Japanese car maker Nissan’s twin brand strategy in the Indian market, where it sells cars under and brands, struggles to find a growth path. The smallest Japanese car brand in India by sales saw volume drop by eight per cent, when the market clocked an eight per cent growth.
In its attempt to establish and grow the budget Datsun brand, the flagship brand Nissan appears to have got clearly left behind. The last volume product under Nissan brand, the Terrano, was launched in 2013.
Incidentally, both Nissan and Datsun brand saw sales decline during FY18 in the domestic market. The Datsun brand, which has been the focus of the car maker in last four years, now brings three-fourth of local sales and Nissan, the flagship brand gets a volume of just about thousand units a month.
Together, the two brands clocked a local volume of 52,796 units in India, which gives the company a market share of 1.6 per cent and puts it at the ninth position in the Indian market.
Datsun is a four year old brand in India while Nissan entered India in 2005. Jerome Saigot, managing director at Nissan Motor India, said the Datsun brand was unveiled in India five years ago and actual sales started a little over four years ago. “In this country, this industry, a four-five year brand is nothing. The journey since inception is already a big achievement. We have launched three products,” said Saigot, counting names of the Datsun GO, GO+ and the redi-GO.
The company believes the Datsun journey is just beginning in India. “We are not competing against competitors who have been here for 20-30 years. We have many things to deliver. We need to do things differently. If we follow what others did in last thirty years it will take us as many years to reach that level,” Saigot told Business Standard.
Saigot, who has now spent little over four years in India, said he was surprised after his arrival that Indian car buyers had almost no choice below sub Rs 300,000. Irrespective of falling sales, he believes that the pricing of Datsun brand and the low ownership cost will help it build volumes in India. “With Datsun we want to have a challenger position...where will you get a Japanese car with such low ownership costs,” asks Saigot.
Saigot finds some comfort in the declining entry car statistics at the industry level. Talking about Datsun’s performance, he said it is not growing at the speed desired by the company. “I would like to grow faster than this. It takes time. We are learning. We are talking to first time buyers who are extremely pricing sensitive,” he adds.
Irrespective of the recent performance of Datsun, Nissan is ready to put more resources behind it. In the next eighteen months, the number of standalone Datsun outlets will be doubled to around 200 and expansion will happen in tier II and III locations. Talking about positive feedback from Datsun owners, Saigot said the best publicity in India happens through a word of month. “When I am the only one driving a Datsun in my society I have to be brave”.
Is the Nissan brand ignored? No, said Saigot. “We have plans on the Nissan front to accelerate. It is true that as of today the product line up is a bit old. We have a plan and in few months you will see a new Nissan car on roads”. The Kicks SUV, due for India launch later this year, will be the first Nissan product after a five year gap. Terrano SUV was last mass product. Saigot said the company now has a clear plan and product line up to support the two brands. Before Kicks, a new product is also planned under the Datsun brand for the festive season.
We will have to establish both the brands which is challenging as well as a fantastic opportunity for us and our dealer partners as well, said Saigot. Nissan management, in the past, have talked about a five per cent market share in India by 2020. A rough calculation shows that the company will need to sell as many as 200,000 cars in domestic market to command such a share. That looks a tall task at the moment. But Saigot is confident. “I can tell you that we will go much above the two per cent. We have a much higher ambition than two per cent. It will take a bit more time than expected. In next three years, we have a product expansion plan. I can’t disclose the number of products. But we have a plan to support the growth”, he said.