Nissan bets on Datsun again to crack India's small car market

Company hopes Datsun's Redi-Go will help arrest falling sales and boost its market share

Nissan Motor Co launched a compact hatchback from its Datsun stable in India on Tuesday, its third attempt to crack the country's small and low-cost car market where it has struggled to make a dent.

The Japanese carmaker resurrected the Datsun brand in 2012 to try to capture share in emerging markets such as India. Starting in 2014, the first two cars it launched have not sold in large numbers, however, due to lack of awareness about the brand and fewer dealerships than rivals, analysts say.

This time, Nissan says it is doing things differently.

The carmaker will use digital and social marketing to raise awareness of Datsun, Guillaume Sicard, president, Nissan India told reporters at an event in Mumbai to launch its Redi-Go car.

To reach more buyers it will sell and service the Redi-Go from 274 Nissan and Datsun outlets across India. It has also partnered with after sales service provider MyTVS to reach buyers in smaller towns and cities.

"Datsun is very new in India, just two years old, so we need to improve awareness. We need to communicate more and we need to get more cars on the road," Sicard said.

With India expected to become the world's third-largest car market by 2020, Nissan hopes Datsun's Redi-Go will help arrest falling sales and boost its market share.

Nissan's sales dropped 17% to 39,389 vehicles in the year to the end of March and its market share fell to 1.4% from nearly 2% a year ago, industry data showed.

Redi-Go's top model in Mumbai will be priced at 348,845 rupees ($5,224), making it the cheapest among competitors such as Renault's Kwid priced at $5,598 and market leader Maruti Suzuki's Alto K10 with a top price of $6,628.

Even though there is high demand for low-cost cars in India, very few global carmakers have launched such cars on fear of being perceived as a cheap brand.

Nissan would also need to work hard to dispel perceptions of cheapness associated with Datsun cars in India, said Puneet Gupta, associate director at consultant IHS Automotive.

"Datsun is on a real backfoot in India," said Gupta, who feels Nissan would have had more success launching Redi-Go under its own brand, which is comparatively stronger.