It is difficult not to associate the Renault-Nissan group with its former Chairman and CEO, Carlos Ghosn. He governed the group from 2005 to 2019 with an iron fist. It is the origin of the drastic workforce reduction and restructuring policy that allowed Nissan to recover completely, as it was on the verge of bankruptcy. He was then cited as one of the most powerful foreign businessmen in the world. He was also CEO of the Renault-Nissan-Mitsubishi Alliance, which in 2017 reached first place worldwide ahead of Volkswagen AG, Toyota and General Motors.
However, the latter has been at the centre of one of the largest cases of embezzlement. On November 19, 2018, he was arrested and heard by the Japanese courts; he was suspected of concealing income in Nissan's financial publications. The following month, he was charged with using the company's funds for personal purposes.
How did this case impact Renault's image? How did the group overcome what can be described as a "global bad buzz"?
First of all, let's look at the importance Carlos Ghosn had in the group's image. If today the Renault-Nissan group is positioning itself as a leader in the automotive sector, nothing would have been the same without Carlos Ghosn's work over the past 20 years. Let's take the example of his commitment to electric group. He was able to impose a shift towards electricity at a time when no one believed in it. Today, the Renault Zoé is number one in sales.
Associating a brand or group with its leader is a well-known principle in building a strong brand identity. Its direct competitor in the electrical sector, Tesla, also relies on Elon Musk's public image. While this practice is widespread, it is not without risk because these leaders remain human beings, likely to make mistakes that can greatly damage a brand image.
Carlos Ghosn's mistake could have been critical for Renault-Nissan. In the first 2019 edition of the Posternak-Ifop barometer, the diamond company suffers in French opinion from the indictments in Japan of its former boss, thus moving from 11th to 16th place.
Fortunately, the group was able to manage this crisis. If we take only the French entity, Renault's image is not 100% built on its former manager. Know-how, excellence and French touch are Renault's values that have been promoted since its creation.
One year after Carlos Ghosn's arrest, the results seem mixed. Renault's market capitalization fell by nearly 20%, or €3 billion, to €13 billion, including €10 billion related to its stake in Nissan. However, overall sales of electric cars have never been so high, with more than 250,000 units sold in Europe, including 50,000 in France between January and September, according to German specialist Matthias Schmidt, a jump of more than 85% over a year which should ensure the Renault Nissan group a bright future.
Sources:
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