Ghosn explains why Renault-Nissan needs to be among top 3 automakers

Ghosn: Renault-Nissan "not yet among the world's largest carmakers but not far away."
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PARIS -- Renault-Nissan CEO Carlos Ghosn elaborated on his goal to make the French-Japanese alliance one of the world's top three vehicle producers, saying automakers nowadays must achieve economies of scale to remain competitive.

A fundamental shift has occurred in the industry, Ghosn said. "Fifteen years ago, the largest carmakers were not necessarily the most competitive. It is now increasingly difficult for small players to remain competitive," he said.

The top global automakers today are also the largest, Ghosn told journalists at a press event here earlier this month.

Automakers today fall under two categories: "Those that have achieved economies of scale and those that have not," he said, adding that Renault-Nissan "is not yet among the world's largest carmakers, but we are not far away."

Ghosn said that while Renault-Nissan is "not obsessed" about increasing volumes the company must continue to do what is necessary so that it can "increasingly take advantage of economies of scale."

Establishing local production worldwide is critical, Ghosn said. Producing cars for export to other markets has become a "thing of the past," he said.

"Carmakers without local production will remain small," Ghosn said, noting that more than 95 percent of all cars sold in China, India and Brazil are built locally.

Ghosn told shareholders at Renault's annual meeting in April that his midterm to long-term objective is to "install Renault-Nissan as one of the top three global automakers."

The alliance is No. 4, but has a long way to go to catch the leaders. Renault-Nissan sold 8.3 million units last year, compared with Toyota's 9.98 million, Volkswagen Group's 9.73 million and General Motors' 9.71 million.

You can reach Bruce Gain at bgain@crain.com.

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