Nissan Motor Company showcased the Datsun Go, a hatchback that will be priced below Rs. 4 lakh, in New Delhi on July 15. Sources close to the process stated that the Go hatchback is a part of Japanese auto maker's overall plans to gain a stronghold in the market, in particular, the compact car segment. One of the cars will be priced as low as $4,000 (Rs. 2,40,000), on the condition that Nissan can meet its ambitious cost targets. The auto maker is slowly moving closer to the ultra-low-cost car segment, which has been currently dominated by the Tata Nano, a car that only carries basic components and is priced between Rs. 1,50,000 and Rs. 2,20,000.
Nissan introduced the Datsun brand in India and has similar plans for other emerging markets like Indonesia and Russia in the pipeline, as well. “We try to keep the price positioning for Datsun competitive, so that products are appealing” to the bottom half of the auto market in India where Nissan is still lacking with the range of products offered”, Nissan's Programme Director for Datsun, Ashwani Gupta, said in an interview.
The move, however, has not been adhered till now by other auto giants. Toyota Motor Corporation, the well-appreciated auto maker, opted out with concerns that an unkempt, ultra-cheap car model could tarnish their premium brand image. Top executives from Toyota, which include current Chairman Takeshi Uchiyamada, turned down a chief engineer's design for a low-cost emerging market car a few years ago, reasoning it was too cheap to be considered a Toyota brand, an executive from the engineering department said.
Since then, the car has undergone some design modifications and was finally released in Indian market in 2010 as the Etios sedan, starting at Rs. 5,45,000. A hatchback version of this model was also launched in 2011, with a starting price of about Rs. 4,50,000. “We're serving different customers" with Datsun, said Tatjana Natarova, a Datsun spokeswoman. “That's why we came up with a different brand.”
In order to make the Datsun cars affordable, Nissan has aimed to keep manufacturing cost to $3,000 to $5,000 per vehicle. With the Go hatchback ready to hit Indian roads early next year, the company claims that it has partially achieved the cost targets. Although, as cost-competitive as that may be, it will still face stiff competition from the likes of Maruti Suzuki and Hyundai Motor, which together form two-thirds of India's passenger car market, excluding Sports Utility Vehicles (SUVs) and vans.
Retails stores shared by Maruti and Hyundai among themselves amounts to 1,550, with 1,200 and 350 stores, respectively. On the other hand, Nissan has only about 100 dealers, though, it says the auto maker plans to increase its by three-folds by March 2017.