Renault-Nissan Alliance say 14 Million Cars is not just a target but an inevitability


Renault-Nissan Alliance say 14 Million Cars is not just a target but an inevitability

The CEO of the Renault-Nissan Alliance, Carlos Ghosn, has said recently in Paris that he expects the group to sell more than 14 million cars a year by 2022!

The amazing thing about the prediction is that it is made even though there is an expected impending demise of the industry. Ghosn went on to say:
“14 million is not a target, it is not an objective,” Ghosn said, giving the impression that the number is more or less inevitable.”

“What I am telling you is what our assumptions are. Our forecast is that by the end of 2022, we should reach 14 million cars. We estimate that the total market by the end of 2022 will be between 108 and 110 million cars.”

Back in 2016, the global volume of cars manufactured was 95 million units and Ghosn obviously doesn’t believe the popular notion of peak car and also the arrival of Uber and self-driving pods disrupting the automotive industry.
“When you take a look at the total revenues from selling cars and the expected revenues of mobility services, even 6 years down the road it will be totally imbalanced,” Ghosn said.  “I don’t think that mobility services will represent a big portion of revenues, compared to selling cars, parts, accessories, servicing of cars etc.”

Industry experts would assert that Ghosn is usually right and on the money. If this is the case, then General Motors may have made a big mistake by entering into growth markets like India and Southeast Asia, to focus on safe markets, and investing in the ride-hail company Lyft.

According to Ghosn’s five-year plan, he believes there will be no growth from mature markets such as the U.S., Europe, and Japan but instead, expects all growth from markets General Motors has abandoned.

The Renault-Nissan Alliance has Russia’s largest car maker. In India, they also outsell all European and American OEMs. (Original Equipment Manufacturers)

The Alliance’s Mitsubishi is very strong is South East Asia. At the moment it is very fashionable to predict the imminent electrification of the automotive industry and even Renault and Nissan themselves have been early pioneers of electric cars.

When it comes to Electric Vehicles, Ghosn likes to mention that, “the Alliance is not a leader in share of voice, but certainly in share of market.”

There are approximately 1.4 million EVs on the world’s roads and one third of those have been made by the Renault-Nissan Alliance partners.

By 2022, Ghosn thinks the Alliance might do 30% of its business with EVs, (Electric Vehicles) and he has been quick to mention that this is not a goal, but an assumption. The CEO of the Alliance believes that customers will have to be forced by governments to abandon the internal combustion engine.

In other words, the development and adoption of EV technologies by the public will depend on pressure from above, as it were, through Government legislation and that it will happen mostly in mature markets.

Much to the surprise of many observers, the Alliance became the world’s largest automaker in the first half of 2017. This occurred with the aid of Mitsubishi Motors, which became a member of the Alliance in 2016.

With the addition of another partner, the 14 million mark could very well be crossed rather quickly.

Asked whether the doors are open to more partners, Ghosn answered:
“Oh yeah, without any doubt. The logic of the Alliance is to have other members join. Do we need more? No. But if there is an opportunity, we will take it.”

(As always, if you or a family member are considering buying a used car, don’t buy until you run a car check report with where you will find out the true history of the vehicle.)