The Dealer Playbook
The Dealer Playbook

Episode · 1 month ago

Mike Colleran: How Nissan Is Tackling Current Auto Industry Challenges

ABOUT THIS EPISODE

Mike Colleran is the corporate vice president at Nissan Motor Company, a role he was appointed to in June 2020. Previously, he was the chairman of INFINITI Motor Company and was responsible for managing the brand, business operations, and all marketing/sales for INFINITI globally. 

What we discuss with Mike Colleran:

  • Mike talks about the shifts that he's observed during his 30+ year career in the automotive industry. The most impactful shift being the transformation from internal combustion engines to electric vehicles. 
  • Where manufacturers once employeed mechanical engineers, there is a shift to chemical engineers.
  • The transformation began to accelerate back in 2008, when companies moved from high over heads to more streamlined business operations.
  • Mike explains that the highest priority for retail dealers over the next 3, 5, and 7 years needs to be delivering a world-class customer experience. In a world where fixed costs add pressure, the challenge will be delivering that incredible experience while managing fixed costs.
  • How far ahead do automakers look to the future? Nissan has been preparing for electrification for years when it released the first iteration of the Nissan Leaf.
  • As a retired Marine Captian, Mike shares how the marine's motto of "Semper Fi" has impacted the way he leads, builds, and trusts his team.
  • How are automakers seeking to mitigate chip shortages from happening again in the future?
  • Are OEMs conspiring to get rid of the dealer network?

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...the car business is rapidly changingand modern car dealers are meeting the demand. I'm Michael Cirillo andtogether we're going to explore what it takes to create a thriving dealershipand life in the retail automotive industry join me each week forinspiring conversations with subject matter experts that are designed tohelp you grow. This is the dealer playbook. Mhm Yeah. Mhm Good. Yeah. On this episode, I'm glad to be joinedby someone who has vast industry experience working in various om rolesincluding group vice president of Infinity America's chairman of InfinitiMotor company and who now currently serves as the vice president of U. S.Marketing and sales for Nissan North America mike collar and welcome to thedealer playbook podcast. Like glad to be here today. Thank you for having me.Now, I see you on Fox news and all of the news and I think what in the worlddid I do to deserve this, this uh, this interview and I'm so excited you'rehere. Um, I do have one question to kick this off. You know, since yourdays working at Saab automobile and cadillac to present. I'm curious aboutwhat shifts you've witnessed or experienced in the industry up to thispoint and whether or not there was any sense that those shifts or pivots werecoming as you were working in those various roles. Okay, um that's, that'sgreat and, and for someone that's been in the industry for 30 some odd yearsand actually, if you go back even further in my career prior to somemilitary service. I grew up in automotive family. So I've seen a lotof those shifts and uh, uh, you know, probably the one that is the mostimpactful is the one that you're seeing right now and, and you know, we'reseeing that shift clearly from what has been for the last 100 years, internalcombustion engines to uh, to electric vehicles and alternate, uh, powertrains.And uh, and that shift has been, I think extremely transformative for theindustry and I think we're going to see more, but even reaching further back,you think about the difficulties the industry had with, you know, post theLehman shock and uh, and how that started to transform the industry aswell. Uh, and the transformation wasn't so much in terms of product was more interms of the way the businesses were run, uh, they moved from from a larger,higher capacity, some in some cases...

...over capacity, um, and, and extremelyhigh fixed costs to, you know, much more, uh, leaner approach to thebusiness and a more global approach to the business. And we saw that withplatforms, uh, starting to be uh, common ized and utilized across alarger, a larger space. Then, of course, even in between that, you saw thetransformation as we started to move, um, I would say in the us more towardsa more european platform, which, or, or landscape, which was more, you know,let's dance. Um, and smaller smaller vehicles and then of course thetransformation with SUVs coming in as well. So a lot of transformation overthe years? Uh, and, but the one that we're, that's in front of us right nowis, is probably the most transformative and we'll have the longest lastingimpact maybe for the next 100 years. Hmm, interesting. It's funny you saythat to, I was actually shocked. I had a speaking engagement in Holland a fewyears ago and it was interesting to see, as you say, there's the europeandifferences where even, you know, say for example in north America, if youwork in agriculture is pretty common that you're going to be driving apickup truck or something that, that effect. But as you say, the differencethere is, they were all driving like cube vans and you know, smallervehicles. And I also thought it was interesting. I remember we were headedto a conversation with some of the, the leaders at Peugeot automaker and wepassed the Tesla factory and I said, this is interesting and they saidthat's what all the taxi drivers dr here, you know, it didn't have thatsame, you know, appeal as it did here. So I think that's really interestingand as you say, we're on the verge here of something that is really impactful.It's certainly conversation that a lot of retail dealers have. And so now I'mcurious as you've experienced all of that, What do you believe from yourvantage point mike, what do you believe the highest priorities for retaildealers should be Looking forward to the next 3, 5, perhaps seven years.Yeah, without a doubt, customer service delivering a world class customerexperience I think is going to be one of the key differentiators, uh, for ourdealers in a world where, um, fixed costs again, um, there's a lot ofpressure, downward pressure, uh, as it needs to be fixed costs. Um, thechallenge will be delivering that incredible world class experience andstill being able to control fixed costs. We know that the move toelectrification won't be inexpensive for the industry or for our dealers. Uh,and we're gonna have to find ways to be better and still deliver, um, like Isaid, that world class experience and I...

