There's an interesting market above Nano's that we can address: Carlos Ghosn

Interview with Executive vice-president, Nissan

Japanese auto major Nissan Motor Company today unveiled the Datsun Go - the first off the line of vehicles under the resurrected "Datsun" brand to the world. Nissan Motor Company executive vice-president Andy Palmer and the key man for CEO Carlos Ghosn's new strategy in emerging markets, tells Sharmistha Mukherjee and Surajeet Das Gupta how the ‘Nano’ experience made the company steer away from the $2,500 car and why its relationship with Bajaj Auto to develop a small car failed making them put their bets  on the ‘Datsun’ brand to grow market share by ten-fold over the next three years. Edited excerpts:

Carlos Ghosn had earlier envisaged developing an ultra-low cost car tagged at $2,500 to bring affordable mobility solutions to the masses. What made Nissan re-think the strategy?
Your strategy is as good as your first experience. We learnt from the Nano experience. Undoubtedly, the car you see today is the first and not the final one in the entry segment. We have not reneged our intentions to go into the low price market. The Micra starts at Rs 3.5 lakh. The Datsun, on an average, will play below that with many cars. But I don’t think we will go to Rs 1-1.5 lakh price bracket. There is an interesting market above that we can address.

Why did your deal with Bajaj to make a low cost car fail? Will you get into qudricycles market?

The Bajaj deal is finished. Our reason for not pursuing the arrangement was that we are a car company and cannot be defined by a four-wheeler. Cars come with a lot of safety features and are aspirational products. We are not interested in quadricycles.
India is a country of youth and a significant proportion of this rising middle class are below 35 years of age.

In our opinion, people are not aspiring to buy a cheap motor car but are looking for a product which will represent their position in society. They need an entry-car to be reliable and trust-worthy. Datsun is all about trust. You need to earn that trust. When I see the scenario of all other ultra-low cost cars, one has to question their reliability.

To meet your price levels , you need to localise very heavily. Have you done that?
Datsun Go will be 100% localized. To reach the price levels we are talking about, it has to be locally manufactured in India, Indonesia, Russia. We are not 100per cent local content, some parts will be passed through other countries but we will be as close to 100% indigenization levels as possible. The Micra is 94% localized, the Evalia 85%.

Why is that you did not badge the new products as Nissan and went for a different brand in Datsun? Did you think these products would dilute your Nissan brand?

The origin of any brand is ownership and trust. The only reason for having a different brand is that with Datsun we made a slightly different promise. Nissan cars go all the way up to $130,000 from $5800 (Micra at Rs 3.5 lakh). Nissan stands for leading edge in innovation and will create excitement.

It has a tendency to be price premium. This is not compatible with the goal of Datsun in fulfilling dreams of personal mobility. But that does not mean in any way that it is a low-quality brand. Everyone knows Datsun is Nissan. We had the brand for 50 years. In India, Datsun cars will be sold through Nissan investors.

Nissan has not made much headway in terms of its various car products in the country. Do you expect Datsun to be bigger than Nissan in India ? 
Datsun has accessability to people by virtue of price positioning. The India society is moving up. Nissan has grown every year. Last year, we sold 37,000 cars. This year we will sell 80,000-100,000 units. We launched Evalia in 2012, we recently did a facelift on the Micra, brough in Micra Active.

We will soon have a product in the fast growing compact sports utility vehicle segment. We are growing our network. To have 10% market share by 2016, we will multiply our distribution three times. The Renault-Nissan Group is the third largest in the world. There is no way we will let Nissan fail in India.

Do you need to add capacity as you are looking at launching ten new products by 2016?
In August, we increased our capacity to 4,00,000 units. We expect to sell more cars in India. We were relatively late in entering the market. We set up an international hub to derive economies of scale by utilizing our capacity well. But ultimately, we expect the unit at Chennai to be the principal plant for India. The proportion of domestic sales and exports (they exported  around 99,000 cars )  is changing.

Are you going to use a new or use the old platforms for the Datsun?

The Datsun cars are brand new models. I don’t think Indian public deserve old models. India is a key market for us.