May 24 (Bloomberg) -- Nissan Motor Co. will introduce its first Datsun model in India by March 2014 as the Japanese carmaker offers cheaper vehicles in a push for a fivefold increase in its share of Asia’s third-biggest auto market.
Nissan plans initially to sell Datsun-brand cars at existing Indian dealerships, Kenichiro Yomura, head of its local unit, told journalists in Mumbai yesterday. Nissan is expanding its network in the country to 145 outlets by then from 95 currently, he said.
Chief Executive Officer Carlos Ghosn revived the brand, phased out in 1981, to widen Yokohama-based Nissan’s appeal to customers in countries such as India, Russia and Indonesia. In India, Datsun will compete against local market leader Maruti Suzuki India Ltd. and Seoul-based Hyundai Motor Co. as Nissan targets a 10 percent market share by 2016.
“It’s going to be a challenge for Datsun” as Nissan uses the division to bring out entry-level models that can be priced lower than its current cars, said Ammar Master, an analyst at LMC Automotive in Bangkok. “It will take some time for Datsun to build up its brand name” and win drivers away from larger manufacturers.
Nissan plans to almost triple sales in India to 100,000 vehicles in the year through March 2014, Yomura said. That would outpace the industrywide gain of as much as 7 percent projected by the Society of Indian Automobile Manufacturers.
“We know that the competition like Hyundai and Suzuki are strong, but nobody can dominate the market indefinitely,” said Yomura, who moved to India from the Middle East two months ago. “Datsun is not a cheaper version of Nissan. It’s a real car built specifically for customers in India.”
Nissan needs to gain sales in smaller models to achieve its market-share target. Compacts and minicars accounted for about 75 percent of passenger-car deliveries in India in the year ended March 31, according to the auto manufacturers’ association. Maruti controlled 45 percent of the car market, while Hyundai held 20 percent, according to the group. Nissan’s French partner, Renault SA, ranked ninth in passenger-vehicle sales, which also include vans and utility vehicles, and the Japanese company was No. 10.
“It is an intelligent strategy not to be bogged down and to be able to position its vehicles lower than it would under the Renault or Nissan brand names,” LMC Automotive’s Master said. “It will be very important to Renault-Nissan to succeed as that will bring in entry level buyers that will generate volumes” to sustain profitability.
At present, Nissan’s lowest-priced car in India is the Micra compact hatchback that starts at 430,122 rupees ($7,700). Yomura declined to say how much the Datsun model will cost.
Maruti Suzuki derives the majority of its sales from the minicar and compact segments that include models with 1.2-liter engines and a span no longer than 4 meters (13 feet).
Suzuki Motor Corp.’s New Delhi-based unit offers its best-selling Alto model starting at 246,500 rupees. Hyundai’s cheapest model, the Eon, was introduced in 2011, priced from 279,883 rupees.
India is likely to expand to become the world’s third-biggest car market by 2020 from No. 6 in 2010, according to an estimate in 2011 by industry researcher J.D. Power & Associates.
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