The Dealer Playbook
The Dealer Playbook

Episode · 8 months 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 changing and modern car dealers are meeting the demand. I'm Michael Cirillo and together we're going to explore what it takes to create a thriving dealership and life in the retail automotive industry join me each week for inspiring conversations with subject matter experts that are designed to help you grow. This is the dealer playbook. Mhm Yeah. Mhm Good. Yeah. On this episode, I'm glad to be joined by someone who has vast industry experience working in various om roles including group vice president of Infinity America's chairman of Infiniti Motor 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 the dealer 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 world did I do to deserve this, this uh, this interview and I'm so excited you're here. Um, I do have one question to kick this off. You know, since your days working at Saab automobile and cadillac to present. I'm curious about what shifts you've witnessed or experienced in the industry up to this point and whether or not there was any sense that those shifts or pivots were coming as you were working in those various roles. Okay, um that's, that's great and, and for someone that's been in the industry for 30 some odd years and actually, if you go back even further in my career prior to some military service. I grew up in automotive family. So I've seen a lot of those shifts and uh, uh, you know, probably the one that is the most impactful is the one that you're seeing right now and, and you know, we're seeing that shift clearly from what has been for the last 100 years, internal combustion engines to uh, to electric vehicles and alternate, uh, powertrains. And uh, and that shift has been, I think extremely transformative for the industry 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 the Lehman shock and uh, and how that started to transform the industry as well. Uh, and the transformation wasn't so much in terms of product was more in terms 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 extremely high fixed costs to, you know, much more, uh, leaner approach to the business and a more global approach to the business. And we saw that with platforms, uh, starting to be uh, common ized and utilized across a larger, a larger space. Then, of course, even in between that, you saw the transformation as we started to move, um, I would say in the us more towards a more european platform, which, or, or landscape, which was more, you know, let's dance. Um, and smaller smaller vehicles and then of course the transformation with SUVs coming in as well. So a lot of transformation over the years? Uh, and, but the one that we're, that's in front of us right now is, is probably the most transformative and we'll have the longest lasting impact maybe for the next 100 years. Hmm, interesting. It's funny you say that to, I was actually shocked. I had a speaking engagement in Holland a few years ago and it was interesting to see, as you say, there's the european differences where even, you know, say for example in north America, if you work in agriculture is pretty common that you're going to be driving a pickup truck or something that, that effect. But as you say, the difference there is, they were all driving like cube vans and you know, smaller vehicles. And I also thought it was interesting. I remember we were headed to a conversation with some of the, the leaders at Peugeot automaker and we passed the Tesla factory and I said, this is interesting and they said that's what all the taxi drivers dr here, you know, it didn't have that same, you know, appeal as it did here. So I think that's really interesting and 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'm curious as you've experienced all of that, What do you believe from your vantage point mike, what do you believe the highest priorities for retail dealers should be Looking forward to the next 3, 5, perhaps seven years. Yeah, without a doubt, customer service delivering a world class customer experience I think is going to be one of the key differentiators, uh, for our dealers in a world where, um, fixed costs again, um, there's a lot of pressure, downward pressure, uh, as it needs to be fixed costs. Um, the challenge will be delivering that incredible world class experience and still being able to control fixed costs. We know that the move to electrification 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 I said, that world class experience and I...

...think that will be the biggest, biggest challenge 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 sales standpoint, but certainly from a service standpoint. And there's been a lot of discussions around that. Um, some alarmist and some would say more moderate as, uh, E V still need to have work and consumers will have other opportunities as well, uh, within the v space, and dealers will be able to leverage that opportunity, uh, and create new streams of revenue. Um, and, uh, and, and dealers will need to transform to some extent and we'll certainly see it within our own industry. I mean think about it, you know, we've been 400 years primarily relying on mechanical engineers and now we've got to rely on chemists and electrical engineer so completely rethinking the business from top all the way through. And uh and dealers, I think that will stand out will be the ones that deliver just world class, unapproachable customer experience. I think this is so amazing. You know, we recently did a study. It's kind of an ongoing living study at this point, but of all of the call it 500 plus interviews that we've conducted now over the 7.5 years when I asked business leaders what should dealers be focused on? I would say a high percentage of them echo your sentiment and I think it's for for good reason. You know, we don't get to have the same vantage point that someone sitting in your seat does. And so to hear it from you just adds extra validation around the importance of customer service. I do have a question on the back end of that, which is, you know, as you've been discussing E. V. S and and the shift towards that and and the pivot from mechanical engineers to chemists and, you know, electrical and all of those sorts of things. Can you give me a sense and you get, by the way, the DPB listeners know that the guests can say Cirillo, you need to just shut up because 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 m at automaker level, is there a delay on, you know, I'm thinking in my gut, I'm trying to think of the best way to ask this mike, is there a delay between when 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 community always has like, where did TVs come from? Are you seeing this years in advance? Like, hey, we got to move in this direction or, or is the automaker kind of in that same boat where we're...

