Nissan Motor is likely to leverage India as an important production base for its foray into Africa.

According to Toru Hasegawa, Corporate Vice-President (Africa, Middle East and India), this business model is a strong possibility going forward as the company starts to work on a strategy for Africa. This is where the Datsun brand will also play an important role for Nissan.

“Africa was quite far away for Japanese companies at one point but the situation has changed now. We are studying this market very carefully as countries here also need low-cost cars. The challenge for Nissan is to provide Africa with the best and most cost-effective model,” Hasegawa told Business Line during a recent visit to India.

India’s role The company believes that India could play an important role in the Africa growth story. It is already a big export hub for Nissan with cars made in Chennai heading out to over 100 countries worldwide. The Datsun Go, which was made here from scratch, is further testimony to the frugal engineering skills available in India which can be used to meet similar customer requirements elsewhere.

From Hasegawa’s point of view, issues like durability and trust in brand image are important parameters for Africa. Datsun, he added, epitomises these values and could fit the bill comfortably. “People in Africa know what good cars mean and merely providing cheap options will not work. Indian products are already assured of quality and costs and using these strengths for Africa is a nice thought,” he said.

A beginning will be made during the course of 2014-15 when the Datsun Go is shipped out of India to South Africa, a prelude of perhaps bigger things to come. Russia and Indonesia will also be production centres for the brand but India may end up playing the more important role as it has a robust supplier base which assures top quality at competitive costs.

Nissan is betting big on emerging markets for growth in the future which pretty much puts in focus the significance of Datsun. After all, the car penetration in India is barely 15 per thousand people, which is not only substantially lower than the West but also lags behind neighbours like Indonesia where cars are bought by about 40 per thousand customers. In 2018-19, the volumes in India are expected to be in the range of five million units which translates into a huge opportunity for Nissan.

Future plan “Our vision to grab an eight per cent market share globally by 2017 cannot be conceived without growth in emerging markets like India. We are aiming to be a major force here and the goal is a 10 per cent market share for the Nissan and Datsun combine,” Hasegawa said. Free trade agreements will doubtless help in the Asia-Pacific strategy considering that similar cars are made in India and Indonesia under the Datsun umbrella. It will help boost business for suppliers here but this is still some years away in becoming a reality.

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