Bruno Mattucci: "No car company makes money with electric cars"

The car industry is getting used to living with uncertainty. To the stoppage of business due to Covid, which closed the dealerships, the microchip crisis and problems in the supply chain have been added. Nissan, the Japanese car manufacturer, expects the Spanish market to recover this year, although it will not return to normal until next year.

Its manager in Spain, Bruno Mattucci -general director of Nissan Iberia- explains that automobile companies do not make money from the sale of electric cars, although, in his case, he assures that they do not lose it either. He also acknowledges that the closure of the Barcelona factory had an impact on his local sales, although Catalonia is now his best market, by volume of sales, in all of Spain.

The coronavirus crisis and the problems with microchips have led to a difficult situation for car manufacturers. How do you see the Spanish market?

The year 2021 was impacted by the Covid and then by the problems in the supply chain and the semiconductors. The market is below one million cars sold, which we believe is the minimum there can be in Spain. In 2022, the situation will improve, especially in the second half of the year, but to return to the normalized production level we have to wait until 2023. We, at Nissan, are checking all component suppliers. We see that some can already recover 100% of their production and others are at 60% or 70%. And we are adapting our range of models, to make versions of cars that can use components from suppliers that are already 100% complete. In this way, we can increase production.

Where are the problems now? In the microchips?

Yes, basically in the suppliers of electronic components, such as screens or electronic units. It is the most critical issue, the electronic components.

At the end of 2021, problems began with freight, with maritime transport. Is the situation normalizing there?

Yes, it is normalizing but we have to see the effect of the new crisis, the war in Ukraine. We do not know what the impact may be, but it is clear that we are entering a complicated context, where the cost of raw materials is going to rise, the cost of energy will rise and the logistics, too. And all of this has an impact because the expectation is of inflation in our market and we know that when prices rise, demand has a negative impact.

And how much can the price of cars go up?

Inflation in our sector has been around 4.5%. I think this year we will be at a similar level.

There are already car manufacturers, such as Volkswagen, that have announced that they will stop producing and marketing cars in Russia. Has Nissan made any decision?

No, at the moment there is no decision made. Nissan's latest announcement is that we are assessing the situation to see what to do.

But they make in St. Petersburg

Yes. We have a factory in St. Petersburg and we have a sales unit in Russia, but for now there is no decision. If it is taken, it would have no effect for Europe because it is a plant that only manufactures for the Russian market.

In this situation, with the problems due to the lack of components. If I now go to a dealership to buy a car... How long does it take to deliver it?

We have an average delivery time of four months, but it depends, because we have focused production on the versions that can be manufactured. If a customer is looking for a version that is among the ones we have produced, we can deliver the car in a month and a half or two months. In the most equipped versions, the waiting time is around five months. The goal is to produce the versions where the providers can help us. But we are optimistic. Normalcy is not achieved in a day.

In recent months, advertising by car manufacturers on television, which are usually among the largest advertisers, has fallen. Will it recover again?

We are a company that at the end of the year has to look at the income statement and, if we don't have cars and we can't invoice, it is clear that we don't have the possibility of investing as in the past. The moment we return to a normalized situation, the brands will invest again. It is a vital investment, to make customers aware of the brand and products. We cannot live without advertising and the automobile sector anymore, because we live on novelty. A brand is successful if it has the ability to develop novelties. And the novelty has to be communicated.

The development of the sector is in electrification, in electric cars. How do you see this process?

All brands are working on a future where 100% of cars are electric. There we have been pioneers, because 12 years ago we launched the Nissan Leaf, the first 100% electric car for the masses. The issue is how to manage the transition. Today there are electrified, gasoline, diesel and hybrid cars on the market and the challenge is that, in 2035, only electric cars will be sold. 2035 is very close, it's been 13 years and we have to change people's culture. Today the demand for electric cars in Spain is 5%. Only 5 out of 100 people buy an electric car, you have to move the remaining 95% and it's not easy. For our part, we have to increase the capacity to produce electric cars and we are making a massive investment in England. But this is not enough, we have to develop a recharging infrastructure, otherwise it is impossible. And in Spain we are late, much more than other European countries.

Spain needs to install about 36,000 chargers a year to meet the goal of reaching 340,000 in 2030. Do you think we are doing well?

If we continue with the speed we have now, no. It is a mathematical calculation, if we project what we are doing now in the 12 years to come, we will not fulfill it. We have to accelerate the development of the recharging infrastructure and also communication to make customers change the chip, so they understand the advantages of moving to the electric car. What do you see today? Where can I upload it? They do not know. And they look at the price, which is higher. And those are two issues where we have to work with the Administration. We have done the most. Today, no car company is making money from electric vehicles, none. Some lose.

