Sub- Rs4 lakh Datsuns to be Nissan’s force multiplier

Nissan has finally thrown down the gauntlet at fellow Japanese carmaker Suzuki, and a host of others.

It announced entry into the mass-volume small-car segment by reviving Datsun, the brand it canned 30 years back.
By 2014, Nissan said it will launch two small cars in the sub-`4 lakh category.

“Datsun will give us an opportunity to enter the mass segment, where we were not present earlier,” said Kiminobu Tokuyama, MD & CEO, Nissan Motor India.

Currently Tata Motors, Maruti Suzuki, GM and Hyundai offer products in the price range.

Nissan has set a stiff target: 50% of the total industry volume in the segment by 2014.

However, experts feel the company is taking a high risk with Datsun. “When they (already have brands like Nissan and Renault, why is there a need to revive an old brand like Datsun.

The company is taking a big risk as customers will not be able to relate to the brand. General Motors faced similar problems when they tried reviving Opel,” said V G Ramakrishnan, director with Frost & Sullivan.

Nissan currently sells the Micra small car, Sunny midsizer, Teana luxury car and the X Trail sports utility vehicle — all are in the mid or premium segments.

“Nissan is entering a segment that is already very competitive and it is not alone. Other players are looking at the segment too. It will also have to match the sales and service networks of Maruti and Hyundai to do well in the mass volume segment,” said Ramakrishnan.

Datsun products will be completely made in India — i.e, have the so-called localisation at 100%.

“We are developing a complete range of unique products, which will be suitable for the Indian market,” said Ashwani Gupta of Nissan’s Datsun business unit.

Starting this month, Nissan has started its second production line at its Chennai facility, doubling capacity to 4 lakh units per annum.
The first two products from the Datsun family will be rolled out of the Chennai plant.

“As of now we will utilise the existing capacity, if the demand goes further up we will look at building more capacity,” said Gupta.
He entry into the mass segment will not be in India alone. As part of a global strategy, Nissan is reintroducing it in Indonesia and Russia too.

As per the company’s forecast, sales through Datsun will contribute to a third or half of overall global sales by 2014.

“With Datsun, we are brining products which are more affordable, modern, generous, fuel-efficient and well adapted to the specific request of the each market. The brand will address the consumers who today are buying used cars or driving motorcycles, because they can’t afford to buy a new car, or when they can afford a new car are buying an antiquated technology with antiquated platform, and we want to bring something much more modern,” Nissan CEO Carlos Ghosn said in Tokyo on Wednesday.

The company previously mentioned that it is mulling a small car with its joint venture partner Ashok Leyland in India. “If those products realise we will look at including them under the Datsun brand,” said Gupta.