The second Ghosn shock: Mitsubishi Motors

The first Ghosn shock happened in 1999 when Carlos Ghosn became COO of Nissan and decided the survival of Nissan necessitated a radical paring back of the number of suppliers and smashing up the vertical keiretsu (enterprise group) that had been built up around it, largely in the Okayama region of Japan.  Around 90% of automotive suppliers lost work, but were saved by the fact that Mitsubishi Motors also had a major factory in the region.

Although Masuko Osamu, CEO of Mitsubishi Motors said, when Mitsubishi came under the umbrella of Nissan in 2016, that this would be a plus for automotive suppliers, because it would increase the number of orders they would receive, this has turned out not to be the case, according to Nikkei Business magazine.

The Renault Nissan Mitsubishi alliance is meant to bring cost savings and synergies, whilst bringing them into the top 3 car manufacturers.  Each of the three brands shares their technology on electric vehicles, driverless cars, IoT, parts and platforms, centralises purchasing, selects the technologies that they want and then develops their own models, targeted at different customer segments.

The Nikkei illustrates the article with a map showing the relative regional production concentrations of each brand – Renault, with 29 factories stretching from north western Europe down to India, and another cluster in Latin America, Nissan’s 41 factories covering Africa, Australasia, Asia, USA and Brazil, and Mitsubishi Motors’ 17 factories mainly concentrated in Asia, Russia and Brazil.

This heralds the beginning of the “Virtual Major [company]” according to the Nikkei – they do not actually merge, but work collaboratively in each region as if they were one company.  Which sounds great on paper, but I sense a lot of work for us cross cultural communication consultants arising from it!

 

 

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