Struggling Datsun banks on 1S strategy in India

by Brian de Souza 01 Apr 2015


Nissan is now banking on a satellite service strategy whereby existing dealers set up 1S outlets (with 2 cars and 2 service bays) located 15km from the main outlets.

On March 19 last year, Nissan launched the Datsun Go hatchback, the first launch of a brand that the Japanese carmaker pulled out globally 30 years ago. To resurrect this budget brand, Nissan brought in the Go targeted at emerging markets such as India, Indonesia, South and Russia and did a global reveal in New Delhi in July 2013.

At the time of its launch, the company did bank on the Go to bring in the numbers and there were indications that the brand could sell as much as 8,000 units a month once it stabilised.

Targeted at the first-time buyer, Nissan was verily pitching its tent in the same space as the Maruti Suzuki Alto, an entry-level car that is India’s top-selling car.

That never happened. After the initial numbers of about 1,500 units a month, sales have simply plunged. In November 2014, the car was in the limelight when G-NCAP, a global NGO that claims to test crash cars independently, thrashed the car for its poor safety credentials. This had dealers and suppliers worried. Sales in December plunged to just 455 in wholesale numbers, its lowest and even lower than the Nano at its nadir.

However, Nissan India managing director Arun Malhotra says the numbers will go up. “Our basic strategy is fine but we have to align it to the customer,” he explained to Autocar Professional.

As part of that strategy, Nissan is now banking on a satellite service strategy whereby existing dealers set up 1S outlets located 15 kilometres from the main outlets. These stripped-down dealer outlets house two vehicles and a couple of service bays. The company now has 25 such 1S outlets, up from 14 just under two months ago.

Another pillar in the revival strategy is sales staff training in aspects concerning the Datsun Go’s safety, an exercise that was kicked off after the G-NCAP crash test results. That apart, Malhotra says with one more Datsun brand to sell, with the launch of the Go+ MPV in January, dealers are a happy lot, and Nissan hopes to see the numbers go up.

The company is going to ramp up production for the Go+ in March and April even as it is standardising practices at dealers aimed at wooing more customers. “Our pitch is towards customers who want flexibility is seating and luggage space,” explains Malhotra.

datsun-go-collage


SLOW GO-ING
According to Malhotra, the numbers will increase because “we are sticking to the basics, and have received no complaints”. In the initial months, there were issues regarding door noise and rubber beading which have been addressed. Says a Chennai-based dealer, “This has really helped and is having a positive impact on customers.” 

The Go+ has got off to a decent start with 1,500 units sold in January and February and, with inquiries on the rise, Malhotra is confident. Awareness of the Datsun brand which was unknown in India is going up, he says, adding that the Go continues to appeal to its target – India’s middle class. Sales staff have been asked to talk about the product’s strengths and the increasing interest by existing and potential financiers is something that gives the company hope.

datsun-go-sales-chart

So far, Datsun has sold 14,445 units going by numbers put out by SIAM. With the Go+ adding to these monthly tallies, Malhotra says potential buyers are keen on the MPV which now has a waiting period of three months. Many buyers are first-time car owners and newly married couples but many in their early 30s have bought it even though it is not their first car.

Nissan is also working on a variant of the Go but there is no timeline for its debut. Datsun is pursuing its current brand strategy and there are no indications of major changes.

On the ground, some dealers are offering discounts on the 2014 model. Nissan says it has moved beyond the impact of the G-NCAP study and that the brand is slowly gaining ground. But, as top sources say, there's a long way to go.

This feature was published in Autocar Professional's March 15, 2015 issue.