Ghosn unveiled the Nissan IDS concept at the Geneva auto show (Photo: Nissan)

Renault-Nissan CEO Carlos Ghosn spoke about the digital transformation of the Franco-Japanese car alliance and other matters to reporters at the Geneva auto show in early March.

You recently appointed former Nokia executive Ogi Redzic to implement the connected-car strategy at Renault and Nissan. One thing you want him to do is encourage a startup mindset in the two companies. Please describe his assignment in a bit more detail.When you transfer the car into a space where you connect it with its environment and with other cars, that’s a heavy job. I don’t think there’s a reference organization to do that. Obviously you have to rethink completely how you assemble and engineer the car, taking into consideration that it will be much more connected than before. You can’t just go in and do kaizen on an existing organization. You have to start with the object ”“ the car ”“ and define where it’s going. Then you have to reorganize the company to make sure this is not a one-shot effort, but that it is continuous. Connectivity involves a lot of technologies and they are changing all the time and you have to plan for this.

Ogi Redzic comes from Nokia and has worked in a completely different environment. Telecommunications and startups are very different from the car industry. When you are joining a carmaker, you see a very strictly organized, process-driven company. The challenge is: How can you keep the rigor of the carmaker, but at the same time adapt the product to very disruptive technologies. That’s what you have to do. It’s the same for all carmakers and the one who’s going to win in this competitive game is the one who manages to keep the absolutely essential discipline while at the same time making the necessary changes. Ogi’s  mission is to try to help the carmaker adapt to this new environment. It will take some time to make sure that our technology development is taking place and that the product is continuously adapted to the technology evolution.

Will you be developing new business models as you make this transition?One of the carmakers that is most advanced in this area is General Motors. They started with OnStar a long time ago and offer lots of applications and services that they are selling through the car. I’m not saying this is what we will do, but it’s an example of how to move from selling a product in a certain way to selling a product as well as services around this product. I don’t see these services as a kind of add-on, but rather as something that can be your central offering. There are plenty of things you can imagine around the car, but you have to do them well, they have to make sense and be competitive. You cannot just say we will offer services only because they happen to be available.

Why are sales of electric vehicles so disappointing?Electric cars are safe and reliable and offer a very high level of customer satisfaction. They are hitting some bumps only because consumers are worried about range and there is no charging infrastructure. That’s what’s slowing sales. A lot of people are testing electric cars, but they are not buying because they don’t know where to charge them. If you live on the twentieth floor of an apartment building, you have no charging station. And with a driving range of 100 to 150 kilometers, you don’t want to take any chances. So, first you need to increase the autonomy of the car and, second, you need a charging infrastructure. Autonomy doesn’t matter if you don’t have that infrastructure. You’ll then always have that anxiety. If you don’t have charging stations everywhere, you cannot have a mass-market product.

So where do we go from here then? And who’s going to pay for this much-needed charging infrastructure?It’s not a technical but a societal issue. Do we really want to make the investments needed to make zero emissions a reality? It’s not a question for carmakers, whose duty it was to bring the technology to market. We did that. If society sets a zero-emission objective or an objective to limit temperature increases, this will require a concerted effort.

And what kind of barriers do you see for the sale of autonomous vehicles?Autonomous-car technology will be ready in 2020, but there’s another condition that needs to be met here. For autonomous cars to be mass-marketable, you need to have regulatory acceptance. If you still need to have your hands on the wheel and your eyes on the road, there’s no advantage to having an autonomous car. The regulator will have to accept that these cars can drive without somebody’s hands on the wheel. The regulatory regime also cannot be different from one country to the next. There will be regulatory acceptance because autonomous cars increase safety. That will be the driver, much as emissions and global warming are the drivers for electric cars.

Does Renault-Nissan need a partner for the development of autonomous vehicles?There is no need for such an alliance. We have enough resources to do this ourselves. Obviously, we have to cooperate with technology companies that make sensors, cameras, software, maps, etc. We work with Google, Mobileye, Here and others. These are normal relationships with suppliers except that these new partners are a little different from the usual auto-industry suppliers. But we work with them in the same way. One effect from the strong focus on developing autonomous cars is that we are pushing makers of sensors to move very fast. Today’s sensors can do things that were impossible three or four years ago. The same holds true for cameras. Everybody’s very excited about this.

-By Arjen Bongard