“Car makers have not delivered the full potential of the 800cc to one-litre class”

Vincent Cobee, Datsun brand chief and Corporate Vice President, Datsun Business unit in Nissan Motor Company has been a busy man. During the past few months he has spearheaded an internal team that has fussed over the revival of the Datsun brand and has developed a brand new hatchback that will be the first car to again sport this badge.

The fruit of all that labour will be unveiled in the form of a final prototype early next week in Delhi, where Carlos Ghosn, Nissan’s CEO will be at hand to showcase what he envisioned as the company’s version of a frugally engineered, low-cost car for markets like India.

Cobee spoke to Business Line about his assessment of the current market and how he plans to market the new sub-Rs 4 lakh small car from the revived brand, which may not have high recall amongst the younger buyers of today.

Q. How do you plan to tackle the issue of a new brand like Datsun being brought in here, because India is sensitive to brands and this is a new brand worldwide, not just for India?

A. There are 3 or 4 aspects here. The first one is that you need to be convinced that your offer is attractive. To me it’s the case with the new car and a must have. The second is you need to be consistent. But, I am not saying that it is a guarantor of success. We know very well that the target customer is a high aspiration new car buyer. That he is of a different nature versus a repeat buyer in terms of purchase pattern, but also in terms of information gathering.

We know the importance of word of mouth of friends and families, and of, I would say, purchase experience. So, that is a pointer to you about how we want to tackle this brand issue. We will have to roll-up our sleeves and go into every market, city and environment to demonstrate the value proposition – to walk the talk. And I think it is both fair, and in a country like India, necessary and effective.

But you also need to walk down the path of, I would say, nearly one-to-one communication. In country as big and vast as India with more than a billion people, one-to-one is a bit of a challenge, but clearly it gives you an idea about the magnitude of the task.

I don’t think just putting a car in the Delhi Auto Show next year will be sufficient to create awareness. But what is necessary for me, because of the newness of the brand and because of the value proposition, but also because of the location and influences of the Indian customers that create this growth, is I need to go where they are and need to present this value proposition, convince and reassure this customer and present to him more than a product. I need to offer an entire suite of service and sales experience which is consistent with the product.

Q. Do you believe that the sub-one-litre class of cars that we have in India now is under exploited?

A . There are some variations country to country or even region to region in terms of use, which translate into size, but also average speed and range of the car. And there is the capability of the engine too. If you put all of these together, and if you also include the technology employed at a reasonable price, the answer is somewhere in between a 800cc and a 1,000cc.

So, I am absolutely convinced that the potential of the 800cc to one-litre engine has not been fully tapped. I am quite convinced that this is going to be a soft spot for A and B segment cars in India. I’m not saying A alone, but I’m saying A and B, because you can achieve good acceleration, speed, great fuel economy and the right cost in this kind of displacement. Below 800cc, you either deteriorate max speed or you increase cost. Above one-litre, yes you get a different type of car and obviously different experience in all these parameters.

So, if you ask me what are the sweet spots, I believe it is somewhere between 800cc and one-litre, there is one somewhere around 1.2 to 1.4-litre and then there is the 1.6-litre and above. I think those three will exist, but I’m not so confident below the 800cc.

I believe we as car makers have not delivered the full potential of the 800cc to one-litre class of cars as of now. What you have had in this class up till now are either downsized versions of the one-litre or 1.2-litre engines from the portfolio, and so they become too big or too heavy, or they are enhanced versions of 660cc engines you see in Japan and so they are sub-optimal solutions. You don’t have that many real 800 to 1,000cc engines built from scratch, and optimised for performance in that class.

And so even before we go on to put more technology into the cars in this segment, I am not sure that the full potential has been exploited.

Q. Do you view the current market conditions in India as a challenge for a new brand and a new player like Datsun or do you see this it as an opportunity, one that can be exploited by a newcomer?

A. There is a lot happening at the same time in the Indian market currently. There is a lot of competition between car makers. But you also see a lot of complex product introductions. There is a diversification and ‘complexification’ of the product offering in India, some of them are honestly a bit difficult for me to understand and I believe there is mixed success amongst these. This has an impact on the total industry volume.

There is also an impact from the fluctuating fuel prices. I guess you also see a lot of changes from the political and social front at the same time and the global crisis also has its impact. So, there is no single explanation to what is happening in India today.

But, first we don’t go into a market because of the current economic condition. We believe India is a growing economic power and is a growing car market. And I don’t think there is any lens through which it will be different.

Number two we do believe that we will bring a superior and attractive value proposition and at the end of the day the customer is smart. The last point which is very complex, but necessary, is that we are addressing an emerging middle class in fast growing economies. This is never going to be a smooth ride. If you want a predictable and no-surprises social and economic environment, you are talking about countries which don’t grow in the western world. I think we need to be ready for this. That’s the way these economies will work.

I am not at all concerned about the short-term outlook for the auto industry in India.

Q. Will you be trying to leverage Datsun’s history and heritage in India in anyway?

A. I think we are connecting the Datsun values of the past and those of tomorrow. The existing heritage in India is very specific and it is not such an easy asset to leverage. Of course, we welcome the existence of that imagery. But that is not one of the key strategies of our communication.

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