...think that will be the biggest, biggestchallenge that faces our, our dealers as, as we move forward into the future.I think the transformation from, from internal combustion E V will be, uh,will be something that they'll have to grapple with, not so much from a salesstandpoint, but certainly from a service standpoint. And there's been alot of discussions around that. Um, some alarmist and some would say moremoderate as, uh, E V still need to have work and consumers will have otheropportunities as well, uh, within the v space, and dealers will be able toleverage that opportunity, uh, and create new streams of revenue. Um, and,uh, and, and dealers will need to transform to some extent and we'llcertainly see it within our own industry. I mean think about it, youknow, we've been 400 years primarily relying on mechanical engineers and nowwe've got to rely on chemists and electrical engineer so completelyrethinking the business from top all the way through. And uh and dealers, Ithink that will stand out will be the ones that deliver just world class,unapproachable customer experience. I think this is so amazing. You know, werecently did a study. It's kind of an ongoing living study at this point, butof all of the call it 500 plus interviews that we've conducted nowover the 7.5 years when I asked business leaders what should dealers befocused on? I would say a high percentage of them echo your sentimentand I think it's for for good reason. You know, we don't get to have the samevantage point that someone sitting in your seat does. And so to hear it fromyou just adds extra validation around the importance of customer service. Ido have a question on the back end of that, which is, you know, as you'vebeen discussing E. V. S and and the shift towards that and and the pivotfrom mechanical engineers to chemists and, you know, electrical and all ofthose sorts of things. Can you give me a sense and you get, by the way, theDPB listeners know that the guests can say Cirillo, you need to just shut upbecause I'm not. So if this is something you're comfortable asking,I'm not gonna ask anything controversial, but I'm wondering from your experience working at O E mat automaker level, is there a delay on, you know, I'm thinking in my gut, I'mtrying to think of the best way to ask this mike, is there a delay betweenwhen the automaker sees that something like E V is what needs to be focused on?And this perceived like you caught me off guard that the dealer communityalways has like, where did TVs come from? Are you seeing this years inadvance? Like, hey, we got to move in this direction or, or is the automakerkind of in that same boat where we're...

...like, oh man, we got to, we got tostart thinking about this. I would say that generally, um, our dealers, uh,certainly are Nissan dealers proved to me every day that their students of theindustry, uh, they kind of realize that as we see it, we've been preparing forelectrification for many years. We came out with the Leaf 10 years ago, we havefive billion km driven and 500,000 vehicles on incident free, uh, milesdriven by our all electric Nissan leaf. And so our dealers are ready forelectrification. They've been expecting it. I don't think anyone's been caughtoff guard. You know, certainly the change in the political landscape andultimately the move to E. V. And a cleaner environment, which wecompletely support was anticipated. Sometimes though it's, it's hard tojudge the speed of the movement. Um, and, and we know that there's differentways, you know, the consumer will move at a speed, the industry will move at aspeed. And then of course, you know, regulatory moves at the speed as well.And sometimes they don't always match. But I would say that Nissan's well wellpositioned on the heavy side. No question about it. We're all in. Youmay have seen the announcement we made the other day in the UK about E V 360,which is a brand new battery electric suv. And a partnership with, withSunderland 100% renewable micro grid. Um, so we're really investing, uh,really hard into E V. Uh, and of course we have the all new area coming here inless than a year, a battery electric crossover, which, you know, we're gonna,uh, we're super excited about. But more importantly, will help Nissan help theindustry transformed into a cleaner, more renewable industry. I'm reallyglad that the Nissan execs saw my feedback request that I have a daughternamed Aria and that you should absolutely name a vehicle. Well, ourchief marketing officer has a niece named Aria and, and we think thatthat's actually maybe where it really started. But it's a great story. It'stoo long for today. But uh, yeah, it's really cool. We've been confused acouple of times with the hotel. Uh, but, but something completely different. Sowe're super excited to bring that to market and we start our reservationprogram here in uh, just a few months. So I know she's, when she comes of age,she's only eight years old now, but I'm, I'm already anticipating an ariasitting in my driveway for aria. Well let's get her on the list. Yeah, we'llhave to get her on the list. It's funny you say that too because I rememberwhen I was first, they, I think they had just built that aria hotel and wewere expecting, uh, my daughter and it...

