Nearly two decades after saving Nissan from the brink of
financial collapse, CEO Carlos Ghosn is taking on another
Japanese reclamation project.
This time, it’s Mitsubishi Motors.
“I’m going to dedicate a little bit of my time in order to steer
Mitsubishi back to normal development and support their team,”
Ghosn told Business Insider in an interview.
Ghosn’s words understate the dismal state of the Japanese
Like Nissan in 1999, which had lost money seven of the eight
years prior to Ghosn’s arrival, Mitsubishi in 2017 is a real
In 2016, the Tokyo-based automaker reported a $1.4 billion loss
along with double-digit declines at a time when markets in China
and North America were reporting all-time sales records. In the
US, Mitsubishi’s presence has withered down to just a handful of
models with a hold on less than 1% of the market.
In addition, Mitsubishi found itself mired in scandal after
admitting to regulators that it falsified fuel economy data on
several of its models.
On April 1, Ghosn — who currently serves as the chairman and CEO
of both Nissan and Renault, the chairman of Mitsubishi Motors,
and the chairman and CEO of the Renault-Nissan Alliance — stepped down as CEO of Nissan.
The goal: get Mitsubishi back on track.
In October 2016, Nissan acquired 34% of the venerable Japanese
automaker in a deal valued at $2.3 billion. This move allowed
Mitsubishi to gain entry into the Renault-Nissan Alliance.
“When the opportunity came, due to some unfortunate circumstances
concerning Mitsubishi Motors, to have them inside the
alliance, we were convinced it could be a good fit. This was not
something that came out of the blue.” Ghosn told us.
“This was a company with whom we have been working already. So
very quickly we said yes, knowing that we would develop a lot of
synergies with them.”
There are few CEOs in the business better at finding those cost
savings than Ghosn. In his early days at Nissan, Ghosn shut down
five plants, laid off thousands of workers, cut the cost
the company paid for parts by 20% through streamlining its
procurement process, and refused to greenlight new models that
would not make money.
In the process, the Brazilian-born French businessman earned the
nickname “Le Cost Killer”.
As painful as these moves may have been, they allowed Nissan
to recover from its crippling $17 billion dollars in debt and
return to healthy growth.
With Mitsubishi, Ghosn is back again, looking for ways to turn
around the once-proud automaker that has stagnated over the past
“One of the big problems for Mitsubishi is that this company did
not grow. It stayed around 1 million cars a year for many years,”
One of the reasons Mitsubishi’s sales stagnated was that it
simply didn’t have the resources to develop a broad lineup of
products on its own. With the Nissan-Renault juggernaut in the
picture, Mitsubishi will now have an extensive bank of platforms,
engines, and technology from which it can draw to create the
brand’s next generation of models.
As a result, the alliance will help make the process of revamping
Mitsubishi’s product line much easier because it will be more
cost effective and it will get done in a shorter period of time
than it would have without these resources, the executive
This also means that Mitsubishi will likely plug up any glaring
holes in its portfolio, at least in the immediate future,
using existing Nissan and Renault models as a foundation.
However, Ghosn cautioned that most of the work associated with
the turnaround has to be done inside Mitsubishi.
“Obviously now, by accessing the technology of the Alliance, by
accessing the platforms of the Alliance, and by accessing the
best practices of the Alliance, Mitsubishi is going to be able to
not only have a larger lineup of models, but a much more
competitive product, while still keeping the Mitsubishi flavor,
the Mitsubishi brand, and the Mitsubishi design that’s very
different compared to Nissan or Renault,” Ghosn said.