Ghosn Dislikes Incentives, Outsiders' Advice

Nissan Motor Co. Ltd. CEO Carlos Ghosn chastises U.S. auto makers for using sales incentives to keep factories churning at all costs. A high price has been paid for sustaining sales of 17 million units, he says at the New York International Auto Show. The heavy reliance on rebates and discounts has harmed brands and taken money away from developing new products customers will want to buy, Ghosn says.

Nissan Motor Co. Ltd. CEO Carlos Ghosn chastises U.S. auto makers for using sales incentives to “keep factories churning at all costs.”

“A high price has been paid for sustaining sales of 17 million units,” he says at the New York International Auto Show.

The heavy reliance on rebates and discounts has harmed brands and taken money away from developing new products customers will want to buy, Ghosn says. He estimates the industry collectively spent $60 billion on incentives last year.

“That's enough to fund 120 new vehicles at $500 million per platform,” Ghosn says.

Nissan has used incentives “more surgically, not year-round,” he says.

Meanwhile, he predicts industry consolidation.

“I don't want to play the numbers game about how many companies will be left, but there will be fewer,” he says.

He expects Ford Motor Co. and General Motors Corp. to survive, but offers advice to neither. “It is extremely difficult to understand the root of a company's problems from the outside.”

He recalls that, when he took the helm of then-troubled Nissan, he ignored outsiders' advice.

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