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April 15, 2006

Ghosn Gets It

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During the same speech Carlos Ghosn delivered at the New York International Auto Show where he derided automakers for their reliance on discounts to drive sales, Ghosn challenged automakers to reinvigorate their businesses with passion. Ghosn believes passion, not rebates, will revitalize the auto industry.

Ghosn compared the auto industry’s current malaise
to where Apple Computer was in the nineties. He said automakers should look to Apple and how its resurgence has been a result of an uncompromising focus on design. Ghosn wants automakers to become more passionate about the design of new cars and trucks and that passion will help reinvigorate the auto industry.

According to Ghosn
, the reliance on discounts and rebates to sell cars has made the car buying process, “… less involving, less personal, and less emotional.”

Ghosen’s right on the money. Automakers must make the car buying process more involving, more personal, and more emotional. Just ask any Mini Cooper car owner and they will tell you just how involving, personal, and emotional their car buying process was.

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Comments

I like your quote of Ghosn about the industry's reliance on discounts and rebates to sell cars which makes the car buying process, “… less involving, less personal, and less emotional.”

Ghosen is being kind. In fact car buying is often very involving, personal and emotional the way being in a dysfunctional relationship is involving, personal, and emotional.

I always thought your "Circle of Discount Addiction" was a great way to state it.

I recently posted on the Scion xB for the same reasons you mention the Mini Cooper.

I like the sound of what he's saying, unfortunately, I don't think that's the reality. At his level, it's nice and sunny, down in the trenches, it gets muddy.

I used to work for Tequila, the interactive ad agency that serves Nissan. Every 3 months, on the dot, there was a sales event for Nissan. When they weren't in sales event mode, there was always an offer for every single vehicle, except the Z. Deals were undeniably a part of the strategy.

Ghosn does have a passion for the vehicles and does respect design but unfortunately they play the same game as everyone else.

Michael ... I also liked Carlos' “… less involving, less personal, and less emotional" sound-bite and wanted to lead the post with it. However, it was easier to work in the full quote about selling with passion and closing the blog with the “… less involving, less personal, and less emotional" kicker.

Ken ... so true, saying and doing are two different things. And no doubt, Ghosn is quilty of playing the discount game. My hope is that he starts doing what he's saying.

It may be true that Ghosn's company is guilty as well- I mean just look at Nissan's lines- there's nothing outstanding there, in my mind. The Altima and Maxima (flagships?) are generally aesthetically appealing (at least they don't drive you away), with nice internal componant amenities and an air of dependability at a good price- they are essentially great value offerings. The "Z" models are slightly improved, mildly inspired and poorly marketed, old-school stuff. The Titan is kind of cool, partly because the name invokes so much power. Overall I'd say it's a pretty drab lineup.

The Chrysler C300 is a great example of good design work though, in addition to the Mini (the Mini had excellent brand management to support). The new Mustang I thought was pretty inspired- us consumers love great nouveau vintage stuff right now (I would love to see a new style, gullwing Mercedes, if possible).

I'm constantly disappointed with the big car maker attempts with design. I usually see some sweet looking cars at trade shows, and then that car would get the axe before the season of their supposed release! I've seen that happen all too many times. Is it that hard to find a quality designer (look at a Lamborghini, ferrari, Aston Martin) where the high production run amortizes the cost of the designer with room to spare?

I know it's been beaten into the ground so much already, but if there's one industry that invokes the words "complacency and thinking within the box", auto industry is the one. I'm sure there are competent designers out there, so I'm also sure it's the innate structure of the auto industry that is holding itself back on most fronts.

I love Carlos Ghosn. Smart guy, and pulled off a turnaround at Nissan that many thought couldn't be done. He should be brought in to run GM, not that the incestuous Board of GM will do anything near that smart.

The auto biz may be the ultimate sales-units-driven industry, (with the possible exception of Ferrari & Porche, who intentionally undersell units in favor of increasing brand value; in Porsche's case at great profit). Sales-unit-focused companies always meets this price-tailspin/incentives fate, sooner or later. The auto biz is 30% oversupplying the markets. Shrinking forecasts intentionally is the only way to restore margins and profits, and any semblance of brand value, (for most of them). But of course nobody wants to be first in line to do this, so it will continue for a while.

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