Nissan’s decision to discontinue its Datsun brand of cars in India, a decade after the revival of the Japanese auto maker’s heritage brand, signals the company’s continuing challenges in cracking one of the largest automotive markets in the world.
In March 2012, Nissan’s then President and CEO, Carlos Ghosn, announced the return of the Datsun brand for ‘high-growth’ markets such as India, Russia and Indonesia, and he indicated that cars under the Datsun brand would be sold from 2014.
Ghosn’s idea was to capture a decent market share with a low-cost (sub-₹4 lakh) brand as its previous small car Micra failed to make an impact in the price-conscious Indian car market. The company unveiled the Datsun GO, the first new model of the brand since 1970s, with a 1.2-litre engine in July 2013.
The first Datsun GO was rolled out of Renault-Nissan Alliance’s factory at Oragadam in Chennai on February 4, 2014. With aggressive pricing in the range of ₹.3.12 lakh to ₹3.70 lakh (ex-showroom, Chennai), Datsun GO was expected to establish its name in the volume segment, dominated by Maruti and Hyundai. After some initial excitement, the new vehicle failed to sustain momentum. The company also came out with an MPV Datsun GO+. In 2016, the company introduced a new hatchback Datsun redi-GO, built on a new platform. In June 2020, the company launched an all-new Datsun redi-GO at an introductory price of ₹2.83 lakh. Despite aggressive pricing, the new vehicle didn’t excite the buyers to fetch good volumes.
Now, Nissan has officially announced that production of the Datsun redi-GO has ceased at the Chennai plant, though after-sales service, parts availability, and warranty support would continue from dealerships for the existing customers.
Evolving market
“The Datsun brand was introduced by Nissan to play in the entry-level segment which used to be a big segment once. But as the market is evolving and customers are shifting to more aspirational vehicles, loaded with tech and safety features, the group may believe that the brand has surpassed its ‘use-by’ date,” said Suraj Ghosh, Director - Mobility, S&P Global.
Moreover, the fact that the brand Datsun didn’t turn out to be a sales chartbuster in any segment validates the move. Also, Nissan is reorienting its global product and platform strategy to accommodate the shift towards electrification. It has to make some prudent investment adjustments, he added.
Of course, such exits by big brands leave a trail of uncertainty and looming losses for partners in dealerships, suppliers and, most importantly, the customers.
Nissan fumbled quite badly in the Indian market as its strategy to play the “cost/price” game rather than playing on its strengths along with other factors such as its business model of partnering with a third-party company for fulfilling its sales and service requirements and a long gap in new product launches, among others impacted it deeply.
Reading the pulse right
But there is some silver lining. The company finally got its calculations right by understanding the pulse of the new-age buyers and changes in customer preferences. Its compact SUV Magnite, launched in December 2020, appears to have ticked many of the boxes for the SUV customers, as it has received a very good response. Nissan has secured more than one lakh customer orders to date for the new compact SUV. Unfortunately, the chip shortage has played a spoilsport for the company as it is facing challenges in delivering the vehicles.
One has to wait and see whether Magnite brings the much-expected lease of life to the Nissan brand in India and creates a base for further growth in the country.