Nissan plans to increase its presence in emerging markets such as India by popularising its low cost brand Datsun. Nissan Motors' Chief Executive Officer (CEO) Carlos Ghosn decided that the growth of the company needed a focussed strategy, after observing that China has been coming up fast to overtake USA as the world's top car market. Among the new vehicles, the first Datsun would be codenamed K2, which is to be priced below Rs. 4 lakh and would compete against rivals from Maruti, Hyundai and General Motors India. While the global premiere of the brand will be held during July in Delhi, the first model would be launched in 2014. In total, five models are being developed for the emerging global auto markets.
Commenting on the Datsun project, Vincent Cobee, Global Head of the Datsun project for Nissan said, “He (Ghosn) asked me if I could give it a shot. We saw China explode. We realised something was happening and we weren't prepared for it.” Cobee was a former Programme Director for the V platform, using which vehicles such as Micra and Sunny have been built by Nissan.
Considering the view of auto experts, several reasons have been pointed out for Nissan launching Datsun in the emerging markets. One of them is that growth in BRICS (Brazil, Russia, India, China and South Africa) countries is depended on the sales of these low cost brands, which is being bought by a new class of customers. Unique needs of these customers can be addressed only by a separate group of car models. The other reason is that regulatory norms of countries such as United Sates cannot be followed in third world countries. The strategy would be to decrease features, but at the same time, not eliminating those that are necessary in the emerging markets.
Datsun cars are now being resurrected, after being phased out. The special features of this brand would be that vehicles would display modern styling, be affordable, offer high fuel efficiency and lay great emphasis on durability and safety, along with low cost of ownership. Nissan has now realised that it needs mainstream products in order to thwart competition from top companies such as Maruti Suzuki India. It has also been observed that strategies for no two emerging markets would be exactly the same, which means that each country would have to be looked at independently. An example of this is the Chevrolet Beat, which was being developed with inputs from all emerging markets, but became a compromised product in the end, as per V Ramakrishnan, Managing Director for Frost & Sullivan India.
However, Nissan would need to make sure that there is no brand confusion between itself and Datsun, since Nissan has just about managed a certain presence in India. Commenting on the same, Mohit Arora, Executive Director for JD Power (Asia Pacific), said, “When Nissan itself is not an established brand here, bringing another brand may add to the confusion.” The other issue would be that the country is already full of affordable cars, so getting another brand with the same strategy will be quite a challenge.