Could Reviving Datsun End Up Costing Nissan’s Ghosn His Job?
Following recent news of Tesla’s Supercharger, Nissan has been rumored to be positioning to unveil an onboard fast charging system (double the current 3.3 kWh charger) for its 2013 Nissan Leaf in the U.S. and Europe in an effort to reduce consumer range anxiety typically associated with electric vehicles (EVs). While this is not confirmed, the global automaker has also toyed with the idea of bringing leased electric car batteries to the U.S market.
Now Carlos Ghosn, CEO and chairman of Nissan Motor Co. (and Renault) plans to take the Datsun brand out of the old garage in a move aimed at establishing low-cost cars ($3,000-$5,000) in developing regions such as India. Is Nissan on the right road to profit with entry priced vehicles or is the company in need of its own navigation in the board room?
I believe reviving Datsun for emerging markets has a specific purpose and that could spell better times ahead of patient Nissan investors if the company delivers the car in the price range so many before them have failed to produce. Gross margins at such a low price point are certainly challenging, so why would Nissan make such a bold move now? I believe the answer lies in the success of the Tata Nano.
Just look at the Tata Nano September sales, up a phenomenal 87% year-on-year. It seems Ghosn sees opportunity and needs to move fast before other rivals make their own presence in emerging markets.
For Nissan, the timing for the rebirth of Datsun could have multiple motivations: overall weak auto sales versus Toyota, which has not been hurt in its own home market by a strong Japanese yen the way Nissan has; the motivation to play the spoiler role in the hopes to challenge the dominant Tata brand at the lower end of the market; the need to beef up employee morale and cause a little excitement since the Nissan Leaf will likely miss the full year goal of 20,000 sold units in the U.S. in 2012 despite the best monthly sales figure in a year (thanks largely to big incentives on leases and purchases in a final attempt to offset weak sales for the year).
Now Nissan hopes to directly go after the Tata Nano through Datsun, a nostalgic brand with a lot of name recognition around the world. Considering India alone is slated to overtake China as the world’s most populous country by 2030 with an estimated 1.53 billion people, there could be a seismic shift away from the scooter market, catapulting low-cost vehicles to become the transport of choice. That would be great for Datsun. Ghosn knows this and it seems the recent enthusiasm toward the Nano as evidenced by recent sales may have caused Ghosn to try and make a bold move to help Nissan find it's groove again.Continued on the next page