Nissan bets big on India for light trucks

Nissan Motor Company is betting big on India for its light commercial vehicle plans, according to Mr Hideto Murakami, Corporate Vice-President (Global LCV Business Unit). The joint venture with Ashok Leyland is a critical part of that strategy.

“From my point of view, India is a very important market for Nissan going forward and we need to do well here. Thailand, Indonesia, Brazil and Russia will also be the other growth drivers for the company,” he told Business Line recently.

Nissan's LCV business unit is barely eight years old but is expected to generate big numbers in the coming years. The product range does not go beyond eight tonnes.

Perfect synergy

In India, the company has launched the Dost pickup, which is part of the segment where the Tata Ace rules the roost.

“We needed a good partner for this market especially when we did not know it too well but still had to make a presence. This collaboration with Leyland has helped us with faster product development,” Mr Murakami said.

Nissan brings in the technology while its local ally helps out with the costs and marketing. “In my view, the synergies are perfect,” he added.

The mini-truck market momentum began with the launch of the Tata Ace, which prompted companies like Piaggio and Mahindra & Mahindra to follow suit with competing products.

In contrast, Leyland has been relatively late, but the tie-up with Nissan could see a faster ramp-up in new launches. The fact that the Ace doubles up as a people's carrier (ditto for M&M's Maxximo) will also translate into attractive growth avenues for the Dost.

Global hub

Keeping this in mind, India has the potential to play a bigger role for Nissan's LCV business in the future where it could even emerge as a key global hub. The building blocks are already in place, especially a robust supplier base, which is critical from the viewpoint of costs.

However, Mr Murakami reiterated that it was still too early to think so far ahead as it was important to first generate the volumes in India.

“For the time being, we want to build a strong foundation here over the next three years. It is only after that can we even consider exports to neighbouring countries,” he said.

Things could, of course, get a fillip with free trade agreements, especially within the ASEAN region, and this is where countries like Thailand have an edge.

Despite this, India could still export LCVs to Africa and Latin America in the not-so-distant future once the big numbers are in place. The fact that the yen is proving to a “big headache” could compel automakers like Nissan to look at more viable manufacturing bases like India.

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