CEO Series: Fadi Ghosn, CMO of Nissan Middle East
Pursuing a goal of zero emission vehicles and zero fatalities on the road, Nissan announced their ‘Intelligent Mobility’ vision early last year, a vision that aims to move customers around the world towards a safer and more sustainable future. To realize the vision, Nissan launched a long-term strategy that enabled the company to introduce the world’s first mass production EV, the LEAF, in 2010, and drove the development of cutting-edge autonomous driving technologies. These steps have allowed Nissan to not only deliver the benefits of EV and autonomous driving innovations to as many customers as possible, but also lead the way toward a new era of mobility.
During ArabNet Digital Summit 2017, CEO of ArabNet Omar Christidis sat down with Fadi Ghosn, CMO of Nissan, to discuss the future of transportation, cars, and marketing in the automotive industry.
With self-driving cars and the spread of carsharing services, what do you see as the future of transportation? And what do changes in car ownership behavior mean for a brand like Nissan?
While autonomous driving, car-sharing, and on-demand car services like Uber are currently disrupting the car business, they will eventually be part of every city’s business model. While it is difficult to see how things will change and expand in the future, at Nissan, we obviously see ourselves building different cars in the future that fit the requirements of car sharing and other trends.
Today, most car industries classify cars by A, B & C segments, where A is a mini car, B is slightly bigger and C is a medium-sized car. When it comes to car sharing, the ABC classification loses importance, because instead of a customer choosing an A car as their first car, they may decide to car share instead. Therefore, all car manufacturers are making huge investments in the direction of car-sharing.
So today, what car features do people value and what features do you think they are going to value in the future? How are they going to make their purchase decisions?
I believe if you look at geographies and demographics, each has its own requirements. The common understanding is people always look at value, safety, reliability, comfort, and in some cases luxury. In whatever case, whether you want to take an Uber or you want to car share, these things are fundamentals of the business. However, another important feature I would like to add is digital connectivity.
The process of getting a car from the conception phase to the market is a 6-7 yearlong process. So for example, when a screen with some kind of technology is developed for a car, by the time the car gets to market, the technology is old. Today we see a lot of people not opting for a navigation screen but rather for something we call mirroring, which allows car owners to mirror their phones to the screen.
The screen is no longer a navigation screen, but a multimedia screen, which you can do so much more with. Therefore, although we are evolving with technology, technology is also moving at a pace that not all car manufacturers can catch up with, and only a few are really taking a leading position in that sense.
So with this context, where do you see Nissan in the next five years?
It’s tough to describe but what we are trying to do is combine all our technologies under one main umbrella which is Nissan Intelligent Mobility and three main pillars which are:
1) Intelligent Driving
2) Intelligent Power
3) Intelligent Integration
Therefore, several of the technological trends that we are embracing such as EVs (electric vehicles), autonomous driving, and self-driving vehicles fall under those pillars.
What about self-driving cars? What are Nissan’s plans? When do we see self-driving cars?
So let’s talk about the difference between autonomous driving, and self-driving cars. With autonomous driving, whilst the car can act on behalf of the driver, the driver is still in control of the car. Dubai specifically is extensively testing autonomous driving and will soon be pioneers in automotive technologies. As for self-driving, I believe it will be a long time before we see self-driving cars on the roads, since it will require more technology and a lot of regulations to become commercially available. Moreover, we have also seen in testing, that human interaction is still needed to direct self-driving cars.
Self-driving cars do not come without some challenges for governments and municipalities. For example, self-driving cars mean lower insurance, which means less income for insurance companies. Self-driving cars will also affect cities where the income of traffic is in the millions, like in New York City. However, I still think we are in the early stages of discovery and all we can do is understand and cope with the changes.
Let’s talk about marketing. How are you going to communicate around the channels that you’re using and the strategies that you are using? Where are you expecting to spend more money, and what kind of new channels or strategies are you pursuing within the digital media domain?
While there is definitely a move into digital, traditional media still plays an important role when targeting specific audiences, geographies and demographics. Moreover, the challenge is not in identifying which channels to use, but rather defining the customer, as most agencies today still define the customer by ‘Age 20-40, Male, etc.’ which will not work moving forward.
So how would you define the customer?
I think you need to believe in the data and you need to be ok with making mistakes. As a company, we have been investing heavily in marketing mix modeling where we are using data to really analyze and optimize. I also think we are one of the few manufacturers that talk about integration and we have even created an agency called Nissan United, which is the dedicated Omnicom unit that handles Nissan’s marketing business within the United States.
What about the customer journey? How do you see technology transforming the customer journey and how do you see the purchasing process changing as a result of new technologies? Are you looking at new touch points in the customer journey? How do you see that being reshaped?
Of course, we are using so many techniques and we’re making mistakes and learning. There is no magic formula, and we’re going through a digital transformation with a ‘digitize or die’ attitude. Today, there is suddenly a lot of data, but the problem is we are in a region where there once was no data, and and a lot of people are struggling with what to do with it.
If you look at the purchasing cycle of an automotive, people are doing a lot of research online, so the customer knows his stuff and knows it more than anybody else, but still needs to go to the showroom. Car purchase is the second biggest investment after a home, so you wouldn’t expect a customer to buy a car that costs anywhere between $15K to $100K by just going online or experiencing it via virtual reality. The customer needs to go and test drive the car, feel it, touch it, etc. Customer experience is very important and we are redefining the whole customer experience by implementing a frictionless customer journey.
Do you think e-commerce is a viable strategy for automotive?
Ignoring it would be a mistake and I definitely think we need to keep learning. Car shopping won’t happen online because the shopping experience is different from the ownership experience. So you can shop around online, but you also need to interact with the car. A customer may spend $500 on an item online, but when buying something that costs $20K, customers need to go beyond their screen. Moreover, apart from touching and feeling the car, there are a lot of emotions that goes into purchasing a car, and we cannot simply ignore those.