The ignominious exit of Carlos Ghosn from Nissan Motors is making international headlines at the moment, but I would like to focus on something a little different in this piece and then examine the fate of Mr Ghosn in that context.
We are all facing the effects of technological disruption in our lives and in the industries, we might be working in. It is all-pervasive and there is simply no getting away from the fact that technology, more than anything else in the world, is going to leave its lasting impact on us. As an advertising professional, I can see the changes disrupting the brand communications business from all sides because media, clients and consumers are all impacted by the changes, just the same.
The changes are also coming thick and fast. It is really a case of “here today, gone tomorrow” with technology. And just like in every other sector, policy-makers and regulators are behind the curve.
The automobile industry is not something we immediately think of when we consider digital technology or AI, but it is something that could change our lives in ways we haven’t even imagined. Let us just rewind a little and go on a journey of how cars have evolved in just the last decade or a little more.
If you recollect, it started with the wave of hybrid cars being produced by nearly every big car manufacturer in the world, led primarily by the Japanese, in the early 2000s. Toyota, most notably made waves with its hybrid, Prius. Hybrids soon went to plug-in hybrids and then we progressed to electric vehicles.
Just as we don’t think of automobiles when we think of digital technology, we don’t think of Japanese car-makers either, when we talk of the latest in automotive technology. I am not sure if it’s the Western media that fails to pick up these stories and report them, or if the Japanese companies aren’t doing a very good job of marketing their innovations. I suppose it’s a bit of both.
However, if we just look back at each progression in automobile technology, the Japanese companies are out there, up front, pioneering and spearheading innovations. And it is all done with a view to produce more environmentally friendly vehicles, to reduce emissions and our carbon wheelprint on this planet.
I have seen from my own experience, while working on Honda cars’ advertising in India, how focused they are on energy efficiency and environmentally friendly cars, more generally speaking. And, of course, I doubt many Americans would have forgotten how Japanese cars made huge inroads into the American car market, with their compact, economical, easy-to-run-and-maintain cars way back in the ’70s and ’80s.
In more recent years, Toyota produced the first hybrid, Prius, while Nissan produced the world’s first and best-selling all-electric vehicle, Nissan Leaf. When all the while, we think electric car and we think Tesla. Right, you might say, but Japan’s car manufacturers are still not known in the autonomous vehicle game, or in the mobility-as-a-service arena.
You will be surprised. I too thought that only the American auto and tech giants were into autonomous vehicle research and production, until I read up on what the Japanese companies were researching and creating in the new areas of technology.
Nissan has just unveiled its Invisible-to-Visible technology concept at CES 2019, which attempts to combine the real and virtual worlds for the ultimate connected car experience. It has also unveiled its Brain-to-Vehicle technology which is the world’s first system for real-time detection and analysis of brain activity related to driving (see video below).
In addition, Nissan is working on fully autonomous vehicles through its Seamless Autonomous Mobility (SAM) technology developed with NASA which partners in-vehicle AI with remote human support to help vehicles make decisions.
If we widen our search, we find that Toyota Motors showcased its concept i-ride at the 88th Geneva Motor Show (see video above). It has also developed the Toyota Guardian™ Autonomy, a technology unveiled again at CES 2019. Its envelope-control system mimics fighter-jets, blending best inputs from humans and machines. This, the company says on its website, will be available as standard equipment on all Toyota e-Palette platforms that the company will build for the MaaS (mobility as a service) market.
Honda Motors, for its part, plans to bring its new Urban EV concept to Europe in 2019. It has also conducted live demos of its Honda DreamDrive technology in the all-new 2019 Honda Passport edition at CES 2019. It is supposed to be the automotive industry’s first integrated driver and passenger infotainment, commerce, services and rewards dashboard within the vehicle environment (see video). Again, an innovation that takes us a step closer to the connected car experience when the Internet of Things becomes a full-fledged reality.
I think that it’s important to know all this, because much of the battle for technological supremacy – especially since our lives are going to be governed by AI – is not just between companies but between governments and nations. We can see that already in the fields of AI, telecommunications, and the internet. And quite paradoxically, while all the big automakers are global companies, the race is and will be both company and nation-specific.
Electric cars and battery manufacturing are already big business in China. And given China’s rapid ascent in the world of AI and the billions of dollars being poured into more research in this area, Chinese car-makers too are going to be a force to reckon with. It’s only a matter of when, not if.
Let us examine where European car-makers, especially Renault, stands in all this. We don’t hear very much of innovations from companies in this region. Not even Renault. And German car-making – the gold standard of luxury automobiles and high quality German engineering and technology – is mired in controversy over the emission scandal. Italian cars are all about luxury, power and style. True, they will all have to toe the line of electric and autonomous cars someday, but that day is in the very distant future.
Nissan’s troubles with Carlos Ghosn are worth examining against this backdrop. Many experts believe that it was essentially a tussle for power in the equations between Renault and Nissan in the global alliance that led to his fall from grace. In recent years, Nissan was providing most of the revenue and income growth and was still not in control when it came to the big decisions. According to The Economist, Nissan feared a merger type takeover by Renault since the latter has a controlling 43.4% stake in Nissan (remember, the French government has a 15% stake in Renault), while Nissan has only a non-voting 15% stake in Renault. They also believe that Ghosn’s exit could see the “re-Japanisation of Nissan”. There might be something to this, since Mitsubishi Motors (the third partner in the alliance) has also dismissed him from his position as Chairman.
Of course, it is worth remembering that it is Carlos Ghosn (called Le Cost Killer in company circles) who turned Nissan around and saved it from the debacle it faced in 1999. And all the company’s successes were launched under his watch.
The allegations of financial misconduct against Carlos Ghosn, while indefensible, are yet to be proven. I find it curious that it isn’t also the company’s responsibility to report the chief’s income to the authorities in Japan, as much as it is Mr Ghosn’s. And like this article from The Guardian says, Japanese companies are not known for very high standards of corporate governance. The Olympus-Michael Woodford episode of 2011 is still fresh in many people’s minds and corporate scandals are not new in Japan.
All this not only makes for troublesome reading, it is a sign of things to come in the automobile industry in my view. As companies compete in the race for the technology of the future and try to capture a larger share of the world’s pie (and possibly, greater consumer data), countries are also drawing protectionist barriers and trying to keep manufacturing at home.
Through these difficult times, one only hopes that decency in business will not retreat, and that globalization and free trade will continue to advance.