Putting Datsun back on track is a tall order for Nissan

In July last year, Carlos Ghosn, CEO of Nissan Motor, announced the beginning of a new chapter in the Datsun story as he introduced the Datsun GO.

From Ghosn’s point of view, the affordable Datsun GO was the ideal fit for emerging markets like India where price played an important role in the eventual buying decision. In addition, the low penetration levels of 15 cars per thousand people in this country presented an enormous opportunity for this affordable compact.

Ghosn said Nissan was betting big on India where it hoped to have a market share of 10 per cent in the mid-term. The Datsun brand would be the key growth lever to make this a reality and could contribute to over 60 per cent of sales. It was also conveyed loud and clear that the brand was not cheap and, on the contrary, stood for good value for money. Its tagline of dream, accessibility and trust had been carefully thought through and was intended for the rising Indian middle-class with monthly incomes above ₹40,000.

Andy Palmer, former Executive Vice-President of Nissan, who was also present at the event, stressed that the Datsunwas a brand new car and “not something that is going to be palmed off” after being used elsewhere.

Fast forward to the present and the Datsun is a story of a script that has gone completely awry. The GO was launched in March this year and sales have been little to write home, averaging barely 1,500 units each month. Will it go the Nano way, the people’s car whose price tag caught Ghosn’s eye, and become almost irrelevant?

Guillaume Sicard, President of Nissan’s Indian operations, certainly does not think so, insisting that there is a long-term vision in place.

“We need to do our homework more aggressively. I have just returned from Japan and can state confidently that we have some exciting things planned over the next few months. It will make us stronger and people will trust Brand Datsun even more,” Sicard says.

What Nissan knows only too well is that the GO competes in a category where Maruti and Hyundai are the lead players. Hence, explains the India chief, it is only natural that it needs time to grow the brand in this ‘unusual market structure’ where nobody has yet succeeded in getting a fair share. “Our priority is to increase customer confidence in the GO and ensure this is sustained over time. Success is not going to come overnight,” Sicard says.

This explains why Nissan insists it has a long-term vision for India which translates into a 15-20 year timeframe. It will also give the company enough time to evolve its strategy and get over a host of prevailing hiccups.

Sicard has already identified some priority areas which need to be addressed on a war footing. These include better marketing communication, creating a stronger customer connect, increasing the retail network across the country and improving the quality of dealerships and customer interaction. It is going to be a lot of hard work for sure but he is willing to wait.

It is, of course, a million dollar question if Indian customers will be as patient and if the Datsun brand can endure this long process of putting the building blocks in place all over again. The market has given a second chance to companies which goofed initially. Fiat is a case in point which blew a huge opportunity with the Uno but struck the sweet spot with the Palio some years later.

However, times have changed since then with more players entering the market along with a growing base of young and smart buyers who know what they want in a car. In fact, it was this trait that Palmer spoke of at the Datsun unveiling in New Delhi last year. “We are very much focused on the retention of today’s youthful Indian customers. Given that a bulk of them is under 35, it translates into a wonderful opportunity for us,” he said.

Even for a diehard optimist, this would seem like a pipedream at least for now. Sicard and his team have also had to deal with the negative publicity on the Global NCAP (New Car Assessment Programme ) report on the GO which dismissed the car as substandard and sought its removal from India. Yet, he is confident that Nissan, with its large basket of products, can tide over the crisis and bounce back eventually. It is going to be a long haul ahead.

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