This story was first published in The Straits Times on June 26, 2007.

SINGAPORE - Auto honcho Carlos Ghosn is wary about mergers and acquisitions (M&As) yet remains open to an alliance with an American carmaker.

"I'm a little sceptical about M&As in general," said the man credited with the only successful modern alliance in the motor industry - that between France's Renault and Japan's Nissan. "The concept of an M&A is usually very good; the strategy is well analysed. But there is always an underestimation of the complexity and difficulty of execution."

Here for the World Economic Forum, Mr Ghosn, chief executive of both Renault and Nissan, said M&As are typically "5 per cent strategy and 95 per cent execution".

He refused to comment specifically on the recent collapse of the Daimler and Chrysler merger, but said "it's never easy when you have a company dominating another company or a company buying over another company".

"You're trying to make different cultures work together, different staff work together," he told The Straits Times in an exclusive interview yesterday. "That's why you have so many failures; not so much because of the strategy, but the execution."

Yet he believes the Renault-Nissan partnership - the French firm owns 44.4 per cent of Nissan - can be expanded. And despite failed talks with General Motors last year, he said it was smart for the alliance to include an American manufacturer such as Ford or General Motors.

"If you want to expand the alliance, the only place to do it that makes sense is North America," he said, adding that Renault is strong in Europe and Nissan in Asia. "And it is logical deduction it will be expanded with a North American partner."

But he said to do so is not on the immediate agenda: "Our stakeholders - both in Renault and Nissan - today consider that more of a risk than an opportunity. We have to concentrate on our own business now."

After taking the helm of a near insolvent Nissan Motor in 1999 and turning it around in less than three years, his new goal is to revitalise Renault by 2009 and to sustain Nissan's growth.

"Once the milestones of Renault's commitment for 2009 are reached, and with Nissan's expected strong showing in 2007, we will feel much more comfortable," he said, explaining that shareholders would then be more inclined to go for another partnership.

"They (shareholders) know that we have the competitive advantage in terms of alliances...we are the only alliance which has worked. When you have something which is working, something unique, you want to expand it."

Turning to Asia, he said Nissan's regional plans need to be accelerated. "We did not do as much as we should. We need to localise our products more. We need to do more local engineering in order to work with the suppliers here.

"And we need to coordinate more what we are doing in the different markets here."

Nissan has made Thailand a global production base for pick-up trucks. It has also started exporting Thai-made Nissan Tiida (Latio) passenger cars to Australia.

"Thailand is a low-cost export base...the intent is for Thailand to grow and export to Singapore," said Mr Ghosn, adding that Indonesia would also emerge as an export hub for the region.