Before Alisha Gracias, a 26-year-old physiotherapist in the western Indian state of Goa, bought her first car in April, she looked at a lot of different models. Among them was the new 312,270 rupees ($5,084) Go hatchback from Datsun, the nameplate that Nissan brought out of hibernation in 2013 to churn out inexpensive no-frills cars in emerging markets. Although Gracias was familiar with the model, she wasn’t smitten. Instead, she paid almost 50 percent more than the top-end version of the Go to buy a Grand i10 made by Hyundai. That vehicle’s bells and whistles, including Bluetooth connectivity, dual air bags, antilock brakes, rear parking sensors, and power mirrors, were among the factors that led to her choice. “Besides,” Gracias says, “I didn’t like the looks of the Datsun.”
As Gracias’s cool reception shows, cheaper prices don’t guarantee success in emerging markets—even in a country where most people earn less than $2 a day. Tata Motors learned that in 2009 when its then-$2,500 Nano failed to gain traction across the subcontinent. The Nano’s total sales in its first five years were less than the company’s one-year production capacity. For Nissan Chief Executive Officer Carlos Ghosn, failure to make Datsun a success could threaten his ability to deliver on a pledge to investors to raise Nissan’s global market share by a third, to 8 percent, by March 2017.