GENEVA – Japan was hurt more in 2011 by a volatile yen than by the earthquake-tsunami combination that stemmed auto-industry production for weeks, says Renault and Nissan CEO Carlos Ghosn.
Next week, Japan marks the bitter anniversary of the natural disasters. Reeling from crippled supply chains, Toyota withdrew its annual profit guidance in their wake, while Honda, also stricken by severe flooding that occurred later in Thailand, dropped its earnings forecasts.
Nissan fared better, even though it had operations in the earthquake zone. But both calamities “are in the past,” Ghosn tells journalists in a question and answer session here at the Geneva auto show.
“Japan has remarkably overcome the earthquake,” he adds. “If there is one drag on the Japanese economy today, it is not the earthquake. It is the yen.”
Seven months ago, Japan’s currency hit a postwar high against the dollar.
Not counting the human toll of the natural disasters, “the yen did more damage,” Ghosn says grimly.
Last year saw Japan’s economy shrink 2.3% in the fourth quarter, contributing to a full-year contraction of 0.9% as the island nation also recorded its first trade deficit in 31 years.
In a freewheeling discussion, the executive also sounds a warning about the alliance established last week between General Motors and France-based PSA Peugeot Citroen. Such partnerships are “hard to make work,” says Ghosn, who knows whereof he speaks.
Ghosn shepherded the 1999 merger of Renault and Nissan – a success today, he says, because the auto maker’s culture encourages autonomy while demanding “absolute respect” for disparate identities and brands.
Ghosn also was a key architect of the 2010 deal that merged strategically selected product programs at Renault and Nissan with some at Daimler. That alliance, he adds, is paying significant dividends in product development because the auto makers share research into new technology.
“Nobody can afford not to have technology,” Ghosn says.
Such consolidation will not continue without allowances for suppliers that stand to win contracts on high-volume programs. But those programs now are shrinking in number, he adds.
“Having a common platform only makes sense if you have common parts,” Ghosn says.
“That’s what we want. You don’t buy platforms, you buy parts.
“The platform consolidation is the basic condition,” he adds. “You don’t get the results until the platform communization turns into parts communization. This is where the money is.”
Ghosn warns that capacity reduction is needed in Europe. But it will not happen until circumstances deteriorate so much that one auto maker is forced to make the first move.
“The day it will start, everyone’s going to have to follow,” he says.
