A lesson Ratan Tata could learn from Nissan

Carlos Ghosn, global head of the Renault-Nissan alliance, believes focusing on large sedans and luxury cars is not the way to success in the Indian car market. Instead, affordable is the way to go and could even become a game-changer, he told Forbes in a recent interview.

So why then did Tata Nano, which was hailed as a game changer, turn out to be such a failure?

Ghosn has an explanation for that. He thinks that while Ratan Tata, the chairman of the Tata group, had a great concept in terms of the Nano, it would have worked better if the group had introduced several cars instead of just one model.

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In fact, a range of affordable cars is exactly what his group will work on, he told the magazine.

In the interview, he also said he thought it was crucial to build multiple partnerships in India, and not have single partnerships like the alliance did in China or Russia.

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It is crucial to learn different things from different allies, even though he acknowledged that every partnership would have its share of compromise and frustration. In the case of Ashok Leyland, the secret of the successful collaboration was that there had been no compromise on either side, he told Forbes.

He also believed the process of learning “smart frugal” design and engineering from Indian companies would take Renault-Nissan to the next level.

He also thought BRIC (Brazil, Russia, India and China) is not the only emerging-market game in town. “We are talking about Indonesia, Vietnam, South Africa, the rest of Africa. We are talking about countries in the Middle East, some countries in Latin America, which are coming through very strongly,” he told Forbes.

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He’s convinced that by 2016, the Renault-Nissan alliance would capture 10 percent of the Indian auto market.

During the interview, Ghosn also spoke about about why Logan, a vehicle created in collaboration with Mahindra, failed.

For the entire interview, click here.