3 future takes from Japan's Big 3: can Nissan continue its comeback? Will Toyota surpass GM in global sales? Is there a Honda fuel cell vehicle in your future?

Leaders of these companies discussed these and other issues at the Tokyo International Automotive Conference.

NISSAN: Straight Talk from Ghosn-shacho. Carlos Ghosn has become a rock star among auto executives by cutting through the clutter. So when he lays out the future plan for the Renault--Nissan alliance it is in emphatic terms, "We will never merge the two companies." Why? "Because my job is to create value and a merger would destroy value." Ghosn holds that the key reason the alliance has worked so well is that Nissan maintained an independent Japan-based corporate culture. "With a merger, the risk that you are going to crash somebody's corporate culture is very high," he says. And even though Nissan's culture was moribund in 1999, Ghosn realized that it still had an identity that was important to its employees. "If you don't respect people's identity, they will not get motivated and you will not get a strong corporate performance," he says, tying human resources' methods to accounting's bottom line.

Ghosn says that the alliance's course will not change. Specifically, there will be more commonized purchasing efforts and vehicle platforms and an increasing exchange of technologies, but he is adamant that the global market strategies of the two companies will remain separate and independent. "We ask every single team not to do anything for the sake of the other teams. Pursue your own interests, growth and profitability. Because you are doing this, you will seek synergies. Don't do things for the sake of commonality or for the sake of the partner, that doesn't work," he insists.

To avoid competitive conflict, the alliance partners have essentially divided up the world between them, with Renault concentrating on Europe and South America and Nissan on Asia and North America. In the markets where both Renault and Nissan are present, Ghosn says there is recognition that "one is the leader and one the partner." For example, in Europe, where Renault has an 11% market share and Nissan a 2.7% portion, the French maker dominates. But in a market like Mexico where Nissan holds over 20% market share, Renault is the partner who must tap into the leader's knowledge of viable segments and niches.

Right now, keeping up Nissan's end of the alliance is Ghosn's sole responsibility, but in April 2005 he will become the head of both automakers and plans to split his time evenly between them. This raises the question of whether Nissan can continue its strong recovery with essentially half a president--even one as seemingly superhuman as Ghosn. He obviously thinks so, but to strengthen the top management of both companies he will step up the exchange of people between Renault and Nissan in an effort to put the right person in the right job regardless of nationality. He says, "I know that it is much easier to have a Japanese person manage a Japanese company and a French person managing a French company, but there is a moment where competence and contribution has to overcome preconceived ideas about national origin."

TOYOTA: Global Number One? "The worst evil is not changing--there is nothing worse than doing nothing." That doesn't sound like the man who heads what many regard as the world's most conservative automaker, but it is. Fujio Cho's basic message to those who still adhere to a stick-in-the-mud image of Toyota: you're living in the past. "We are re-emphasizing innovation," he says. He counters the oft-aimed criticism of boring styling by saying, "We now have a good system in place of design studios and design competitions. I think we are moving in the right direction now on styling and that people are starting to recognize it." Cho points to Toyota's leadership in hybrid vehicles as a further innovation and says that the company plans to increase the hybrid portion of its total production to 10% by 2010.

When asked if all of this innovation will eventually lead Toyota to surpass GM as the top volume producer, Cho looks genuinely surprised and says, "We've never had a goal to surpass GM worldwide in the past and we wouldn't in the future, either." He goes on to say, "When I joined Toyota in 1960 the Big Three were so far above us they were in the clouds. We are finally getting closer to them, but we are still behind them." That's laying it on a bit thick for the head of a company that may soon surpass Ford as global number-two automaker, but Cho does seem to have a genuine admiration for GM. "They have always made the dramatic changes necessary to remain number one," he says.

HONDA: Fuel Cell Future. "We will not be able to cost effectively mass produce fuel cells until the costs come down to 1/1,000th of what they are today." That sobering statement comes from Michiyoshi Hagino, Honda's COO for Automobile Operations. Fresh from an announcement on a breakthrough in fuel cell technology that could lead to lower cost production, Hagino should have been taking a victory lap. Instead, he was pointing out how much work is left to be done. Comparing fuel cell development to other automotive technologies, Hagino says, "It took 10 years for air bag system costs to decrease to one-tenth their original cost." Which would lead you to believe that Hagino thinks fuel cells will not be commercially viable for about a century. Not so. "In 30 years, fuel cell vehicles will be everywhere," he says. But he posits that the rate of adoption will be determined less by technology than by the public's attitude toward the environment, essentially a reverse "Field of Dreams"--if they come, you will build it.