Carlos Tavares, Executive Vice President, Nissan Motors

by 30 Jun 2006


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Nissan has made a soft entry into India with the X-Trail but to be serious in this market you need a low-cost car. What is the product strategy for such a car?
You know that Nissan is now in the learning phase of the Indian market. We think it is a very competitive market. As you mentioned, low-cost cars are the key and we have to go through this first phase of learning, understanding what are the customer expectations, understanding the supplier base in this country, making sure that when we will go to the second phase with stronger involvement, we will have the basics, the fundamentals of this market in mind. That’s what we are doing now, preparing future scenarios based on the things we learn now.
What is the challenge in developing affordable cars? Taking the Logan as an example, it’s obvious compromises have to be made to keep costs down. Will Nissan take a similar approach?
We think that the secret, if there is one, is in deep understanding of customer needs. When you want to make a very focussed car to achieve a very aggressive pricing with low cost, you have to understand in a very accurate way what the customer is going to consider as being important and what he considers less important, which you could remove. That is why it is important not to rush in the first phase. You need to first understand the customer segmentation in the Indian market, get a deep understanding of customer needs, and then find the most appropriate automotive answer. We are in this phase. Obviously, we have a strategy in what are called entry-cars, but this strategy will only be implemented once we are reasonably sure we properly understand the Indian customer.
Does this mean you are in the process of developing a mass-volume car for markets like India?
When you look at, what we call in the automotive business, the BRIC countries or Brazil, Russia, India and China, you have to find good automotive answers and we are working on low-cost, aggressive pricing cars. We are still in this process and it has to be seen whether we have a single answer or several answers for the different markets. Obviously, our partnership with Renault will help us to go as fast as possible in this direction.
Has the Logan helped in giving you the focus to slash costs?
Yes, there are things we can learn. The first most obvious thing is that it is possible. Sometimes, within and outside the company, you find many questioning the realism of the projects. Secondly, we should also be careful not to try and copy just the Logan case because even though we are facing emerging markets, we learn from China that those markets move much faster than we thought. It is obvious when you look at what’s happening now in the Chinese market that the sedans will probably slow down much quicker than we think. Also, the speed at which emerging markets are absorbing automotive knowledge we have in different marketplaces is very high. So the challenge for us will be to achieve a very cost-efficient global strategy and at the same time bring something which will be modern, totally adapted to customer needs because I am sure Indians don’t want old-fashioned and obsolete cars. When we enter the Indian market, it will be with a very fashionable, emotional, modern product, yet low-cost with aggressive pricing.
Being involved with product styling, do you think sometimes you have to compromise on style to keep costs down? Is this a challenge or is design, styling and aesthetics not greatly related to the cost of a car?
One of Nissan's very visible strengths is the fact that the design teams are very focussed in understanding the target customer. Within the company, we have specific upstream milestones at which we check the common vision between the design and product planning teams. If design and product planning don’t see the target customer in the same way, they will not deliver a strong and consistent core product. This is to enhance the fact that our designers have a huge capability to design, keeping the target customer in mind. This means you don’t have to design cheap, but you have to design cars looking at what this customer is going to value in terms of perceived emotion and perceived attractiveness. I think this is a unique strength. If I compare my knowledge of Nissan’s design team with other companies, it is a very strong point of our company.


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