Nissan to go deeper with Datsun and own footprint

The resurrection of the Datsun brand will have a bigger impact on Nissan Motor Company's fortunes in India than other markets. The global roll-out of the first Datsun car, GO, was done out of the Renault Nissan Alliance Plant at Oragadam, near Chennai.

In a country that is ruled by small cars, fuelled by an ever-swelling middle class, Datsun is expected to fit right in. With Infiniti and Nissan already catering to upper and mid sections of the market, respectively, Datsun would let Nissan India take on top-selling models from Maruti Suzuki and Hyundai Motor India.

To consolidate its move to grow its market, Nissan recently terminated its marketing and distribution agreement with Hover Automotive India, its Indian partner, and took on these duties itself. Kenichiro Yomura, Nissan president, India Operations, had then said, "Nissan is now at a point of maturity in India where the time is right to establish our own marketing and distribution operations."

Reviving Datsun after nearly three decades, Japan's second-largest car manufacturer had called it 'a jewel that was sitting in a closed room'. Nissan expects 50 per cent of its overall sales in India to come from Datsun by 2020. The Datsun Go, teaser ads for which are on air, will join Nissan Micra as an entry-level car.

According to Vincent Cobee, in-charge of Datsun's revival and corporate vice-president, Datsun Business Unit in Nissan, all the Datsun models will be priced below Rs 4 lakh. Cobee says, "We need to re-invent the way we develop, engineer, position cars and how we define the brand."

Globally, passenger car market is expected to double to 100 million units by 2020, with two-third of the demand from coming from markets outside US and Europe. The main driver would be the middle class, that will have its first car as a major aspiration.

Developed a century ago in 1914, to cater to the emerging middle class in Japan, Datsun's DAT means 'lightning-fast' in Japanese. It was also promoted as durable, attractive and trustworthy (DAT in short). While Nissan's cars would continue with their global antecedents, Datsun would be a more localised product.

Cobee says, "In B-segment hatchbacks, where Datsun will be positioned, there have been some product rejuvenations recently, but no product innovation. Some of the models launched in the last two years have gone through the roof, only to come down in sales in the last three-four months. So, where do people go back to? They go back to awareness, trust, reliability and functionality".

Initially, Datsun's products will be sold through Nissan's dealerships and serviced through a common network. But Datsun would have its own set of dealers eventually, says Cobee. Of Nissan's forging out on its own, Cobee says, "When the company is facing the increasingly challenging task of launching new brands, it is better to go direct."

Nissan has got around 100 dealers, which would not change, and it plans to take the number to 300 in the next three-four years. Analysts say that with this move, Nissan stands to save Rs 4,000-5,000 on each small car by doing its own marketing and distribution.

Cobee says that the foremost challenge is creating awareness with the potential customer base of around 200-300 million in India: "No matter how good your product is, if they don't know about your product then there is no use. So, my ideal situation in two years is the product is confirmed by the market as a superior value proportion and second, to achieve a level of awareness among this emerging middle class".