Nissan has targeted 80 per cent localisation by 2030 with a sales target of one million units.Nissan Motor has identified Japan, China and the US as its ‘lead markets with dual responsibilities’ for the remainder of this decade. These three countries will drive performance and profitability while creating competitiveness for the rest of the world.
India, in contrast, has been placed in the category of ‘extend reach and support expansion’ where other regions include Europe, Africa, Oceania, Latin America and ASEAN. In the pecking order, this classification comes third after ‘highly valued markets’ comprising Mexico and the Middle East.
These details are part of the ‘Nissan Vision’ presentation made in Japan on April 14. In the top layer, Japan will lead autonomous driving technologies and new mobility services.
Nissan will also prioritise reinforced heritage nameplates as well as expand its lineup of SUVs and compact cars for Japan. As part of its customer expansion efforts, the country’s younger generation will be the top focus. Nissan has set a target of 550,000 car sales in Japan by 2030.
In the US, its second lead market, SUV leadership will be the main objective along with a flexible electric vehicle strategy. Nissan has targeted 80 per cent localisation by 2030 with a sales target of one million units.
China as global innovation hub
For China, both domestic performance and global competitiveness will be the key drivers. Local relevance will be strengthened through the N series NEV lineup. Nissan will also use China as a global innovation and export hub, leveraging its speed and cost discipline along with advanced BEV and HEV capability. As in the case of the US, the sales target for China by the end of this decade is one million units.
Next in the hierarchy are highly valued markets, where the first, Mexico, will deliver industrial scale and market share while doubling as an export hub for the Americas and the Middle East.
The other market in this category is the Middle East, where Nissan’s growth will focus on high-value segments, supported by the lead-market trio of China, Japan and the US, as well as sourcing from China.
The third category, ‘extend reach and support expansion’, will see India (and Africa) work towards an expanded SUV lineup, while Europe will play a central role in electrification. In ASEAN, Nissan will introduce NEVs while targeting consistent profitability in Oceania and aggressive product renewal in Latin America.
India is probably the most competitive country in the world for the automotive industry. It does not cover 100 per cent of technology or components required to make a car, but it is giving a good 97 per centA top Nissan official said in 2013
In India, Renault is now in the driver’s seat at the Chennai plant after buying out Nissan’s stake. The new business model will see the Japanese automaker producing cars at this facility under a contract manufacturing agreement. Both Renault and Nissan continue to be partners at the tech centre near Chennai.
At one point, speculation was rife that Nissan would even look at exiting India, given that volumes were not much to write home about, along with the fact that it was on a weak wicket globally. This was not the case way back in 2008, when it had teamed up with Renault to manufacture cars at the sprawling plant in Chennai, which has a capacity of nearly 500,000 units.
Magnite on a roll
Thus far, the Magnite has been Nissan’s most successful product in India, even though the top leadership tried hard in the past to make a breakthrough in the volumes segment by reviving the Datsun brand.
The intent could not be faulted, but the execution was flawed, from the messaging on affordability (on the lines of the Tata Nano) to cutting corners on features.
In the case of Datsun, the reasoning was that a global brand was needed to meet the needs of customers in India and beyond. The brand was finally yanked out of the Nissan stable in 2022.
When the big bang announcement on its entry was first made in Delhi back in 2013, a top official had told this writer, “India is probably the most competitive country in the world for the automotive industry. It does not cover 100 per cent of technology or components required to make a car, but it is giving a good 97 per cent.”
Of this (97 per cent), India was the cheapest, or the second cheapest, globally for at least “80-85 per cent”. It was this strength that Nissan expected to draw upon as it embarked upon its most ambitious car project a decade ago.
We want to stay focused on four countries (India, Russia, Indonesia and South Africa) initially and make this project a realityNissan executive
Datsun for the emerging middle class
Datsun was targeted at the new emerging middle class. “We want to stay focused on four countries (India, Russia, Indonesia and South Africa) initially and make this project a reality. Of course, we will go beyond that because the emerging new middle-class will hopefully happen in many places,” said the official.
India was positioned as a critical pivot in this global drive, as it was home to Nissan’s largest engineering centre outside Japan (in Chennai), which meant the company would “try to reap the benefits and use this knowledge”.
India was also “fundamentally the winner of tomorrow” because the mindset of its people was a combination of development and respect for limited resources. Terming this a “fantastic tool”, it also put in perspective why Datsun was developed in Chennai and not Japan.
Yet, the Datsun story did not go according to plan since its India launch in 2014, and the top management agreed that more needed to be done for the brand. During an event in Yokohama, Japan, they said it had received “varying degrees of success” across markets.
“We have started to get some traction though the speed varies from market to market,” one of them said.
Nissan officials in Japan admitted during the event that the company needed to perhaps make a “little more noise to get attention”. While they were reasonably confident that Datsun had the potential to grow, it would take longer than the company had first envisaged.
Everything we do in life is half empty and half full. We could have done worse and my belief is you can keep improvingTop Nissan official at Yokohama
Value for money is key in India
“We have the right products in the right markets but just need to work hard and get the momentum. People in India want value-for-money and not anything cheap. We are learning something new everyday,” said an executive.
Where Datsun had first made a connection with customers in the 40-plus age group, the challenge was to reach out to those in their mid-20s who were ready to loosen their purse strings for an attractive car brand.
“Everything we do in life is half empty and half full. We could have done worse and my belief is you can keep improving. If you do not learn, you will die in this industry,” a top official said at Yokohama.
In a way, he was being prescient because Datsun did not last the course, and Nissan was back to square one with low volumes and no cohesive growth strategy in place. Troubles began mounting a few years later with the dramatic arrest of Carlos Ghosn in Tokyo eight years ago.
The relationship with Renault, which was already fraying at the edges, went through a rough patch for a few years, and it was only a matter of time before the two would choose to go their own ways.
Upbeat about road ahead in India
Nissan has reiterated that the India innings will continue unhindered even though the manufacturing alliance with Renault has changed. The company has launched new products and is upbeat about increasing its export share to 50 per cent when overall volumes in India reach 200,000 units.
The latest vision statement in Japan has now clearly outlined India’s role, even as China, the US and Japan are right at the top of the priority list. The world is also experiencing tremendous volatility, thanks to the conflict in West Asia, which could put significant pressure on the global automotive industry through fuel prices, sourcing of critical components, and higher transport costs.
Nissan has constantly maintained that it is open to new partnerships, and Honda was one such potential ally. Whether the two companies will still come together is a million-dollar question, and if they do, it will be keeping in sync with other Japanese alliances like Toyota-Suzuki, Toyota-Mazda and Nissan’s own partnership with Mitsubishi.
On the other hand, there is no telling if the not-so-distant future will see a Chinese automaker joining hands with Nissan. Its ally, Renault, has a strong bond with Geely, and it will be interesting to see if a similar script plays out for Nissan.
