'Datsun's first car to be priced under Rs 4 lakh'

Japan's third-largest car maker Nissan Motor Company is taking the ambitious step of reviving its heritage brand 'Datsun'. Aimed at first-time car buyers of the emerging markets of India, Indonesia, Russia and South Africa, Datsun is Carlos Ghosn's (global CEO of Nissan Motor Company) biggest future bet.

Vincent Cobee, corporate vice president of Nissan Motor Company and head of Datsun brand in an exclusive interview to ET declared that India's first-time buyers have had to live with antiquated old products and with the Datsun brand, Nissan will aim to deliver modern cars at an affordable price to Indian buyers. 

Edited excerpts:

It was a big decision to re-ignite the heritage brand, what was the mood in the board room when the decision was taken, were there fears?

The board room was filled with anxiousness, yet we had ambitions. As can be expected, there were fears too of not developing the right product and service offers, not being at the right level for these demanding customers.

You call it global brand meeting local needs, what is the kind of research you undertook in India?

The research began way back in the 2006-2007. Nissan Motor teams as well as external Indian advisory firms interviewed hundreds of people right from tier I to tier III cities to understand what exactly they are looking for in their dream car.

Datsun cars will be pitted against the country's top 2 car makers - Maruti Suzuki and Hyundai, in their strong domain, how bigger challenge is it? You are telling me there are great players and it is very competitive and I am still telling you that in that segment, the product is not as good as it should be. It is not. I am going to turn the knob on competitiveness a bit more, just to see what happens. Competition is the name of the game, it is interesting.

Competition is good for us for two reasons, it forces me to be good, it forces me to be competitive and I will use those learnings in other countries. And second thing is it creates choice for the customers. The product enhancement has been tremendous over the last 40 years, it has been path breaking. Every criterion has increased but the net cost has come down, it is due to competitiveness.

In this industry you are either fit or you are doomed.

Why should a prospective customer of Maruti Suzuki or a Hyundai customer consider Datsun?

Every customer and even more an Indian new car buyer, emerging ambitious middle class is seeking a very interesting balance between the emotional and rational needs. Today you have very rational purchase criteria's in India - fuel economy, cost of ownership, access and overall predictability. The dream aspect is very wide for me to exist. I need to meet the rational needs- no excuses! I need to also put a little bit spice on the emotional quotient. So the recipe is not very difficult to write, but it is hard to meet.

What are the spices you are talking about?

We need to deliver modern products, modern service, and superior functionality with real understanding of the customer need at an affordable price. A car made for India has a great potential and not a car made for somewhere else, eventually comes to India in its lifecycle. We are targeting the first time car buyers in India. Our core offer will be in a price zone below Rs 4,00,000.

How many cars do we see under Datsun portfolio?

Datsun will have a portfolio of three cars. We will bring in two cars in the first year and third car within three years. Our core offer will be below Rs 4 lakh. The fundamental reason to have a portfolio is to create luxury of choice in the complex multi-player industry. Datsun target customer has spent decades of being told what to do, making compromises out of monopoly of solutions, but because of economic development, education and growing job market, he is finally reaching a median point of where he needs choice.

Datsun will participate in this choice. I want the customers walking into Datsun dealership to also have a choice. There is a difference between choosing what you can and choosing amongst what you can. I think there are other consideration like business logic, efficiency of distribution system, which are also the very valid criteria, but the number 1 criterion is a luxury of choice.

We are already seeing the evolution, sub 4 metre sedans and sub 4 metre SUV, MPV are becoming big? Can we expect them from Nissan?

You are measuring result of something which is very extremely simple, which is choice, it is called aspiration. You are just describing the natural consequence of a growing middle class.

India has been dominated by entry hatchback market, why - because people could not only afford that - there are still a lot of reasons why they choose them.

The growing minority of those customers will go for choice, they will go for innovation, and they will go for different solutions. Going ahead we expect people to be more hedonistic, more individualistic, more interested in differentiating themselves, now how, why? That is a difficult crystal ball. I will support both the base traditional hatchback, which is legitimate main stream offer, which will remain the majority, let's not fool ourselves, but we will also offer direction, I might be right, I might be wrong, that is the pleasure of competitive nature of the industry.

While the products are under works, what about the balance critical part of sales, after sales, service and spares?

Let's face it! Challenges of a new brand targeting a first car buyer are even tougher. We are aware that we will have to go an extra mile in terms of not only product competitiveness, but also service, quality and spares availability. We need to establish a brand identity and we need to reassure extremely ambitious and very anguished customers.

The good thing is we don't start as a new born baby. Nissan has been in the market for years. Today we employ about 12,000 people; we have a large plant, growing dealer network and number of products out on the road. There are areas where we are present and in some, we don't have sufficient visibility, but we are catching up fast. So we will have a running start in India.

We will do it the way the Japanese companies in general or Nissan would do it. Face facts, go into solutions, evaluate solutions, improve and continue to work on it. We call it Kaizen and it is not only a manufacturing term.

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Would you have a separate team for Datsun in India or would the existing Nissan team manage operations here?

You need to have a limited hard core team, which is very ambitious, who thinks, sleeps and dreams Datsun. The core team is made of 17 people at the headquarters and we have dedicated Datsun team in India too, which is located at the same place as Nissan Motor Company.

They articulate synergies with Nissan. The Datsun team keeps the function which matters in terms of customer and product differentiation. They keep the role of brand advocate, they will drive marketing and key issues of after sales offers, but when it comes to vehicle distribution or vehicle ordering, it will be taken care of by Nissan team.

But there are a lot of areas, where we will use the knowledge, the expertise and the lesson learnt and the synergies of Nissan Motor Company (of product development, styling or manufacturing).

The whole Datsun story is maximizing the efficiency and articulating the keepers of the faith versus the drivers of expertise.

The outsource model of sales and marketing is not working, how do you fix it? 

First the car distribution is always outsourced model. We don't own dealership, in no country in the world. In a car manufacturing business, which has particular specificity, we don't talk to our customers directly. This is an inherent complexity of our business, we cannot be knowledgeable and relevance in every state and every city. That is a complexity we know and how to deal with it. 

India is bringing in an additional level of complexity, which is a recent market for us. It is not a country, it is a continent and that continent has a lot of level of complexities, I am not talking, North, South, East or West, I am talking big and small. 

We are applying, one sight see and all. We are working on a very strict plan, do, check and action. The situation today has good points and points to be fixed. What is the right recipe to be successful? Nothing is permanent. Something that was successful five years ago may not work in the future. I can look at the glass half full and you can look at the glass half empty, but it is neither full or nor empty, the important thing is what are you doing to make the glass full, that's what we are working on.

Also read: Datsun India plans : Special Coverage