I had several friends and acquaintances that had LeCars, Fuegos and Alliances. Half of them raced the R5s and Fuegos in Showroom Stock. Most had factory/dealer support. One was pretty darn successful. But the cars were high on maintenance, and low on performance. I even sorta lost a really attractive girlfriend once because I tired of maintaining her LeCar. I was also acquainted personally with the local dealer, so the tales of unreliability are not merely anecdotal.
    But Renault is wise to stay out of the US. The cost versus potential reward equation is just too far out of kilter. They have virtually no name recognition here. Add to that a poor reputation amongst those that know who they are, and the likelihood of success is somewhat small. Given the costs of “federalising”, trying to set up a dealer network, [though I guess thay could piggyback in on Datsun dealers] and only the potential for a [very] small slice of an admittedly large pie, just doesnt make sense to try. Plus, they just dont make the types of cars that most Americans want or that are suited to our terrain to the best of my knowledge. Their decision is wise.

  6. I had a 57-plate Renault Megane 150bhp TDi GT on 24-hour test drive a few years back, cross country it was brilliant, fluid, supple across the bumpy British roads and with torque spilling out of my eyesockets. I loved it.

    Why didn’t I buy one? Couldn’t fit the golf clubs in the boot… I have a Saab 9-3 of the same age now, I like it but the weight stops it being as much fun on those kind of roads. Still it’s done 164k miles and rising without missing a beat so far…

  7. Interesting. As a former owner of a AMC Rambler American (not bought new), I looked at a Renault sedan when the company was Renault-AMC. May make me rethink about Nissan.

  8. Great piece, Swade!

    These days, companies will get more bang for their buck focusing on emerging markets instead of the U.S. market. This is where growth and profits will come from in the next decades, while the U.S. market will likely stagnate together with the economy. Even the American carmakers are chasing after emerging markets.

    And now that Saab is gone, there is really very little interesting left at the American and Canadian markets. Alfa is not here, and neither is Citroen. It’s making things rather tough from an enthusiast’s perspective — what would be my next car? I’d hate to be assimilated into another bland S4/335 driver, but until I can afford a 911 Turbo, there ain’t that many options.

    Ironically, the CVS-V is the most interesting vehicle in my price range. Comes with a stick, too, unlike Mercedes and Ovlov. Man, I already miss quirky little Saab. 🙁

    1. You nailed it Kroum. VERY little of interest here in the US market with Saab’s departure. Really nothing different or unusual except for, well, Nissans, like the Cube or Juke.

      I, too, am wondering what I will buy to supplement my Turbo-X in about 2 years (I’m never going to sell it, but it’ll be over 125,000 miles at that point, so, well, I’ll need something else). I too have been tracking CTS-V prices and am VERY interested in driving an ATS with AWD, manual, and a turbo-4. I’m, of course, looking forward to the likely ATS-V as well.

      As others point out, Swade, I think you don’t quite have your finger on the pulse of this issue here. Renault, Sterling (Rover), Peugeot, Fiat, Alfa, even Ford of Europe (remember the XR4Ti?) all flunked out of the US market because they had miserable and unreliable products here at a time that these makers probably deserved to go under and were only being propped up by nationalistic customers and government supports back home. Peugeot left the market in a huff in one of the great American PR disasters of all time, declaring that American customers obviously did not appreciate and thus deserve sophisticated French machinery.

      Also, as with many things in the US, there are many different “Americas.” To be an auto enthusiast living on the California coast, with some of the world’s best driving roads, is different from being an enthusiastic in Manhattan, which is different from being an enthusiast in the vast American midwest. In fact, I can understand why US buyers in the heartland only cared about buying living rooms on wheels, as they live in vast, flat lands with roads you can drive on for hours without seeing a turn or curve. Detroit is located in that area of the country and forgot from about 1965 to, well, 2008 that 75% of buyers in the rest of America (to say nothing of the world) had driving desires and conditions different from Michigan or Illinois. Thankfully, as evidenced by some of Ford’s, Chrysler’s, and Cadillac’s great products right now, they’ve woken up.

      And as to the volume push in the US market with low prices and poor material quality as a result, blame the Asians, whose well recognized tactic of dumping everything from Datsuns to Lexus luxury sedans in the US market from the 1960’s to, well, even now to capture market share created the rush to the pricing bottom. Do you think Audi wants to lose money on every A4 they sell here? But they recognize if they don’t, there’s no other way to compete with the subsidized price of an IS or a Infiniti M and they’d vanish from the market.

