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What went wrong for Nissan's 'low-cost car' Datsun

October 31, 2019 08:30 IST

The brand was relaunched in India with much fanfare, but it seems to have belied the earlier promise and seen many ups and downs, reports T E Narasimhan. 

Photograph: Courtesy Datsun India

The Datsun, 'low-cost car' brand of Japanese automobile major Nissan Motor, was designed and developed in India to serve the global market.

Its journey has seen ups and downs since it was relaunched in 2014, making the global debut in India. 

Recently, when reports also speculated that Nissan might shut down the brand, the company in India announced a Diwali offer of up to Rs 62,000 on the Datsun Go, Go+ and rediGo models, along with other Nissan products.

 

Datsun 2.0

Nissan Motor announced the Datsun brand's return (its third global brand, alongside Nissan and Infiniti) in March 2012.

The aim was to provide a sustainable motoring experience to optimistic up-and-coming customers in high-growth markets.

Datsun originated in Japan as DAT-GO (the DAT-car), almost a century ago in 1914.

The word DAT means 'lightning-fast' in Japanese but is also a reference to the first letters of the family names of the three financiers who supported the business at the time: Den, Aoyama and Takeuchi. Using the same logic, it was promoted as Durable, Attractive and Trustworthy or DAT for short.

In 1933, Nissan's founding father, Yoshisuke Aikawa, took over the business.

In the early 1930s, a lightweight, economical yet resilient car to meet the aspirations of young Japanese was launched; it was named 'son of DAT', later changed to Datsun.

The brand was operational till 1981, when the company discontinued the brand globally, replacing the name with Nissan.

Image: Abhishek Mahapatra, vice president of Nissan India, at the launch of Datsun Go CVT variant in Chennai. Photograph: Rajesh Alva/Rediff.com

In 2012, the company announced it would revive the brand and officials said they'd be setting up a manufacturing facility for a Datsun range of small cars.

It was expected to play an important part of its Power 88, a six-year comprehensive plan by Carlos Ghosn, then chairman and chief executive, to accelerate the company's growth across new markets and segments.

Datsun was revealed in India in July 2013. Sales began from 2014 in Indonesia, Russia and South Africa, with the idea of having 30-45 per cent of total sales from this segment by 2016 from these markets.

The Datsun revival was envisaged as part of Ghosn's strategy to tap the newer high-growth markets.

The traditional North American, Western European, Korean and Japanese mega markets were expected to go below 40 per cent of the global market share.

It was developed in Nissan's manufacturing facility at Oragadam, around km from Chennai, and has been manufactured in India. This was also part of a strategy to become a major player in India.

Over the years, the company launched the GO, GO+ and rediGO under the brand. It sold 16,076 cars under the Datsun brand in India and 31,398 under the Nissan brand in 2014-15.

Over the next three years, sale of the Datsun brand grew; Nissan brand sales dwindled.

However, the brand's sales fell by eight per cent in 2017-18, to 40,490 units. Between April 2018 and February 2019, the three brands under Datsun registered sales of 27,070 units.

Photograph: Sanjay Sawant/Rediff.com

What went wrong?

"It is a good brand, with a long heritage and good technology and design. The major challenge was positioning. When the product was relaunched in 2014, it was positioned as a low-cost, affordable, product," said an expert.

Indian consumers are price conscious. They want an affordable product, not necessarily a low-cost one. The classic example is the Nano. So, the first issue was pricing, said an industry expert.

Instead of positing the brand for its legacy, pick-up and quality it was positioned differently, as a low-cost product. An error, it is felt.

The second issue was that in the year of launch, 2014, the Global New Car Assessment Programme, a crash testing agency, issued a report with a zero-star safety rating to the Datsun Go.

It then wrote to Ghosn, urging withdrawal of the product. This was widely reported and damaged the brand before it had even kicked off.

The third issue was the placing of Datsun products in Nissan showrooms. People could not differentiate the brands.

While the impact if Datsun is withdrawn is not clear for the Renault Nissan Alliance facility near Chennai which produces for the brands of Nissan, Renault and Datsun, workers and stakeholders hope it is only speculation.

T E Narasimhan in Chennai
Source: source
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