Nissan to unveil Datsun in India in cheap-car push priced at subRs.400,000 category

REUTERS: Nissan Motor Co takes the veil off the first car in its resurrected Datsun brand in New Delhi today - a sub-Rs.400,000 (US $ 6,700) hatchback that is part of a foray by the Japanese auto maker into cheap cars for emerging markets.

With the Datsun hatchback and other Datsun models to follow over the next three years - one of which could be priced as low as US $ 4,000 (Rs.240,000) if Nissan can meet its aggressive manufacturing cost objectives - Nissan is treading ever so closer to the ultra-low-cost car market.

That market in India is now famously occupied by the Tata Nano, a barebones car that retails for between Rs.150,000 and 220,000.

“We try to keep the price positioning for Datsun competitive, so that products are appealing” to the lower half of the auto market in India where Nissan has a few products competing today, Nissan’s Programme Director for Datsun, Ashwani Gupta, told Reuters in an interview.

It is a move that has been generally resisted so far by other global auto giants, such as Toyota Motor Corp., out of concern a scruffy, ultracheap car model could tarnish their high-value brands.

Top Toyota executives, including current Chairman Takeshi Uchiyamada, rejected a chief engineer’s design for a low-cost emerging market car several years ago, saying it was too cheap to be called a Toyota, an engineering executive said.

The car has since undergone some design iterations and was finally launched in India in 2010 as the Toyota Etios sedan, which starts at Rs.545,000. A hatchback version of the car, launched in 2011, starts at about Rs.450,000.

Since Nissan plans to market Datsun cars in India through its existing Nissan-branded dealerships, Datsun could expose the Japanese auto maker to similar risks, though executives downplay the possibility.

They say use of a separate brand name should effectively shield Nissan’s brand image. Datsun, which Nissan once used for its cars outside Japan, has a history dating back to the 1930s.

“We’re serving different customers” with Datsun, said Tatjana Natarova, a Datsun spokeswoman. “That’s why we came up with a different brand.”