‘It’s important to learn from failures, particularly in India’

It is all well known now that it was Carlos Ghosn who first doffed his hat to Ratan Tata for making the Nano a reality a decade ago. The Chairman of Renault-Nissan (who now has Mitsubishi as his latest responsibility) drove home the point again during a media roundtable at the Geneva Motor Show.

“I was perhaps the first and only one to say about Ratan Tata that he was a visionary in launching the Nano,” said Ghosn at the Q&A session. As he added, Renault was inspired by the people’s car and the French carmaker’s “success in India today is mainly due to the Kwid”.

It is from this platform that Nissan will roll out a car and hope to emulate its ally’s good showing in the near future. Going forward, the alliance hopes to keep the momentum going in the world’s most price-sensitive market.

In fact, prior to the Kwid becoming a reality, Ghosn had initiated an alliance with Bajaj Auto to go in for the ULC (ultra low-cost car) project. The trigger clearly was the Nano and the ULC was tipped to be priced under ₹2 lakh. There were a host of discussions between Renault and Bajaj even while the entire project was shrouded in secrecy.

The partners eventually went their own ways in pursuing their individual plans. Renault’s focus on frugal engineering resulted in the Kwid, which definitely was pricier than the Nano but still competitive enough to give the Maruti Alto a run for its money. Bajaj developed the RE60 quadricycle, which is now exported as the Qute but still awaiting its India debut.

While Kwid clearly has been an outstanding success story that has also catapulted India to the league of Renault’s top 10 global markets, Ghosn was candid enough to admit that the Datsun low-cost story did not quite follow the same route. “We are not as successful with Datsun as we would like it to be without any doubt. But this is a long-term strategy and we don’t think success will come immediately,” he said.

In his view, the key was to keep trying harder especially in markets like India where making profits take time. Datsun has also been earmarked for Indonesia, Russia and South Africa with efforts now to spread its presence in the Asean region. “We have to keep trying and the success of Renault today as the top European brand in India follows many failures,” said Ghosn.

For instance, the initial outing with Mahindra & Mahindra for the Logan did not work but imported useful lessons on the imperatives of local development while thinking global. “When we started with the Logan, it did not work and we said we were learning our way,” he said.

The next step was to ready an intellectual base in India in terms of local R&D and engineering talent that would support product development of the Renault-Nissan alliance in Chennai.

It was a huge jump from a one-product business plan like Logan and Renault’s first big success story. The Duster followed it and now by the Kwid on a larger mass scale.

“Nobody succeeds in new markets immediately. It is important to learn from failures, accept them and try again many times particularly in India, which is complicated and competitive,” said Ghosn. This also puts in context why he believes in the Datsun brand even if the initial response has been little to write home about.

The next big task on hand is to optimise the synergies accruing from Nissan’s recent stake acquisition in Mitsubishi, which was gasping for survival. It was Ghosn who staged the miraculous turnaround story for Nissan when it was bought out by Renault over 17 years ago.

He will be hoping to replicate the feat in Mitsubishi in a global landscape that has changed dramatically since then with a new set of challenges arising from rapid urbanisation and new mobility options.

Mitsubishi, of course, has little to show in India despite its long years with the CK Birla group as part of a technical tie-up. It’s the same plant in Chennai, which will now be home to PSA. Mitsubishi and PSA were contemplating a global alliance many years ago but nothing really emerged eventually. It is therefore very likely that Mitsubishi will be given a new lease of life in India though the immediate priority would be to strengthen its presence in the far more viable Asean region.

Ghosn was also categorical that a global Numero Uno status was not his group’s priority even as it finished third in 2016 with 9.96 million units behind Volkswagen and Toyota. Being right on top was not the objective but the more important thing was to ensure that nobody had an advantage over Renault-Nissan in terms of sales.

The bottomline was that the alliance did sales of nearly 10 million units last year even though “our friends from Mitsubishi” did not deliver a spectacular performance where their numbers were down by 100,000 units. And while Ghosn conceded that the top player slot was good for employee motivation, it did not directly affect business and was therefore not very significant.