, YOKOHAMA, Japan
Media Center Interview with Nissan Americas Vice Chairman Bill Krueger
Q1. You have been in your current role as Nissan Vice Chairman for the Americas since earlier this year, and to some degree duties are divided between yourself and Colin Dodge. Can you explain who is doing what and how you see your specific responsibilities ahead?
A1. Colin has come to the region once a month since June and really has given us a chance to have a strong voice on the Executive Committee. The day-to-day operations are still run in the region, but certainly the decisions, the major investment decisions, need to go through the EC, and Colin is really an advocate for the region. He does come in about one week a month, and we really don’t have time to go very, very deep, but I liken it to the quick charger — we’re “Level 3 DC Rapid Charge”; we can’t just allow for a trickle charge. So, when he’s in town, we really focus our meetings and do a download to him, and he certainly gives us the landscape of the rest of the globe.
Q2. When you consider the diversity of the Americas, and obviously its economic importance to Nissan, you need different approaches in different markets. We’ve just seen a major announcement for Brazil, but how do you keep the pace, capacity and sales efforts going across the board?
A2. It’s quite a challenge, and in the past it was really a U.S.-dominated region. We’ve spent the last two-and-a half to three years within the region formulating a strategy called “Building the Americas,” and that has been meant to unify the North and South within the Americas. It really fits and complements the “Power 88” plan, which gives us much greater East and West continuity, so that we can leverage the global functions, and the power of the global functions, to help support the growth that we have within our market.
There is great diversity amongst the different markets. We respect those differences and that diversity, but at the same time we want to leverage the strength and power, and best practice we have within the region. We have really very strong market presence in Mexico — we’ve been No.1 there for 28 months in a row, and the last couple of months market share has been as high as 27%. We also have an emerging market — the B in BRIC, Brazil. We’re seeing steady growth out of that country and we’re learning a lot of the best practices and methods, and being supported regionally from the North. We’ve got people we’ve rotated in strong positions in marketing, in sales and monozukuri, in administration and finance, to help support their growth.
Q3. Mr. Ghosn went to Brazil recently and said we would add capacity. What will that mean to the overall Americas capacity potential, and figuring in Power 88, how it helps to meet some of those goals?
A3. It’s really necessary additional capacity to meet our growth aspirations. We have manufacturing presence in Curitiba that we share with Renault, but that capacity really isn’t enough to satisfy our growth aspirations. It’s a very large market, Brazil, and we expect it to exceed 3 million units in its total industry volume, and with our [market share] aspirations to be at 4 percent and then 5 percent, we’re going to be selling north of 200,000 units in Brazil.
Currently, the majority of that growth we see in the V platform. The V platform, which is just recently launched with the March in Brazil and soon the Versa, we see those needing that capacity throughout the region. There’s been strong demand for both those products in Mexico, Latin America, the U.S., Canada, specifically on the Versa sedan. We’re going to need that capacity for the growth in the North and the South, so Brazil really gives us the ability to have them make what they’re selling within the region and really relieves some of the pressure that’s on Mexico right now.
But, that doesn’t mean we’re going to take the pressure off our Mexican supply, because we’re going to fill that with growth. We’ve got a Sentra we’re going to be launching next fiscal year out of the Mexico plants. We’ve got our small van, the NV200, and followed up by our third V platform vehicle, the Versa hatch. So with those three vehicles, we’re full right now, and we’ve got one brand new vehicle and two significantly refreshed vehicles out of Mexican facilities. That’s going to give us the opportunity to add capacity and localize and locate enough Brazil capacity to their initial growth aspirations.
Q4. Colin Dodge recently visited and he said the BRIC success model is based on localization. Certainly Brazil will be a big part, so how do you see localization starting there and having a bigger impact down the road?
When we’re able to produce and source parts in the markets where we sell them, that allows us to have a quite of bit of resilience against currency fluctuations, not only within the region but outside the region. The localization of parts components and production makes sense for our region. Having Colin as our leader, he has been responsible for China, when he had GOM (Global Overseas Markets), India, Russia — he’s had the opportunity to experience and lead each one of the BRIC countries. I’m learning a lot from his depth of experience and it’s been a tremendous opportunity for me to stretch to another level.
Q5. Mexico is “Numero Uno” in a variety of ways, but not sitting on their laurels. You recently visited with Colin to celebrate their 50th anniversary. What was your takeaway and what are the ambitious targets ahead?
A5. I’ve had responsibility for the monozukuri, the plants, the purchasing, the supply chain in Mexico for over four years, and every time I go to Mexico I come away with a lot of enthusiasm and optimism from the Mexican team. We have made tremendous growth in that market and our manufacturing footprint. I’m always grateful for the passion of the Mexican team, the pride that they have in their production and sales operations, and I don’t see anything stopping them. In many cases you get to No.1 and it’s a time to rest, but the fighting spirit of the Mexican team, from the leadership to the factory worker, they have so much passion to succeed that I don’t believe they’re going to be stopped by 27 percent. They’re not resting and they want more, and it’s just an inspiration, not only within the Americas, but within our entire global marketplace.
Q6. What do you see as the key issues or challenges ahead for the Americas?
A6. Our growth and aspirations are very significant. We’re launching a lot of new products, we’re launching new shifts, and we spent the financial crisis slowing down and shrinking both our headcount, our manufacturing footprint, our base, and now we’re in this tremendous growth mode. We’re not just growing back to where we were before the financial crisis, (but) we’re going to be growing and setting records. We currently are in market share, north to south, seeing some very strong market share and seeing the TIV (total industry volume), or markets, growing at the same time. That’s been having a doubling effect on our growth and we see that continuing for the next several years.
We’ve got a great product portfolio, we’re starting to see very positive feedback from our consumers about the products themselves. Just this week the Consumer Reports in the U.S. announced their rankings, and both Nissan and Infiniti ranked in the Top 10. We’re seeing ourselves moving from below average to well-above average, and we’re not stopping there. We have aspirations to get to top level product quality at the same time our sales and service experiences are moving from the bottom to the middle, with aspirations to get those to the top also. There’s been a lot of efforts for customer satisfaction in the dealerships, in the service bays, within our regional support function to help grow and improve the brand and enhance our dealer network.
Q7. Bill, if you see how we are differentiating Nissan and Infiniti from our competitors, what will be the stepping stones to see that become more profound ahead?
A7. Innovation is the key cornerstone that we’re hanging a lot of our strategies around, and it’s about growth and trust. The trust aspect of safety, quality, environment — we’re hitting all three of those very hard. We’ve got a lot of innovative functions in our vehicles — industry firsts, and we’re going to be proliferating those across the product line up. Around-view monitors, rear-collision detection — some of those features and functions that are industry firsts that really help support our trust relationship with the consumer.
The environment — we’re seeing both our factories, as well as our products, and the proof point of innovation in environment is the Nissan LEAF. We’re seeing not only the LEAF, but our Pure Drive penetrating the rest of our portfolio. Lastly, quality — I’ve already mentioned some of the accolades we’re starting to see. The Altima has been a Consumer Reports top pick, and the G, which is also our volume Infiniti brand product is a Consumer Reports top pick. We’re seeing that as our innovation in quality, safety, environment — building that trust is allowing us to grow and grow profitably within the entire Americas.