Datsun to develop low cost cars to compete with Nano and Alto!

The Datsun brand which will be introduced by Nissan in emerging car markets such as India is planning to develop low cost cars that could take on the Tata Nano.

“There is a big chunk of the market where Nissan does not and cannot have any offering and Datsun would fill that gap and will encompass ultra low cost or $2,500 or $3,000 (Rs. 1.25 – 1.50 lakh) cars as well,” Carlos Ghosn, Chairman and CEO, Renault Nissan was quoted as saying by The Hindustan Times.

He added that their company wants a car that will appeal to a motorcycle owner or a first time car buyer (and) is reliable and robust.

Ghosn also mentioned that in markets like India, Russia, Brazil and Indonesia, roughly 40-50 per cent of sales are in segment where Nissan cannot have a product and it is in those categories that Datsun will have a role to play.

Last month, CarToq had reported that Nissan would bring back the Datsun brand in the Indian market by 2014. The Datsun aims at developing low cost cars that would be positioned below the cheapest offering by Nissan India, the Micra (Rs. 4.21 lakh – Rs. 6.41 lakh). Initially, Datsun will likely launch two small cars, one competing with the Maruti Suzuki Alto and Tata Nano while the other will compete with the Hyundai i10.

Nissan seems to be developing the Datsun low cost cars alone contrary to the earlier speculations that the Nissan’s low cost cars could be developed out of the Nissan-Bajaj tie up or Nissan-Ashok Leyland joint venture. This argument is further supported by the fact that Renault-Nissan has not yet decided whether it will make a passenger car based on the Bajaj RE60 showcased at the 2012 Delhi Auto Expo.

It is a tactical move for Nissan to launch cars in segments where it doesn’t offer models right now. However, it would be a challenge for Nissan to popularize the Datsun brand in India given that it is yet to have a strong foothold in the market. To give you a rough idea, Nissan has just about 50 dealerships and two cars that cater to the masses; the Micra and the Sunny. Its premium cars such as Teana and X-Trail are selling in miniscule numbers.

Nissan may need to take special care to ensure that the quality of its low cost cars is top notch. The Nano, for instance is a brilliant piece of engineering, but it has bare basic interiors and lacks in terms of fit and finish. Hence, if the Datsun brand can offer a quality product at a reasonably low price, it may attract buyers.

Do you think the idea of bringing ultra low cost cars under a new (Datsun) brand will be a hit among brand conscious small car buyers?