Next decade could be ‘very disruptive in our industry’
After 18 years with Michelin – including six years in Greenville as Michelin North America CEO – Carlos Ghosn leads one of the world’s largest automotive groups, Nissan Renault Alliance. The $158 billion automaker manufactures one out of every 10 cars sold globally and accounts for half the international market share for electric vehicles. Credited as the first person to run two Fortune Global 500 firms simultaneously, Ghosn answered UBJ’s questions on trends, workforce development and the car of the future, all of which could have big implications for the industry and your next car purchase.
What do you see as the most significant force shaping the auto industry today?
First, there is the combination of new technologies and regulations. Emissions regulations will continue to get tougher. That has already spurred the industry to embrace new, cleaner powertrain technologies, such as battery electric vehicles and fuel-cell electrics.
Connected technologies also promise to disrupt our industry. We’ll see a remarkable evolution of the car and how we use it, which will benefit the driver. For example, “autonomous drive” technology will soon allow you to let the car safely handle stop-and-go traffic, or maintain control on long highway drives, including lane changes. This will free the driver, at his or her option, to use that time more productively. And it will make driving in such conditions much less stressful.
Second, I believe we will continue to see more consolidation within the industry. The substantial costs of R&D into new technologies and to develop new products are such that smaller players in our industry will need to consolidate in order to survive. Consolidation can take different forms, including mergers, acquisitions, partnerships and alliances.
What does the car of the future look like?
I wish I knew the answer to that question! Imagining how the car will look and perform, even within just 10 years from now, is a risky task. We know it will be more connected, it will have lower emissions and it will have the option to perform more tasks autonomously. The big question is how this will happen, with which technologies? What are the features the public will embrace? What role will technology companies, like Google and Apple, play? Which of the traditional automakers will succeed and which will fail? The next decade could potentially be a very disruptive one in our industry.
Why has it taken so long for consumers to catch on to electric vehicles?
It has taken longer than we initially expected, but we have always looked at this as a long-term commitment. The biggest challenge has been to expand the charging infrastructure to remove anxiety about electric vehicle range. We see in countries where there has been a public-private commitment to expanding charging and encouraging the purchase of electric vehicles, sales have grown rapidly. Norway, an oil-rich country, is a good example. Lower taxes, parking incentives, free charging and a concentrated effort to install chargers across the country have made a big difference.
Are you concerned at all about fluctuating gas prices?
Absolutely not. EVs are a long-term strategy; you cannot change course because of temporary ups and downs in the price of gasoline. There will always be fluctuations, but the long-term trend in oil is clear. It’s also important to remember that the biggest driver toward a future of zero-emission vehicles is climate change. That is a significant factor pushing the industry to innovate in powertrains. Governments around the world are imposing stricter limits on CO2 emissions, and the industry is responding. It is why you are seeing other automakers follow our lead and introduce EVs, which is good. We welcome the competition.
How do you view some auto manufacturers’ workforce development crisis today?
We are all competing for engineering talent, especially. There is a significant shortage of engineers, and we are not only facing competition from within our industry, but from other industries as well. As technology companies begin to get interested in producing vehicles, the competition is only going to get tougher for those with automotive experience. It is why you are seeing some automakers and our trade groups actively supporting engineering programs and working to encourage students to enter engineering as a career. There is a lot of in-house and external training going on as well within the industry, to ensure our engineers are staying up to date in their skills.
What do you remember most fondly about your time in Greenville with Michelin?
The people, the beautiful environment and the great weather were all memorable. But perhaps the most enduring memory was how welcoming Greenville was, how much at home we felt there, despite it being a new and very different place for us. The people of Greenville were friendly and real. We truly enjoyed the experience and learned a lot in those years about what makes the U.S. such a great country.