Nissan won't lower entry price unlike Renault

Nissan's present range, which has five models in India, starts at Rs 4.47 lakh with the Micra Active

Japanese car maker Nissan will not follow the path its sister company Renault has charted in India and will not lower the brand’s entry price. With the launch of the Kwid, Renault will enter the sub-Rs 3.5 lakh category, which would be substantially less than its current entry price of Rs 5.03 lakh of the Pulse, a premium hatchback.

Nissan’s present range, which has five models in India, starts at Rs 4.5 lakh with the Micra Active. This is much higher than the entry models of other players such as Maruti Suzuki, Hyundai, General Motors and Tata Motors.

Arun Malhotra, managing director of Nissan Motor India, said, “Nissan has been positioned as a premium brand in India. We have the Datsun brand to cater to that (low-cost) segment and as of now, it will remain like that.”

Datsun, an alien brand to India, however, has not had much success in India. In 2014 calendar year, Datsun, owned by Nissan, could clock volumes of only under 12,000 units of the Go hatchback. This means, less than 1,000 units a month.

Nissan launched Go+, a compact utility vehicle, earlier this year to complement Go. “We have the redi-Go coming up under Datsun,” said Malhotra. The redi-Go will be positioned below the Go and will compete with Hyundai Eon, Maruti Alto, Tata Nano and Renault Kwid.

To make the Datsun brand a success, Nissan is aggressively expanding its distribution reach. It added its 200th dealership on Wednesday. “We have 26-27 dealerships so far this year. In the next 18 months, we plan to add 100 more. With the present dealer strength, we are covering 80-85 per cent of the market and with further addition, we will cover 90-95 per cent,” added Malhotra.

According to Society of Indian Automobile Manufacturers (Siam) data, Nissan registered 25 per cent growth in the last financial year at 47,474 units in domestic sales and 3.4 per cent expansion in exports at 120,331 units.

France-based Renault has not hesitated in lowering its entry price after it decided to change its strategy for the Indian market in the wake of its sales coming under pressure. Despite having a heady start with the Duster sports utility vehicle (SUV), which de-throned the Mahindra Scorpio to become the largest selling SUV in India briefly, the French company lost momentum.

Lack of product excitement has cost the company volumes and market share.

Siam data suggest the company logged sales of 43,384 units in FY15, a drop of nearly 25 per cent compared to the previous financial year. Its market share stood at only 1.6 per cent. The Kwid is aiming at the volume segment led by Maruti Alto followed by Hyundai Eon and Tata Nano. Renault will start delivering the small car by October.