  9. By the way, here is the text of the famous Automobile Magazine parody of an ad trumpeting the fictional return of Peugeot to the US market:
    —————-
    WE FORGIVE ALL YOU BOURGEOIS PIGS.
    PEUGEOT
    It is not for us to hold a grudge-not even against ignorant swine. And so we come back to America, where you think your replacement starter should come as fast as your cherished McNuggets. A starter is not a McNugget. It is a creation wrenched from the mind of man. It is a symbol. It is Art.

    Sadly, you cannot understand such things. So this time, like the indulgent parent, we add features expressly designed for Americans. Your speed, it is shown by the Heads-Up Mime. Your angst, it is calmed by the five-year/50,000 mile ennui protection. The Peugeot-she is more than you deserve.

    PEUGEOT MORE THAN YOU DESERVE.

  10. Good post, Swade. I’ve been lusting for a Skoda Yeti after seeing one on Top Gear (so many lucious cars on that show that never come to the U.S.). I’m very happy with my 2007 Infiniti M45 Sport, however, and will happily tip my hat to Mr. Ghosn. If you come to America, may I recommend a drive along the Blue Ridge Parkway in the mountains of Virginia, with a visit to Mr. Jefferson’s house, Monticello?

  11. Nice post Swade. Historically my family has only ever really focused on 3 car brands to own, Saab of course, VW and Renault. Renault is actually one of the few brands that I am considering now that Saab appears to have departed. I’m very very interested in the Renault Mégane RS. Though thats a little out of my price range, the standard Mégane is still rather compelling though and is quite cheap. You can pick an ex-demo up in NSW for about $24,000 which for a European car is an absolute bargain.

  12. Nice article Swade. I’ll second your nomination.

    It’s all too true about cars all having the same shape with a different “face” on them and truly sad / depressing to me.

    I also think you are spot on about the perception / hope of a magic formula to build cars that appeal to more masses than any other, and yet they all seem too similar to me. I think of them as carved bars of soap with headlights.

    Soap simply doesn’t excite me THAT much.

    It would be nice if the U.S. market offered more independent choices though I am not holding my breath as it does not seem to be what those in charge think sells crs, and perhaps rightfully so in this market.

    Still, I’m hopeful Saab comes back and perhaps with more “Saaby” Saabs 🙂

    Nothing else really catches our interest in the U.S. market otherwise.

    Cheers,

    Steve

  13. Having driven an overall of four Renaults before switching to Saab, I can only advise you to do very, and I mean very, thorough evalations of every reliability statistics you can get, before deciding to buy a Renault. Not for new cars (they seem to have excellent quality management in their assembly plants), but those for ageing cars.

    Regarding the variability, I concur with you. The design gets completely globalised, not only in view of the US market, but also China and Russia. To me as a European, and evidently (and admittedly, boringly) rooted in the European culture and design tradition, it is getting more difficult to find a car design I like.

    It was with quite some surprise that I recognised that the 9000, 9-5 I and 9-5 II, provided with engines of identical power, all have the same top speed, despite improvements on the drag coefficient with every generation. The reason for this is the US market and the somewhat larger “personal distance” that Americans tend to have, so that they just feel uneasy being crowded in a rather shallow car, which resulted in the European car manufacturers widening the car bodies.

  14. Up until recently I would’ve disagreed with the Renault Mégane, but the newer model looks much better than the ugly older one. There’s quirky and then there’s just ugly–but to each their own. Still, I rather like the new Mégane.

    As far as the US market goes, I moreorless agree… but would argue there’s still a fair amount of diversity as far as car shapes and sizes go. The market here seems pretty saturated as it is, then coupled with all the extra regulations–I can understand why it wouldn’t be worth the effort for Renault, Citroen, Skoda, Peugeot and Alfa (and the others I’m forgetting). It’s a real shame because I’ve been a fan of a few of them, here and there… But it just wouldn’t be worth the effort to try and break in, even trying to fill the void left by Saab.

    Here in Los Angeles, there are alternatively fueled vehicle brands popping up: Tesla, Fisker, and Coda. It’ll be interesting to see if they can survive. Hopefully!

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