...like, oh man, we got to, we got to start 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 the industry, uh, they kind of realize that as we see it, we've been preparing for electrification for many years. We came out with the Leaf 10 years ago, we have five billion km driven and 500,000 vehicles on incident free, uh, miles driven by our all electric Nissan leaf. And so our dealers are ready for electrification. They've been expecting it. I don't think anyone's been caught off guard. You know, certainly the change in the political landscape and ultimately the move to E. V. And a cleaner environment, which we completely support was anticipated. Sometimes though it's, it's hard to judge the speed of the movement. Um, and, and we know that there's different ways, you know, the consumer will move at a speed, the industry will move at a speed. 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 well positioned on the heavy side. No question about it. We're all in. You may 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, with Sunderland 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 in less 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 the industry transformed into a cleaner, more renewable industry. I'm really glad that the Nissan execs saw my feedback request that I have a daughter named Aria and that you should absolutely name a vehicle. Well, our chief marketing officer has a niece named Aria and, and we think that that's actually maybe where it really started. But it's a great story. It's too long for today. But uh, yeah, it's really cool. We've been confused a couple of times with the hotel. Uh, but, but something completely different. So we're super excited to bring that to market and we start our reservation program 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 aria sitting in my driveway for aria. Well let's get her on the list. Yeah, we'll have to get her on the list. It's funny you say that too because I remember when I was first, they, I think they had just built that aria hotel and we were expecting, uh, my daughter and it...

...was actually my first ever paid speaking engagement was at the aria. And when, when I came home, my wife said, I think we should name her aria. And I said, you know, everybody's gonna say that I named her, We named her aria because of, for some reason my first game with and uh, that, that never came true. That's just me manifesting nothing. Um, I want to touch on something that you had mentioned earlier. Um, just quickly in passing and, and that was your time in the military. I first want to thank you for that. Um, but it also brings up something that I think is really interesting you having served as a marine corps captain, um would understand way better than I do the marine motto of semper Fidelis and I'm wondering if that experience has had an impact or particularly around that model or that motto rather has that had any impact on your leadership style and how you create um culture and workplace environments. My great question 100% yes, um semper Fidelis, always faithful um uh, never lost those ties to my past and still stay close to the, to the past as well, but certainly helps me every day. Uh you know, probably at a base level, the discipline that you get from military service I think serves you well in a corporate environment I think in a business environment uh for sure, but you know, I was challenged my team to lead from the front, you can't lead from the chair that I'm sitting in right now, but it's not where you need to lead from, you need to lead from the front, be present in the industry, as we say in the japanese business walk the Gamba, which is to be there with the front line troops. Um and uh, and then I have philosophy as well as training as train your people well and then let them run, people will always amaze you and they always surpass my my expectations. But uh, and this is a watchword for, for all leaders I think inspect what you expect. Uh and if you do those things, um you typically tend to be successful. So you know, I see my military service as a booster to my career um and there's really not a day that goes by where I don't draw on some experience from my past to to improve our future. I think this is, yeah, I think this is so tremendous. I mean I have 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 and I'll pick your brain. But something you said really intrigues me because I believe in it so deeply as I've built my business and we've placed emphasis on the training and process implementation and and kind of developing that muscle within people. I...