Does Nissan make or lose money on electric cars?

We are in 'break even' [ni pierden, ni ganan]. We are a house that started in 2010 with the electric ones, we have a history; but I am convinced that the companies that are now starting to sell electrics are losing money.

And as for the recharging structure, who has to provide the chargers, the Administration, the electric companies?

You have to look at the countries that have developed electric mobility the most. They have done two things. First, develop the reload structure. Then, help customers to move to the electric car by giving them advantages, such as reduced taxes, that they can park without paying, that they can enter the city center without problems. They are measures for which a consumer says "I pay a little more but I have a whole series of advantages". That works. There are plans here, like Moves, but some communities applied it late, dealers were also unclear on how it worked. And then, in a community you have some rules; in another, different ones. It is difficult for us to manage the implementation of a plan when you have a lot of different local rules.

Do they speak with the central administration, with the 17 communities…?

You have to talk to many different administrations. I am Italian and I have lived there too. The political will is clear but administrations should reduce bureaucracy, simplify it. It is already difficult for a citizen to move to an electric car, because he is used to a mobility model that is different. He doesn't have the problem of where the gas station is, where the workshop is. If more complications are introduced later, it is very difficult to develop electric mobility.

With skyrocketing electricity prices, is there more reluctance when buying an electric?

No. If we look at the pure electric sales data, they are going up. It has gone from 3% at the beginning of 2021 to exceeding 5% in December. But you have to speed up. It is true that we have the problem of the rise in the cost of energy and that the electric vehicle today has a higher cost, but we have to go to a new model of electric mobility. We can think of a car not just as a vehicle, but as a store of energy. The car is charged, parked, connected to the network and provides energy. In Holland or England, with the Leaf it is already being used. There are drivers who have contracts to rent their car batteries to electric companies and earn 800 or 1,000 euros a year. Here the 'Vehicle-to-Grid' can be done, technically it is very simple, but it is a political issue.

Currently, which are the countries where the electric car is most developed?

Norway, where electrics are 75%. Then England, which is 12%, and Germany and France, which are above 10%. Italy and Spain are at the tail.

So if I had to bet. Will the goal of stopping selling combustion cars be met by 2035?

It is very difficult. What I see as impossible is the other objective, which is 100% of the park in 2050. That is mathematically impossible. We are in 2022, we are 28 years old. A million cars a year are sold here and we have a fleet of 30 million cars. If tomorrow morning we start selling only electricity, we need at least 30 years to have the entire electricity fleet. And we are not going to start selling only electric cars tomorrow.

And when does Nissan consider selling only electric?

For us, 2030 is the year in which we would like to sell only electric cars, but we also have to look at customers and markets. If in Spain, in 2035, customers ask for a gasoline car, we have to produce it. We are connected to what the demand says, the market, and if we don't work on changing the consumer chip, it will be difficult.

Speaking of the consumer chip, Nissan has been in the news in the last year due to the closure of the Barcelona factory. Has consumer perception of the brand changed? Is it perceived differently?

At the beginning, yes. Unfortunately, consumers understood that Nissan was going to leave Spain. What was being talked about was the closure of a plant in a global context of reorganization of Nissan's production.

But it was the only car factory in Spain

We have many countries where we don't have plants, but we sell cars. Unfortunately, the closure was understood as the cessation of Nissan's activity in Spain. Then, we work on communication with the dealers. We explained that we are going to close a plant, which is a shame, but Nissan's commercial operations in Spain, in Europe, remain. And we have a product development plan that we have never seen in the past. Nissan continues to invest in Europe, which is one of the most important markets for the company, and Spain, too. With the Barcelona Show, where we present our products and our plans, we have begun to recover. And now Catalonia is where we have the best sales results in all of Spain

What weight does Spain have for Nissan?

It is his second country in Europe, behind England. It is one of the most important markets.

Do you consider having more factories here?

I can't decide there, that's on another level, in Japan.

And how does the Spanish consumer see Nissan?

We are more or less in what we call 'mainstream'. We are recognized as the ones who invented the 'crossover', the leader of the medium 'crossover', but we have to enrich the logo with brand values, because we have an idea of ​​the future that is more modern than most. For example, we have a program to give batteries a second life, circular economy plans. We have plans that we have not told consumers and they do not see added value in Nissan. That is a challenge that we have in the future.

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