Nissan to introduce Datsun brand by launching a car costing below Rs. 4 lakh

Monday 15 July 2013, 11:52 AM by

Japanese car maker Nissan Motor is starting its attempt to revive the Datsun brand by entering the low cost segments of the emerging car markets. Datsun, a brand owned by Nissan, is going to make a comeback after a period of 32 years in the Indian auto market. Nissan is set to reveal the Datsun hatchback, a car that will be priced below Rs. 4 lakh, in the national capital, New Delhi. Following the launch of the Datsun hatchback, Nissan has plans to soon launch other models as well. The Japanese auto maker is trying to match the aggressive manufacturing cost policies, which would result in the introduction of a vehicle that would be priced a meagre Rs. 2,40,000.

Nissan to introduce Datsun brand by launching a car costing below Rs. 4 lakh | CarTrade.com
Nissan to introduce Datsun brand by launching a car costing below Rs. 4 lakh

Nissan aims to facilitate the revival of Datsun by initially making forays into markets like India, Indonesia and Russia. After gaining prominence in these markets, the company plans to expand to Southeast Asia, the Middle East, Latin America and Africa. Nissan Motor is planning to raid the ultra low cost market in India, which is currently occupied by the Tata Nano, a vehicle ranging between Rs. 1,50,000 and Rs. 2,20,000.

Ashwani Gupta, Programme Director for Datsun, said that the company is trying to keep a competitive price positioning for Datsun. He added that this is being done to lure customers from the lower portion of the Indian car market, which has a few Nissan cars competing, as well. According to company plans, Nissan will sell Datsun cars through its existing dealerships in India. Some industry experts feel that this move could expose risks to Nissan, a possibility that has been categorically denied and played down by officials from the company. Officials feel that Nissan's brand image will remain intact as the company is using a different brand name. The history of Datsun dates back to the 1930s when it was used for selling cars outside the Japanese territory.

“We're serving different customers” with Datsun, Tatjana Natarova, a spokeswoman from Datsun, explained. “That's why we came up with a different brand,” she added later. Nissan has paid a lot of emphasis on reducing the cost of production per vehicle to increase its affordability. The Japanese car maker aims at clocking a cost reduction rate ranging between $3000 and $5000 per vehicle. According to the claims of auto maker, the goals pertaining to reduction of the cost have been achieved partially with the firm set to launch its first car next year.

“To achieve low manufacturing costs, the Datsun product team designed and engineered cars so that nearly all the components needed to build them could be procured within India” Ashwani Gupta said.

No matter how competitive the pricing of Datsun cars is, experts say that it will still face lot of obstacles locking horns with the likes of passenger car market leader Maruti Suzuki and Hyundai. The Indian car market is mainly controlled by these two auto makers, which have a two-thirds share in the passenger car segment, except Sports Utility Vehicle (SUVs) and vans. Nissan has set itself a target to capture a share of 10 per cent in the Indian car market by March 2017. This 10 per cent share would include sedans, vans and SUVs. As per statistics till May 2013, Nissan has a share of below one per cent.

It can be noted that the auto maker is treading a path that has been declined by a lot of auto makers in the past. Entering the ultra cheap model segment, as seen by many auto makers, is a move that has been considered a potential threat to the brand's value. One such name that immediately comes to mind is Toyota, which refused to sell the design of a low cost vehicle, calling it too cheap to get the brand's name. However, the same car underwent a lot of changes and was finally launched as the Toyota Etios sedan in the Indian auto market.