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By Aditi Shah
NEW DELHI (Reuters) – In any case, Nissan Motor Co Ltd has experienced a terrible career in India. The drive to revive your low-end Datsun logo has failed, sales have fallen by 60% in the last five years and your factory in the country is operating well below capacity.
But the amount of cash and energy that Nissan, battered by the scandal and expecting a record $4.5 billion annual operational loss, will spend to turn its fortune in India will feature the sale of a vehicle, its new magnite compact SUV, 3 resources wisely told Reuters.
The SUV can also bear the weight that Nissan will exert, as the alliance’s spouse, Renault SA, plays their respective roles in the Indian market.
Introduced this month and due to its release later this year or early 2021, the Magnite will be Nissan’s first new vehicle in India in two years. In addition, it will be just one of the 3 Nissan brand models on the market after two more were retired in April, when stricter emission standards came into effect.
“Magnite will buy Nissan in a few years to expand a plan for India and the good fortune of the SUV will do so whether it’s making a more investment or cutting off its operations,” said a source.
One moment he called Nissan’s game app vehicle the “last hope” to revive the logo in India.
However, Japanese carmaker number 2 has no plans to withdraw from India, where it has invested more than $800 million, and discussions about the strategy are underway, resources said. They were allowed to speak to the media and refused to be identified.
The Datsun logo will be phased out as a component of a global review, they added. The only other Nissan models in India are 3 Datsun cars.
Nissan told Reuters in a statement that it was committed to the Indian market and had a well-defined strategy for “a sustainable and successful business.” He declined to comment on Magnite’s sales goals.
WHO WILL LEAD?
Nissan’s internal plans require sales of 1,500 to 2,000 Magnites consistent with the month, said the first source, which, if realized, would exceed the average consistent with monthly sales in India made last year with seven models.
The value of the SUV will be “aggressive,” resources said without giving details. Originally developed as a Datsun model, it now has features commonly noticed in a mid-range car, adding a touchscreen and cruise control.
But the market is: demand has been crushed by the coronavirus pandemic and the compact SUV segment in India is crowded. The Magnite will also face models of industry leaders: Brezza through Maruti Suzuki and Venue through Hyundai Motor.
To complicate matters, Nissan’s outlets in India have nearly halved the number of about 270 in 2018 as dealerships moved away from the brand, the third said. He added that Nissan expects to export the model.
India is a thorny market for Nissan, as nissan and Renault are radically restructured after the surprise arrest and overthrow of former chief executive Carlos Ghosn in 2018.
To save resources, explain decision-making and duplication, the two companies agreed on a “leader-follower” strategy in key markets where one is the spearhead of operations and the other is further behind.
Nissan, for example, is taking the lead in the United States, China and Japan. But India is the sole major market where no such decision has been made, with the automakers saying they will coexist and compete.
“If Magnite succeeds, Nissan has a more powerful floor to claim to be the leader in India. Otherwise, it goes back to the discussion about who is the biggest and the smallest,” the first said.
On the one hand, Nissan owns less than 1% of the Indian market, promoting 18,000 cars in the last year of advertising. Renault has sold five times as many cars in the country.
But Nissan owns 70% of its condominium plant in the southern city of Chennai and has exported 80,000 cars from the plant in the year after operation, five times more than Renault.
Two resources said automakers were in talks for Renault to increase its stake in the plant, which can build 400,000 cars a year. The plant operates only 43% of its capacity, Nissan said in January before the spread of coronavirus in India.
Nissan responded to requests for comment on divestment negotiations or existing usage rates. Renault also responded to requests for comment on the discussions.
(Reports through Aditi Shah; Additional reports through Naomi Tajitsu; Edited through Edwina Gibbs)