...was actually my first ever paidspeaking engagement was at the aria. And when, when I came home, my wifesaid, I think we should name her aria. And I said, you know, everybody's gonnasay that I named her, We named her aria because of, for some reason my firstgame with and uh, that, that never came true. That's just me manifestingnothing. Um, I want to touch on something that you had mentionedearlier. Um, just quickly in passing and, and that was your time in themilitary. I first want to thank you for that. Um, but it also brings upsomething that I think is really interesting you having served as amarine corps captain, um would understand way better than I do themarine motto of semper Fidelis and I'm wondering if that experience has had animpact or particularly around that model or that motto rather has that hadany impact on your leadership style and how you create um culture and workplaceenvironments. My great question 100% yes, um semper Fidelis, always faithfulum uh, never lost those ties to my past and still stay close to the, to thepast as well, but certainly helps me every day. Uh you know, probably at abase level, the discipline that you get from military service I think servesyou well in a corporate environment I think in a business environment uh forsure, but you know, I was challenged my team to lead from the front, you can'tlead from the chair that I'm sitting in right now, but it's not where you needto lead from, you need to lead from the front, be present in the industry, aswe say in the japanese business walk the Gamba, which is to be there withthe front line troops. Um and uh, and then I have philosophy as well astraining as train your people well and then let them run, people will alwaysamaze you and they always surpass my my expectations. But uh, and this is awatchword for, for all leaders I think inspect what you expect. Uh and if youdo those things, um you typically tend to be successful. So you know, I see mymilitary service as a booster to my career um and there's really not a daythat goes by where I don't draw on some experience from my past to to improveour future. I think this is, yeah, I think this is so tremendous. I mean Ihave so many questions along that lines, but I will spare them. Um you know,perhaps for another time I'd love to, perhaps we'll cross paths in person andI'll pick your brain. But something you said really intrigues mebecause I believe in it so deeply as I've built my business and we've placedemphasis on the training and process implementation and and kind ofdeveloping that muscle within people. I...

...know this is something that someleaders struggle with which is thinking that the training they'veoffered is adequate, but then also being quick to fire people without, youknow, perhaps internalizing did I do my part, how do you, how do you navigatethat as a leader? How do you balance that so that you do have a genuinesense of whether or not you empowered or got in the way of an individual fromperforming at their best? Well, you know, individual performance, talk totalk about, but from a standpoint, you know, when you think about the groupand and individuals in the group, it's uh my philosophy is just train, train,train always be constantly training, be ready for the future um and trainingmaybe more important now than ever if you think about what we talked aboutearlier and move to electrification. Um, uh, there's a, there's a, there's adeep need, uh, to, uh, in my opinion, train even more things like autonomousdrive where I think retraining the consumer as to what thomas drive is,what it can and can't do. Um, and, and all the benefits we are, we aredefinitely working very hard in that area in terms of training to ensurethat consumers get the absolute best delivery that they possibly can andwith all the new technologies in the car, the delivery is a challenge for,for our sales people in our, in our showrooms and we're working very hardin that area. So you know, I, I, there's no substitute for training. Ithink the minute that you say okay, we're okay and trainings okay, it'sprobably the minute you're starting to fail. So you know, you know, todealerships out there listening or anybody in the, the uh, oh am world, Iwould say keep training. Uh, please don't stop, you'll be better for it. Ilove that. Um, I have one final question. I'm curious your thoughts on,we've spoken a bit here about electrification where the industry isheaded, that Nissan in particular is going all in in that direction and Iknow you've probably had your fair share of these conversations, likeyou're about to roll your eyes when I ask about chip shortages, but I waslistening to your recent interview on Fox News and you spoke about or, oractually they kind of ask you about the impact of, of the chip shortage. Um,and you had spoken to that effect of the impact that it has had on allautomakers, I can only imagine that moving all in on electrification meansa heavier dependence on chips, microchips, computer systems, all ofthose sorts of things. Have there been any conversations perhaps internallyabout how to mitigate this type of scenario from happening again in thefuture? Yeah, absolutely. I mean, this...

