July 15 is a big day for Carlos Ghosn when he unveils the Datsun at its world premiere in New Delhi.
The revival of a brand, which was consigned to the archives three decades ago, is only part of the story. From the Nissan CEO’s point of view, it is the make-or-break product for emerging markets.
The sub-Rs 4 lakh Datsun has been earmarked as Nissan’s entry car for India as well as Russia and Indonesia. Ghosn, who also heads Renault, believes that these countries are critical growth drivers for the future. To satiate their needs, it is important to offer products that offer the ideal mix of price, mileage and design.
Even before the Datsun journey, it was the Tata Nano that caught Ghosn’s eye. The fact that a car could actually be made at a competitive price of Rs 1.5 lakh prompted him to try out something similar for Renault-Nissan in India. Thus was the ULC (ultra low-cost) car concept born in an alliance with Bajaj Auto. Ghosn was only too aware that price played an important role in the buying decision for a car especially in markets like India. Yet, the goal of Rs 1.5 lakh was ambitious, something that successful small carmakers like Maruti-Suzuki could not achieve. On the other hand, the Nano showed this was possible.
The script for the ULC gradually started falling apart when it was all too apparent that the partners were not on the same page. The Nano was also not doing very well and it was clear that customers wanted something beyond the Rs 1.5 lakh price tag. While Maruti’s Alto continued to clock big numbers, Hyundai threw down the gauntlet with the Eon except that its launch coincided with waning customer interest in petrol cars thanks to cheaper diesel.
Despite this, Maruti hit the bull’s eye with the aggressively priced Alto 800. Customers made a huge beeline for this sub Rs 3 lakh car even while the craze for diesel shifted to the premium hatchback segment where models like the Swift and Figo made merry. None of these market trends was lost on Ghosn and his team when the Datsun project was formally announced three years ago.
The baby is now ready though it will hit Indian roads only in 2014 followed by Indonesia and Russia. It is reasonable to expect an introductory price of Rs 3.5 lakh to create that magic level of market excitement. However, the more important aspect is the retail end where Nissan will have to pull out all stops and ensure that customer satisfaction is optimal.
Alliance partner, Renault, is also working on its own affordable car project though this will be in the premium hatchback space of Rs 4.5 lakh. Nothing has been finalised yet though reports have been doing the rounds that it could debut by 2015.
For the moment, though, Ghosn’s top priority is the Datsun. Its success is imperative to take his company’s growth story forward in emerging markets. Renault’s first entry sedan, the Logan, did not click in India and was unlucky to be in the midst of excise duty changes. The ULC did not work on the desired lines and it is now up to the Datsun to weave the long-awaited magic.