What are the important aspects of the Suzuki alliance in the Indian context?
We foresee a very good opportunity in India with this alliance. For Nissan, Suzuki is a good, trusted partner and, as part of the OEM supply agreement, already supplies the Moco cars to Nissan in Japan. Since 2002, we have had a beneficial rapport with Suzuki and we decided to strengthen the relationship beyond Japan and work in emerging markets like India that offer tremendous potential. It is only a logical extension of a strong alliance. One of the main topics in this extension of the collaboration is “cross-manufacturing” in new emerging markets. At this point, we are still discussing the aspects of cross manufacturing. By this, I am referring to Nissan-produced Suzuki cars or Suzuki-produced Nissan cars sharing their respective manufacturing facilities. But for the Indian market, this will apply and it has been decided that Suzuki will produce cars for Nissan in this country. There are more benefits, including cost savings, if Nissan uses the experience and know-how built up by Suzuki rather than building on our own. I do believe that this is a win-win situation for both Nissan and Suzuki.
Will Nissan Motor India still be open to setting up a greenfield facility?
Nissan Motor India is a national sales company and the top priority will be to build the retail network across the country comprising dealerships and after-sales support. This will be meant for the cars produced at the Maruti plant in Manesar. I cannot rule out the possibility of Nissan Motor India setting up its own facility in the future because we have to constantly think of new ideas! Eventually, any decision will boil down to the benefits it offers Nissan as in the case of the Suzuki alliance.
Will Renault play a role in the vendor plan for the project?
As you know, Renault and Nissan have a joint collaboration for outsourcing called the Renault Nissan Purchasing Organisation (RNPO). However, this is an alliance that is only confined to Suzuki. Whether RNPO enters the picture later remains to be seen and it is difficult for me to make a definitive comment at this stage.
Are you pleased with the performance of the X-Trail here?
Since the time we launched the X-Trail in August 2004, we have reported sales of 400 units. Our feedback tells us that customers are satisfied with the performance of the vehicle. The distinct benefits of the X-Trail are its superior diesel engine, mileage and power. It is important to bear in mind that it is a brand creation model for Nissan that is targeted at a specific customer segment.
What is Nissan’s outlook for the Indian car market?
We see tremendous opportunities in India simply because all the growth parameters are in place right from the strong GDP growth to the foreign direct investment inflows. The fact that there is a considerable percentage of young customers who are upwardly mobile also translates into a great advantage. From our point of view, India is sending all the right signals. It is in this context that geographical expansion is so important and we need to grow in those markets where we have either a negligible share or no presence at all in the first place. India is one such and we have big plans for this buoyant market.
Do you believe that Nissan was slightly late with its India plans?
I would tend to agree with that statement because Nissan had a greater focus on China initially but this has changed since and India is important to us. As I have already stated, we are now putting a lot of emphasis in this market though the biggest challenge is speedy implementation.
Are there worrying aspects about India which could impact industry?
Well, infrastructure is an area of concern and it would be good if there are better roads, ports and airports along with timely and regular supplies of water and power. I also think that government policies and procedures can also be simplified in some instances.
Does Nissan see bright prospects with free trade agreements?
India has already signed an FTA with Thailand whose full impact has not been realised yet because it is being implemented in phases. Nissan has a manufacturing facility in Thailand and the idea is to use this as a base for the ASEAN region. As we moving towards global sourcing, it will also become a big opportunity for Indian vendors if they deliver the right mix of price and quality.