July 16 (Bloomberg) -- Nissan Motor Co. said its new entry level Datsun brand hatchback will help attract young buyers looking for their first car in emerging markets including India.
With models such as the 1.2-liter five-door Go, Nissan is targeting younger customers in emerging markets, Trevor Mann, an executive vice president at Japan’s second-largest carmaker, said in an interview in a suburb of New Delhi yesterday.
“We’re moving strongly with Datsun in the emerging markets, the markets that have a significant amount of young risers, if you like,” said Mann. The brand in these markets is “specifically designed for emerging people.”
Chief Executive Officer Carlos Ghosn has resurrected the Datsun marque, popular for its fuel economy during the 1970s oil shocks, and aims to challenge smaller competitor Suzuki Motor Corp.’s lead in the Indian market with low-cost models. The Go, which will be priced under 400,000 rupees ($6,700), and subsequent Datsun models will help Nissan capture 10 percent of market share in India by 2016, according to Ghosn.
Nissan had less than a 2 percent share of the 1.89 million cars sold in India in the 12 months ended March and aims to narrow the gap with Suzuki’s Maruti Suzuki India Ltd. unit, which controlled 45 percent of the market in the period.
The Japanese carmaker and its French alliance partner Renault SA will invest about $2.5 billion over the next five years on expanding the business in India, Ghosn told reporters in the southern Indian city of Chennai today. The Nissan-Renault combine targets to capture 5 percent of the India market in 2013 and triple that in the coming years to 15 percent share, he said.
The carmaker aims to tap India’s surging youth population, that is estimated to make the South Asian country the world’s youngest by 2020 when 64 percent of its 1.4 billion people will be of working age, according to an IRIS Knowledge Foundation and UN Habitat report.
Nissan, based in Yokohama, Japan, plans to begin selling the Datsun in India, Indonesia, Russia and South Africa next year as part of its emerging markets push, according to Ghosn. Datsun will target first-time buyers upgrading from motorcycles or used cars, Ghosn said in March 2012.
“India is a proving ground for products going to other high-growth markets,” Ghosn said today. “If a model is successful in India, it can be successful in Indonesia, Africa and other high growth markets.”
The Japanese carmaker yesterday unveiled the first revived Datsun model at an event in Gurgaon, near New Delhi. The marque was mothballed in 1981.
Nissan won’t have a problem attracting first time buyers in India, Mann said. Tata Motors Ltd. has struggled to win entry-level buyers for its Nano model, introduced in 2008 as the world’s cheapest car.
“This is not a Nano,” he said. “There are people who are now in employment whose level of disposable income is at a certain level and they want a real car.”
Tata Motors’ $2,000 Nano sold fewer in five years what its dedicated factory can make in one -- because few buyers wanted a vehicle that was primarily pitched as an inexpensive alternative to a motorcycle.
Indonesia’s young and expanding population could total 280 million by 2030, up from 240 million, McKinsey Global Institute said in a September 2012 report. An estimated 90 million Indonesians could join the consuming class by 2030, it said.
“If you go back a few years, Nissan sold 1 percent of its vehicles in emerging countries,” Mann said. “Last year we sold 30 percent of our volume in emerging countries and we would expect then that to grow more to the industry average.”
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