Carlos Ghosn's next trick: Making Renault-Nissan No. 1
Mark Phelan, Detroit Free Press Mark Phelan
Ghosn’s style is to act quickly, but plan for the long term. He delegates broadly and sets clear, measurable goals.
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Detroit Free Press
Carlos Ghosn may get the last laugh after all.

Ten years ago, as the dynamic executive who created the Renault-Nissan alliance strove to execute a mega-merger with General Motors, I wrote after dinner with Ghosn in Paris that he looked like a man who saw his legacy slipping away from him.

Today, it’s hard to imagine things working out better than they have, for Ghosn, Renault-Nissan and the other automakers that have come into his orbit.

The merger with GM never happened, but Renault-Nissan finds itself on the cusp of becoming the world’s largest automaker by taking control of Mitsubishi, a deal that makes more sense and entails less risk than the longshot GM merger ever did.

► Related: Mitsubishi deal brings potential, plenty of headaches

Ghosn has shown himself to be the master of the distressed asset, buying troubled automakers for pennies on the dollar, whipping them into shape and forging a global giant. Incorporating troubled Mitsubishi into a colossus that already includes Renault, Nissan, Romanian Dacia, Russia’s Lada and Korean Samsung Motors.

You can make a good argument that none of those automakers would still exist if not for Ghosn. Under his leadership, they haven’t just survived — the existing Alliance members have reached new heights. History suggests that’ll be true for Mitsubishi, too, as the Alliance continues to grow.

► Nissan CEO Ghosn: Auto industry consolidation is here

Ghosn never seems to rest. But while there’s an element of sleight of hand to some executives’ constant pursuit of the next deal — Pay no attention to the failing business unit behind the curtain! Look at the shiny trinket I found today! — the result of Ghosn’s deal making has consistently been greater than the sum of its parts.

“He’s done a great job putting Renault and Nissan together and letting them retain distinct personalities,” IHS Automotive senior analyst Stephanie Brinley said. “He built the Alliance and stayed long enough to make it stable and productive.”

Ghosn’s style is to act quickly, but plan for the long term. Unlike leaders who pull all authority to themselves, he delegates broadly and gives his lieutenants clear, measurable goals.

Expect more of those clear targets later this year when Ghosn lays out details of his plan to incorporate Mitsubishi into the Alliance he created in 1998, when Renault rescued Nissan from bankruptcy.

Ghosn promises to announce a “massive” business plan shortly to maximize Mitsubishi’s impact.

Renault-Nissan was the world’s No. 4 automaker with 8,528,887 sales in 2015. Mitsubishi sold 1,048,838. The Alliance also claims to be No. 1 in global electric vehicle sales, with 306,197 through Aug. 31.

Simple addition will put the expanded Alliance within spitting distance of 10 million units and global sales leadership this year, but Ghosn clearly expects a multiplier effect from Mitsubishi’s strengths in the fast-growth areas of electric vehicles, minicars and SUVs.

“Being No. 1 has never been an objective, Ghosn said recently. “But I must admit it may come as a consequence of good strategy, good management and good development of all our brands.”

He also expects Mitsubishi’s capabilities to pay off for the Alliance in the U.S., where its sales are barely a rounding error, with 74,315 through September this year compared to 1,183,024 million for Nissan, according to Autodata.

Unlike some executives who style themselves as masters of the deal but lose the thread when it’s time to run their creations, Ghosn’s plans never shortchange vehicle development. In good times and bad, Renault-Nissan has maintained a steady flow of new vehicles and technical development. Ghosn remains mindful that the Alliance succeeds or fails based on the quality, technology and design of the vehicles it produces.

Striving to attain or achieve global sales leadership has looked more like a curse than a blessing in recent years. General Motors pursued leadership at the cost of profitability. Toyota’s race for the top led to engineering problems that included the uncontrolled acceleration disaster. Volkswagen’s quest dominance included environmental fraud on an unprecedented scale.

That may be why Ghosn speaks of sales leadership as a byproduct of running an automaker, not the ultimate goal.

“Whenever you cross the 10 million units you are in a very small circle of maybe one or two companies, and the difference is not so significant. What matters is not so much if you’re No. 1, No. 2 or No. 3, it’s that the size difference between you and whoever is No. 1 should be very small because if it’s very small that means nobody has an advantage of size on you.”