‘We are giving much more than Maruti in the Datsun Redigo.’

Soon after Datsun had the global reveal of the Redigo hatchback in New Delhi today, Guillaume Sicard, president – Nissan India Operations, spoke to Shobha Mathur on the sales game-plan, the car’s USPs and why he thinks people are ready to move on to an alternative to the market leader, the Maruti Alto.

With the Datsun Redigo set to hit the market by early June, what is the roadmap going forward?

It is to produce the car and sell the car. The plan is to find an alternative to the market. People who are coming to the market today are 30-year-old youngsters who are starting to make good money in their life. They have two-wheelers and feel it is time to upgrade to a car. They want something of good value, something that is safe and low fuel consuming. 

When they think of buying the Redigo, I want to make sure we are on their shopping list and they see us as a strong alternative that is bringing value and freshness to them. So if this works in a very big market because this car accounts for 1 out of 5 in India, then we will see big sales and we will sharply target the Maruti Alto 800.

What kind of volumes you are targeting with the Redigo?

As manufacturers we don’t talk about volumes but we can significantly increase Datsun sales. Last year we sold 20,000 units and can significantly increase our footprint.

Renault India plans to ramp up Kwid production to 200,000 units. Do you think it will dent sales of the Redigo that is built on the same platform?

I think there is a lot of room in the Indian market. If you look at the target market, 75 percent segment share is held by Maruti Suzuki and a little above 20 percent by Hyundai Motor India. A newcomer like the Kwid is showing that it is possible to break their market hold. This means it is possible through a combination of the right product and the right price. It is also a combination of India showing it is ready to break tradition – that it is time not to buy another Alto 800 but that we can go somewhere else as well.

I am very happy to see that another manufacturer has made it. It makes me very confident of the fact that we can also make it but the cake that I am talking about is a 75 percent segment share. There is room for not only one manufacturer but for more. Maruti Suzuki and the Alto 800 is a very serious competitor; I respect Maruti a lot but this dominant position will be very difficult to last as India is ready to move to something new and fresh. Not everyone but if you are talking to say 20-30 percent of those people and if some of them buy the Datsun Redigo, I will be extremely happy.

But Maruti will also be bringing more new models in this segment that you are targeting?

Of course, it’s a never ending story. India is a market that is extremely young while China is 37 years old. Compared to China, we are very young.

But Maruti also has CNG and AMT options in this market segment?

We are giving much more than Maruti in the Redigo. Fuel efficiency will be more, in terms of roominess it is more, braking distance is shorter, it is better in terms of visibility, ground clearance, and dramatically better in terms of maintenance cost.

Maruti has been there for so long, has a good network and everyone trusts Maruti but we are coming out with a very strong product which will give a lot of value. I hope a third of this market will say, “Hey, I love the Alto since I have been in it since I was a child and it is part of my heritage but there is something else now and it is giving me more than the heritage.”

Your argument is valid but you are up against 1,800 sales and service outlets of Maruti compared to 217 of yours. How do you compete in servicing and spare parts in this scenario?

There is a certain amount of confidence in Maruti because of the brand and network coverage but we are not at Maruti’s level. The customer will have an experimental Datsun point and we are working on it. If he has the Datsun point, then he will have confidence in the Datsun brand. It is true that this is very difficult as we are just two years old in India and are the youngest automotive brand here, which is not the case in South Africa and Russia because the Datsun brand is big in other places in the world. We are rising and once you win the customer’s trust about the brand, they know it is serious and it is Japanese. Once they realise that this car is giving good value compared to the rest of the competitors and I am talking specifically about Maruti, then I don’t know what peer pressure and family pressure will tell me not to do.

Earlier independent Datsun retail outlets had been conceptualised. What is the status on that?

Today Datsun cars are being retailed through a common network but so far we have developed 49 standalone Datsun outlets to increase the reach inside the country. You can buy Nissan and Datsun brands in the same showrooms. This will probably stay like that for the next couple of years but once we reach a certain level of maturity and it is time to be by ourselves, we will split and have our separate entities. This is part of the vision to have two brands – it’s like you’re a new-born and you stay with your mother brand for a while and when you get stronger, you can go.

Of the proposed 300 outlets by March 2017, how many will be Datsun dealerships?

Probably two-thirds of the new outlets are going to be standalone Datsun outlets.

Will the Datsun Redigo get a higher-capacity engine and AMT variants?

Nothing is impossible. One thing is for sure that we have a very strong plan of activity with this new car. What I can promise is that every six months you will see new things coming in and new ideas coming up on the Redigo.

So in CY2016, how many new models will there be from Nissan and Datsun in India?

Globally what we are targeting for Nissan Corp in India is one new product per year, so in terms of local manufacturing only the Redigo will be launched in 2016. But thereafter, as part of the CBU programme, we will introduce the X-Trail Hybrid in this financial year. Amazingly, week after week, we continue to see demand especially in the Delhi region, which means people are getting extremely sensitive about hybridisation. We will also bring the Nissan GT-R this year to India but more as a halo car.

Nissan was selling electric cars in neighbouring Bhutan. Any plans to bring the Leaf to India?

Yes we were selling electric cars in Bhutan. We can bring the Leaf to India but the only problem is when you sum up the duties and all the taxes, then the business model does not work at all. The subsidy that the Indian government is offering on electric vehicles is not sufficient, the infrastructure is nothing and there are no charging stations either. I would really like to push EVs in India and I am meeting officials on a regular basis for this but I need to see the government make efforts on its side as well.

I understand the government has got budgets and infrastructure development is key and I really respect their constraints. But if it really wants to have EV development as the main focus, it has to look at what is happening in the rest of the world. To launch this strategy, you need to have a 7- to 10-year subsidy that is close to $10,000 (Rs 666,300).  

How impacted is Nissan with the latest legislations as regards the diesel ban on above 2.0-litre engines, safety norms, BS-VI emission norms by 2020 and new infra taxes on the auto sector?

We have been working with our Japanese colleagues on the X-Trail Hybrid for a year now and adapting it specifically for India. It will arrive in the next few months. We are working on the electrification of the X-Trail Hybrid for India but today we don’t have good conditions to make it work. The X-Trail Hybrid will have low gas emissions, high fuel efficiency and will provide driving pleasure. It has been launched only in Asia and is hugely successful but we cannot deliver.

As far as the diesel ban on 2.0-litre engines is concerned, we don’t have the engine so it does not impact us. In Delhi we will have petrol SUVs and hybridisation soon. On the emissions front, we have the overall technology because today we produce Euro 6-compliant cars in Chennai and we have 100 percent mastered the technology, so it is no issue.

The only problem is cost which is extremely high; the government needs to understand that we can do it but obviously it is difficult to decrease the cost of the technology. Also, if at the same time, the taxes are increasing, the price of the car will rise dramatically. Therefore, the government needs to be very careful on how to actually put it together – the need for a better environment, the need for safer cars and also access to the four-wheeler market. If you keep on increasing the taxes, people will find it difficult to drive a car in India; so the government will need to find the overall balance.  SIAM is talking and explaining to the government but from the Nissan’s and Datsun’s side we have no problem. We can be ready any time.

Are you considering local assembly operations for the X-Trail Hybrid in India?

It will be a step-by-step process. First in the form of a CBU, then SKD, then CKD and then localisation. This involves a huge investment of a minimum of $10 million. If you want to manufacture a new car, then it is to the tune of $70-80 million. Sometimes you need to test and then proceed if volumes  are picking up.

Will the Datsun Redigo be exported?

Yes, it will be exported but first the focus will be on the Indian market.

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