Japanese automaker Nissan’s new compact SUV Magnite with an aggressive price tag of ₹4.99 lakh (ex-showroom) may well decide its fortunes in the country.
In March 2010, after inaugurating the Renault-Nissan combine’s car manufacturing factory at Oragadam near Chennai, Carlos Ghosn, then Chairman & CEO of the Alliance said the group was poised to play a significant part in India over the next 10 years. A market share target of 10 per cent was set (including that of Datsun brand).
Ten years later, its partner Renault has managed garner a market share of about 4 per cent in the crowded Indian car market. But Nissan’s journey has not been impressive. Its market share in passenger vehicle market is less than one per cent.
Nissan fumbled its India strategy due to several reasons. It tried to play the “cost/price” game rather than playing to its strengths. Also, itscommitment was not seen as serious enough to the Indian market, which was growing so rapidly with different segments and evolving technologies.
Its business model of partnering with a 3rd party for sales and service, which are usually critical for an automotive company also backfired.
Customer interest
“In the past, Nissan had lacked a key model that could excite the customers for a fairly long period. Also, the delay in model launches was quite big like the gap between Terrano to Kicks. This in turn led to a vicious cycle of dealer profitability suffering, which in turn led to shutting done of outlets, adverse effects on service standards, etc. which hurt customer service and the brand even further, says Ashim Sharma, Partner & Group Head Business Performance Improvement Consulting at Nomura Research Institute.
“Nissan SUVs are globally recognised and have been a core driver for its success. Nissan has realised that it has to stick to its original identity rather than trying to follow others. Hence, now it's making an attempt to recreate itself in India. So, if the Magnite has the same DNA, then it should be a strong product. Even its pricing is pretty aggressive, so it's expected that it will do well,” says Suraj Ghosh, Principal Analyst-Powertrain Forecasts, IHS Markit.
With its aggressive pricing, first in class features, the Magnite has ticked many of the boxes. However, the sales success after the initial launch phase will hinge a lot on expansion of sale and service outlets beyond the major cities so as to tap into the vast rural and tier-2 city demand and that of course coupled with the service quality will be vital for success.
Global portfolio
The company has exhibited renewed commitment by ramping up sales and service network ahead of the new vehicle launch.
Initiatives such as virtual test drive, new express service, etc that Nissan has started will certainly help boost sales. Nissan has great products in the global portfolio and at some point, the India product strategy would hopefully include some of those products, says Sharma. Magnite is the `make or break' product for Nissan in India. The company desperately needs a top selling model to remain invested in the India growth story.