A Call to Calsonic Kansei

SAITAMA, Japan – At the R&D Center and headquarters of supplier Calsonic Kansei, Nissan CEO Carlos Ghosn expressed confidence in the company's growth and cost leadership, as the two work in tandem to keep production in Japan in check, from Nissan GT-Rs to EVs.

Q1: Cost control is often won with deep cooperation from suppliers. How are Calsonic Kansei and other firms facilitating this while ensuring quality in supply lines?

Ghosn CEO: Calsonic Kansei is one of our main suppliers. It's due to the fact that for many, many years, the two companies are working together in the spirit of partnership at the level of engineering, at the level of supply chain between purchasing and their sales organization. There is a very good understanding about what are the necessities of the business – and how can we get to common beneficial results. That means competitive offer from Calsonic, in terms of quality and cost and development of the business of Nissan.

The fact that this work is being done together, not only inside Calsonic through the collaboration between the functions but between Calsonic and the different functions of Nissan, ensure that Calsonic will continue to develop a very good offer for Nissan and still represent a big supplier of Nissan.

I was reviewing today the numbers and more than 80 percent of the revenues of Calsonic Kansei is driven through the business of Nissan. Even though they're trying with a lot of effort to develop business with a other companies, like Renault or AvtoVAZ or Mitsubishi or Isuzu or Suzuki, still more than 80 percent of the revenue and this is a translation of the fact that there is a very good relationship between the two companies that we need to nurture.

Q2: To keep domestic manufacturing affordable, though, Japanese production is increasingly sourcing from overseas. How does a major manufacturer like Nissan balance this to keep suppliers in Japan viable?

CEO: What Nissan is doing is trying from one side to streamline its operations and then try to get as much sourcing from LCC countries. Well, Calsonic is doing the same. At the end of the day, Calsonic is also assembling a lot of parts that it is bringing from different areas. Calsonic also has an effort into trying to get from LCC a lot of components.

And, frankly, even though there are a lot of efforts from Nissan to get less dependence on the yen, this is not about Japan, this is about a currency in Japan – which is the yen. Calsonic and the suppliers in general are doing the same thing. So, they are, in a certain way, doing in parallel what we are doing and so far they've been growing.

Q3: Finally, Calsonic Kansei also manufactures parts for electric vehicles. What is your outlook for the EV market, and plans to ramp up Nissan production in Japan and abroad?

CEO: The potential of the EV market is strong. At the moment the sales are slow and if we take a moment and look at why the sales are slow, it's not because people are dissatisfied with the product. In fact, the LEAF has been doing a tremendous job in terms of quality and reliability, people are very happy. They may have some concern on the visibility of the autonomy of the car, and we are correcting it. But they are complaining about the lack of infrastructure. And they're complaining about some elements around how do they resell the car, what's going to be the next generation of battery, etc.

So we're working through it. But the potential is there. It's going to be very big. And I maintain the fact that I think 10% of the car market is going to be EV. And a testimony to this is that the Chinese have decided to have 5 million electric cars sold in 2020 and 2 million capacity installed in China in 2020. On top of the fact that the mayor of London, Boris Johnson, has agreed to sign with us an agreement in which all the taxis in London are going to be zero-emission and you're going to see more things like this coming. So the potential is here, it is needed. We're just going to have to be patient into the ramp up.

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