Mitsubishi unlikely to get India boost from Nissan

Murali Gopalan Mumbai | Updated on January 20, 2018

NISSAN   -  Reuters

Synergies in ASEAN region will make more sense

For over a decade, Mitsubishi’s presence in India was marginal and confined to a technical alliance with Hindustan Motors. The facility at Thiruvallur near Chennai has a capacity of 24,000 units and doubled up to assemble Isuzu Motors’ vehicles till recently.

Now with Nissan in the driver’s seat, will this help Mitsubishi leverage its rather marginal India operations comprising products like the Pajero? For the moment, this does not seem even a remote possibility. In the first place, Nissan is just about getting its product and retail act in place, which leaves little scope to include Mitsubishi.

Even going forward, this is not likely as it has been proven in the past (Tata-Fiat is a case in point) that joint retail efforts hardly help the cause of either manufacturer. This was also the reason why Daimler did not rush into bringing Chrysler products to India since there was a risk of brand dilution.

More importantly, Mitsubishi has virtually zilch interest in India going by its 2014-16 mid-term business plan where its priorities are clearly in the ASEAN region. Mitsubishi had targeted sales of over 3.5 lakh units in these five regions in 2015, going up to nearly four lakh units this year. The product portfolio driving this growth would have largely been pickups, sedans and SUVs.

It is this strong ASEAN presence that will appeal to Nissan which is as keen to grow its presence here. The ASEAN Free Trade Area will also allow Nissan for free flow of components at zero duty levels which makes perfect sense in this alliance which will see joint efforts in purchasing, vehicle platforms, technology-sharing, plant utilisation and so on.

Mitsubishi’s mid-term plan also focused on growth potential in China, Russia, North America and Europe though these were on modest scales vis-à-vis the more buoyant ASEAN region.

Since India just does not figure in Mitsubishi’s roadmap, it seems rather obvious that the company did not see too much potential here.

The only strong Japanese brand here is Suzuki, while others like Toyota, Honda and Nissan are struggling to make a mark. In this scenario, Mitsubishi has concluded that India made little business sense.

Yet, there is no telling what may happen in the future once the free trade agreements with ASEAN gather momentum.

Likewise, a more robust Nissan may just decide to bring in select products from the Mitsubishi stable except this is not likely to happen anytime before the end of this decade.

Published on May 12, 2016

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