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Ghosn rules out a merger

Nissan Motor president Carlos Ghosn delivers a speech during the International Automotive Conference in Tokyo yesterday. The motor show will be open to the public from Saturday until Nov. 5. PHOTO: AFP

The president and chief executive of Nissan Motor Corp, Carlos Ghosn, repeated yesterday that he saw no benefit for Japan's second-ranked carmaker in a merger with its French parent, Renault SA.

He stressed that having separate identities would create better value.

"There is no way we are going to merge these two companies ... A merger ... will destroy value. I see no advantage in a merger," Ghosn said at the Tokyo International Automotive Conference in Tokyo.

"If you do not respect people's identity, people will not be motivated. And if they are not motivated, you will not get performance," he said, explaining the need to maintain separate corporate names and brands.

Ghosn also stressed that the alliance between Nissan and Renault is working more smoothly than those of competitors, saying procurement costs had been slashed by 30 percent since 1999 and there were virtually "no overlaps" geographically and operationally.

As a consequence, "Nissan will continue to be based in Japan and Renault in France," he said.

"There is no way we are going to merge these two companies ... A merger ... will destroy value."

Carlos Ghosn, president and chief executive officer of Nissan Motor Corp

Renault stepped in to take control of Nissan and rescue it from the brink of collapse in 1999 and now holds a 44.4 percent stake in the Japanese carmaker, which has the highest operating profit margin of any carmaker worldwide.

Nissan in turn has a 15-percent holding in the French auto giant.

Ghosn said he was "confident [Nissan] will not fall back" but at the same time warned of the risks of complacency "if you don't pay attention to the fact that the company has to stretch itself to the maximum."

Ghosn also expressed confidence that Nissan would achieve its goal of increasing its annual global auto sales by 1 million vehicles from last year levels by September 2005 -- one of key targets set under the three-year Nissan 180 business plan -- despite a challenging environment.

The Nissan boss said that after assuming the presidency of Renault in 2005, he may initially focus more on steering the French firm toward sustained growth but stressed he will stay on in the top position at Nissan.

There was no reason to believe that the high growth rate in China would stop, Ghosn said, although the problem of over-capacity may eventually emerge once the Chinese car market matures.

"Is it going to be imminent? I don't think so," he said.

The conference was being held on the eve of the Tokyo Motor Show which opens to the press today and to the public on Saturday.
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