Leon's legacy

WHEN Nissan ceasedbeing a local carmanufacturer in October1992, scepticism aboutthe company’s future inAustralia was rife.

Leon Daphne, at thatstage a rookie managingdirector who had taken over the reins in August1991, must have suspected what was in store ashe made the trip to Japan where he was to be toldof the parent company’s intention to dramaticallyreduce its Australian operations.

Daphne, a long-time Nissan employee who hadjoined the company in January 1983, was deputymanaging director before his elevation to MDstatus.

Under its previous Australian managing director,the fl amboyant Ivan Deveson, the battle for survivalhad been fought in earnest but the seal was put onits demise by the less-than-successful shared-modelPintara/Corsair plan with Ford Australia.

Now, under Daphne’s direction, the companywas to face a future as an importer, joining the likesof Mazda and Honda as a second-string player tothe remaining local manufacturers.

Despite scepticism here and abroad, Nissan hassince Daphne’s appointment not just survived – ithas flourished.

“We went into operating profit reasonably soon(after full-importation) but we still had high debt.”

Daphne recalls.

The Nissan story, from around 1995 onwards,has been one of steadily increasing sales backed upby a climbing share of the market, from 3.7 per centin 1995 to 6.7 per cent in 2003.

This is a long way from the heady days of localmanufacture in 1977, when Nissan produced127,754 vehicles. But the bottom line today is ahealthy profi t and a year-to-date number four spoton the Australian market – ironically ahead of thebeleaguered Mitsubishi Motors Australia, which isfighting to remain as a local manufacturer.

Speaking to Daphne at the recent launch of thelatest Sport versions of two Renault models, theClio and the Megane, was a reminder of perhapsthe only thorn in the company’s side.

The Renault operation has been under-performingmore or less since Nissan took up localdistribution in 2001 and remains a problem to befixed. Daphne declined to discuss it at any lengthas he has now handed over the controls to RudiKoenig, who was previously Renault’s localdirector of operations.

But he does point out that the global revitalisationof Nissan was a product of the alliance with Renault,headed by Renault executive Carlos Ghosn, who hadalready made his mark in the French company.

In Japan, Nissan had been bleeding badlybefore Renault took a 36.8 per cent stake in1999, but drastic measures taken by Ghosnworked quickly, to the tune of a recordprofit in 2003.

Locally the situation is something of areversal, with Renault the struggling partner.

From ambitious plans at Renault’s 2001 relaunch(the brand was last handled in Australiaby Volvo), the talk is somewhat more conservativethese days, more to do with brand building thanachieving big sales. But Daphne sees a clear placefor Renault within the Australian framework.

“Sales volumes are not going to rise dramaticallyany time soon, but new product will help– especially the image-building Renault Sportrange,” he says.

The increasing number of European makesentering the higher-volume sections of our marketrequire an importer to be on the ball, not only interms of sales force and marketing strength, but alsoin the competitiveness of the product. Renault hassuffered through stop-start attempts to re-establishin Australia, and the problem is to convince localbuyers the brand is back to stay.

“It has been difficult because Renault has beenso much in and out of the market. It got off to aflying start initially (with 4565 sales, 2002 wasRenault’s best sales year since 1978), but has beenaffected by the increase in the number of recentchallengers,” says Daphne.

On the Nissan front, the story has been one ofuntrammelled success.

In a market that hasgrown by just under 52 percent since 1995, Nissan hasrecorded a growth of slightlymore than 144 per cent– better than Toyota, Holden,Honda or Mazda.



“From 1997 onwards,from the introduction of thenew GU Patrol, which gavethe company a big lift, therehas been a steady successionof new product that hashelped in the recording ofa record profit for 2004.”

Daphne says.

Clearly the company isin good shape – except forRenault sales – and is just asany retiring chairman wouldlike to see it.

Today, Daphne saysthat being asked to take onthe managing directorshipin 1991 was a highlight ofa career that has includedmore public roles, such as hispresidency of the Richmond Football Club from 1993 till 1999, plus variousother positions including his recent chairmanship of the National MotorVehicle Theft Reduction Council.

Daphne, now 63 and who suffered a health problem last year, says he is ingood shape and looking forward to an active retirement that will take in not just his first recreational love – golf – but also tennis.

“Initially I will be looking for a more leisurely lifestyle, although I’ll maybedo a little charity work. I’ll be spending more time with my wife Kerry, ourfour children and five grandkids. I’ve missed out on some of this so far,” hesays.

“However I’ll miss the excitement of corporate life, especially the people Ihave associated with over the years.”

But most likely Leon Daphne’s enduring memory of his stewardship ofNissan will be the segue from car manufacturer to importer – a massive anddifficult task that was managed in a way that has drawn general admirationfrom within the industry.

The company’s financial success in the following years speaks for itself, butthere was also the people factor – the dislocation of a not insignificant numberof employees who worked in the Clayton plant where Nissans were built.

“A lot of people respected the way we managed the closure,” he says.

“We feel we treated it with a great deal of responsibility and sensitivity.”