...isn't the first time that the industryhas been hit with, uh, supply shortages or our supply chain difficulties.That's true for I think all the VMS, including Nissan, a robust globalsupply chain is always needed. And we continue those conversations, you know,we're really reinventing Nissan from the ground up, change the business,change the culture, change the product and we've done a great job on theproduct side and center in the road, New Pathfinder, new Frontier, allcoming at us uh, and selling well in the market place. In fact, we justlaunched the only frontier and we've changed business um, in many differentways. Uh, and then changing the culture is all about, changing the people andthe attitudes and within, you know, changing the business. Um, and changingthe culture is the supply chain piece that you've taught you you've askedabout and we're certainly looking and examining our supply chain really everyday to make sure that that it can deliver what we expect and uh so thatwe can deliver a product, the consumer that's that's safe, that's reliable andaffordable as well. Um so I would say it's an ongoing process every day. Uh,certainly uh this shortage has opened her eyes up to some gaps in terms ofthe robustness and we're working hard to correct those. And so, you know, thechip shortages affecting us, it's affecting the entire industry. We'restarting to see the light and climb out, but it's it's a long climb out and notjust for our industry for some other industries as well. Yeah, and I canonly imagine just from an organizational perspective how manyplates are spinning at once to navigate a scenario like the such as this whereperhaps where the rubber meets the road at the dealer level or at the retailindustry side of things. There's no way for us to actually know all of thethings that are crossing your desk that factor into this. But I can onlyimagine um there are things that we don't understand, It always interestsme because I don't get the opportunity often to to meet with executives suchas yourself at the O. E. M level. Um but I can only imagine that there theremust be instances where it's like okay guys, but you're not thinking aboutthis. No, we are not here against you. We are not trying to destroy, you know,retailed because that's, you know, humans are absolute beings were likehave a little toothache and we're like, oh, I got job cancer or something likethat, right. Um, and that certainly tends to be the case from what Iobserve where the rubber meets the road. They don't anticipate all of the thingsthat you guys are dealing with at your level and it translates down here at,well they just want to get, this is just another ploy to get rid of thedealer now. Yeah. Like what are your thoughts on that? Well, you may recall,I think I said it and it was in one of the interviews that did recently. Ithink it might have been with Stuart Varney and Fox. Uh, I referred to as aRubik's cube and you know every day, um,...

...the sales operations leaders here inour supply chain leaders are meeting to discuss where the chips go. But it'sreally interesting because it's not about chip, just going to a factory andthen getting put in a car and we got a car. The chip goes into a module. Getchip gets built, goes into module, goes into a component, goes into assemblyand maybe 12 weeks or you know, 14, 15 weeks later that may end up in avehicle someplace and it's not just that one chip, there's other chipscoming from another direction, in another component. They've all got toarrive at the same time to build and if you're absent one or two or three, youcan't build that day and maybe you have to close your plants and you know thatthere's been some plant closures along the way as a result of for everyone inthe industry. So it's a, it's a Rubik's cube. We work every day, we roll up oursleeves internally and then working with our suppliers who have beentremendous in this, uh, in the shortage to figure out exactly where those chipsneed to go so that we can all bring the exact same spot at just the right timeto build a car so far. We've been pretty successful. They supply, um,certainly lower than it's been in many, many years and that has somedisadvantages, but it also has some advantages as well. And uh, you know, Iwould say our, we've been able to keep up mostly, but uh, I think the industrywill be stronger for all of this man. Yeah, I love it. Well, I am sofascinated by you and so delighted that you were able to join me here on thedealer Playbook podcast and I want to thank you for your time today. Mike.Thanks so much for having me and, and let's catch up on that otherconversation later. Yeah, yeah, I'm Michel Cirillo and you've beenlistening to the dealer Playbook podcast. If you haven't yet pleaseclick the subscribe button wherever you're listening right now. Leave arating or review and share it with a colleague. Thanks for listening.

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