Nissan pins hope on Datsun to crack Indian market

Japanese carmaker Nissan Motor Company on Monday announced the global re-launch of its century-old brand Datsun brand, which had been suspended 27 years ago. In India the company unveiled its first model - the Datsun Go - which will hit the Indian market early next year.

Targeted at the middle-class, especially first time car buyers, the five-door 1.2-litre hatchback Go will be priced below Rs 4 lakh in India. The return of the Datsun brand marks a shift in focus for Nissan towards the emerging markets. Carlos Ghosn, President and CEO of Nissan Motor, says that the auto market is in a transition phase globally. "Five years ago, mature markets such as Japan, the US and Europe contributed to 60 per cent of car sales, the remaining 40 per cent sales were made in high-growth markets such as China, India, Brazil, Russia and Indonesia. We expect this ratio to reverse by 2016." Nissan is planning to sell Datsun in Indonesia, Russia and South Africa from next year.

Ghosn says India offers huge potential for Nissan, since it has low penetration of cars compared to other markets. India has 12 cars per 1,000 residents whereas US has 800, mature European markets 500, Russia 280 and Indonesia 70.

With the launch of Datsun, Nissan is expecting its market share in Indian markets to go up to 10 per cent by 2016, up from 1.2 per cent now. "Datsun will significantly contribute to this growth," says Ghosn. Nissan, which now operates three brands globally, has plans to launch 10 new models in India in the next three years.

Datsun Go, which will be produced out of a new Nissan-Renault factory in Chennai, was fully engineered in India using local resources and suppliers to ensure that the product suits local market conditions and preferences. The company has plans to manufacture all new cars locally in order to reduce factory-to-market time and bring in cost efficiencies. "We are growing our dealer network and will use local talent to grow in India," says Ghosn. Nissan currently employs 12,000 people in India.

As it happens, the Datsun brand, originally launched in 1914, is being re-launched at a time when the domestic auto market has been performing poorly. Last month, the sales of passenger cars dipped for the eighth consecutive month to 139,632 units, down nine per cent from the corresponding month last year.