...know this is something that some leaders struggle with which is thinking that the training they've offered is adequate, but then also being quick to fire people without, you know, perhaps internalizing did I do my part, how do you, how do you navigate that as a leader? How do you balance that so that you do have a genuine sense of whether or not you empowered or got in the way of an individual from performing at their best? Well, you know, individual performance, talk to talk about, but from a standpoint, you know, when you think about the group and 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 training maybe more important now than ever if you think about what we talked about earlier and move to electrification. Um, uh, there's a, there's a, there's a deep need, uh, to, uh, in my opinion, train even more things like autonomous drive 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 are definitely working very hard in that area in terms of training to ensure that consumers get the absolute best delivery that they possibly can and with 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 hard in that area. So you know, I, I, there's no substitute for training. I think the minute that you say okay, we're okay and trainings okay, it's probably the minute you're starting to fail. So you know, you know, to dealerships out there listening or anybody in the, the uh, oh am world, I would say keep training. Uh, please don't stop, you'll be better for it. I love that. Um, I have one final question. I'm curious your thoughts on, we've spoken a bit here about electrification where the industry is headed, that Nissan in particular is going all in in that direction and I know you've probably had your fair share of these conversations, like you're about to roll your eyes when I ask about chip shortages, but I was listening to your recent interview on Fox News and you spoke about or, or actually 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 all automakers, I can only imagine that moving all in on electrification means a heavier dependence on chips, microchips, computer systems, all of those sorts of things. Have there been any conversations perhaps internally about how to mitigate this type of scenario from happening again in the future? Yeah, absolutely. I mean, this...

...isn't the first time that the industry has been hit with, uh, supply shortages or our supply chain difficulties. That's true for I think all the VMS, including Nissan, a robust global supply 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 the product side and center in the road, New Pathfinder, new Frontier, all coming at us uh, and selling well in the market place. In fact, we just launched the only frontier and we've changed business um, in many different ways. Uh, and then changing the culture is all about, changing the people and the attitudes and within, you know, changing the business. Um, and changing the culture is the supply chain piece that you've taught you you've asked about and we're certainly looking and examining our supply chain really every day to make sure that that it can deliver what we expect and uh so that we can deliver a product, the consumer that's that's safe, that's reliable and affordable 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 of the robustness and we're working hard to correct those. And so, you know, the chip shortages affecting us, it's affecting the entire industry. We're starting to see the light and climb out, but it's it's a long climb out and not just for our industry for some other industries as well. Yeah, and I can only imagine just from an organizational perspective how many plates are spinning at once to navigate a scenario like the such as this where perhaps where the rubber meets the road at the dealer level or at the retail industry side of things. There's no way for us to actually know all of the things that are crossing your desk that factor into this. But I can only imagine um there are things that we don't understand, It always interests me because I don't get the opportunity often to to meet with executives such as yourself at the O. E. M level. Um but I can only imagine that there there must be instances where it's like okay guys, but you're not thinking about this. 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 like have a little toothache and we're like, oh, I got job cancer or something like that, right. Um, and that certainly tends to be the case from what I observe where the rubber meets the road. They don't anticipate all of the things that 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 the dealer 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. I think it might have been with Stuart Varney and Fox. Uh, I referred to as a Rubik's cube and you know every day, um,...

...the sales operations leaders here in our supply chain leaders are meeting to discuss where the chips go. But it's really interesting because it's not about chip, just going to a factory and then getting put in a car and we got a car. The chip goes into a module. Get chip gets built, goes into module, goes into a component, goes into assembly and maybe 12 weeks or you know, 14, 15 weeks later that may end up in a vehicle someplace and it's not just that one chip, there's other chips coming from another direction, in another component. They've all got to arrive at the same time to build and if you're absent one or two or three, you can't build that day and maybe you have to close your plants and you know that there's been some plant closures along the way as a result of for everyone in the industry. So it's a, it's a Rubik's cube. We work every day, we roll up our sleeves internally and then working with our suppliers who have been tremendous in this, uh, in the shortage to figure out exactly where those chips need to go so that we can all bring the exact same spot at just the right time to 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 some disadvantages, but it also has some advantages as well. And uh, you know, I would say our, we've been able to keep up mostly, but uh, I think the industry will be stronger for all of this man. Yeah, I love it. Well, I am so fascinated by you and so delighted that you were able to join me here on the dealer 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 other conversation later. Yeah, yeah, I'm Michel Cirillo and you've been listening to the dealer Playbook podcast. If you haven't yet please click the subscribe button wherever you're listening right now. Leave a rating or review and share it with a colleague. Thanks for listening.

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