Nissan gets set to reboot India innings

When Guillaume Sicard, President of Nissan India Operations, says the company has finally got the hang of the Indian market, you wonder what he is implying. After all, the Japanese carmaker has been around for some years even though its market share is little to write home about.

“There are not so many countries in the world where you need to have a Tier-specific strategy as in the case of India. In Europe, Japan or the US, nobody would understand what Tier 1/2/3 mean,” explains Sicard.

And it is this facet of the subcontinent that his company is finally coming to terms with and planning accordingly. “I am almost convinced that headquarters in Japan understands what India is and what India needs,” says Sicard. “We have made a big step there and now need to prove that for which we will need some years.”

During this time, Nissan plans to step on the gas in expanding its presence in Tier 3 regions, demarcating an urban and rural strategy while analysing various key sectors of the economy.

“If anyone thinks that giving the Indian customer something cheap will work, they are making a huge mistake,” adds Sicard. “What you will see from Nissan and Datsun in the next few years will prove that we have understood what the customer wants in terms of products, presence, network, advertising and so on. We also need to be ready for headwinds as maturing markets go through their share of ups and downs.”

While the going has been rough lately with the Centre’s move to demonetise high value currency, Nissan is on track with its plans for 2017.

It will continue working on improving the quality of its network and focusing on customer satisfaction. It will also increase its coverage in Tier 3 cities where the Datsun redi-GO has been doing particularly well.

“Tier 3 cities represent a third of the market and it is here that we are overperforming in market share thanks to Datsun,” says Sicard. “Our presence is only 60 per cent, which means we need to push it to 80 per cent. In 2017, the focus will be on growing our presence in rural areas.”

Nissan knows that it is important to refresh the redi-GO regularly in terms of powertrain, design and interior changes that explains the relevance of the redi-GO Sport. The coming months will also see the launch of the X-Trail Hybrid, which will be directly imported. As a result, its price will not be the most competitive but the technology on offer “will be unique in terms of hybrid, mileage and a true SUV”.

Nissan also plans to accelerate its India focus on hybridisation and electrification and Sicard hints that there could be some “exciting developments” through the end of the year. The recently launched GTR, he adds, represents the best of Nissan knowhow in the world in terms of dreams, technology and excellence. “It is a good example of what we stand for as a brand,” he says.

From Nissan’s perspective, the market is large enough to accommodate a slew of models as has been proven by carmakers such as Maruti and Hyundai. “We have two brands to do the job; one is Nissan which is global and the best in technology. You then have access to the automotive dream through Datsun which is a good, affordable car,” says Sicard.

Of course, it has not been the easiest of tasks balancing two diverse brands and the Nissan India chief admits the exercise has been “quite painful”. Yet, given that there are customers for both Nissan and Datsun, building better brand awareness is a constant effort.

Over the last couple of months, Sicard has had his work cut out in meeting the challenges post-demonetisation.

Beyond sales, it was as critical to keep an eye on the manufacturing side in the Chennai facility, which is home to the Renault-Nissan alliance. After all, there are 10,000 people working here and the key was not to get into a state of panic.

More importantly, managing stocks was the challenge given that Renault operates in a calendar year while Nissan follows the fiscal ending March 31.

While November and December have not been the easiest of months for most carmakers in terms of retail sales, the challenge is different at the back-end.

“In manufacturing, we just cannot stop the plant all of a sudden. Neither can we keep producing when the market is down. The key is slow down to the right pace. After all, I don’t want to be too short in production and yet not overproduce,” says Sicard.

In these unpredictable times, it is difficult to fathom when the market will look up again.

Apart from this, carmakers also need to be prepared for legal/policy announcements (as in the case of the diesel ban in Delhi) which could prompt them to revisit their production schedules.

From a manufacturing point of view, Sicard believes Nissan is fortunate to have a robust export model in place. “This is the beauty of our business model. If we are losing out in India, we try to maximise exports. I am now trying to work with Europe and the Middle East,” he says.

This year, the Renault-Nissan alliance hopes to have nearly 40 per cent of its business from exports where cars from Chennai are shipped to over 100 countries. “India is still a maturing country, which means it will have its share of hiccups. This only means that you need to have exports on a high,” avers Sicard.