‘True Make in India will only happen if you actually design products in India, for India, and then manufacture.’

Arun Malhotra, managing director, Nissan Motor India speaks to Shourya Harwani on its 3-pronged network expansion strategy, pushing brand Datsun and investing in India.

Shourya Harwani By Shourya Harwani calendar 22 Sep 2015 Views icon3202 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
‘True Make in India will only happen if you actually design products in India, for India, and then manufacture.’

Arun Malhotra, managing director, Nissan Motor India speaks to Shourya Harwani on its 3-pronged network expansion strategy, pushing brand Datsun and investing in India.

Nissan Motor India has recently opened its 200th dealership. How do you plan to take the expansion drive forward?
In the past year and a half, we have removed 4-5 outlets because of performance issues, but have added around 65 outlets, starting from April-May 2014 to September 2015.

This is a combination of reinforcing our presence in big cities at strategic places, like in the heart of Mumbai, at Andheri, where we were absent. Now we have our showroom and a world-class workshop. In Delhi, we have Bhikaji Cama, in Kolkata, we have it in Park-Street, and Whitefield in Bangalore.

Earlier, we were missing in the automobile hubs. Then there are important towns that we earlier missed out, or are still growing there. In the last month, we have added Tirupati in Andhra Pradesh, Trichi in Tamil Nadu, Madurai, then Sikar in Rajasthan. We added Nashik in Maharashtra, and after this, we shall add a full-fledged dealership in Srinagar.

The festive season is upon us right now. What is your strategy for this?
Ours is a three-pronged strategy – strategic locations in the big cities, then the important towns in India and the third is satellite towns like Bhivandi for Mumbai, and Kanchipuram for Chennai. Another important aspect besides quantity is the quality of dealerships. So we are getting into processes, systems, Nissan web-services, and ‘Indianising’ them. We were very poor on customer satisfaction, number 9 out of 11 in the JD Power ratings. But this year, we have reached number three. So there is a focus on both quantity and quality and that would be the building blocks for the future.

What about the product strategy? It is no secret that the sales have gone down. What can we expect from the Nissan stable, in terms of product refreshes, new products for this financial year?
There are certain fundamentals that people don’t emphasise on. Even if you have products, but are weak with your fundamentals, you may see a sudden boost, but then sales would eventually go down.

What we are doing today is fixing our fundamentals. Products will come. Every carmaker has a product cycle plan. There are three parts to our product strategy. One is that we upgrade our existing products with special editions, and feature additions like the X-Shift for the Micra and the Terrano Groove. The second part is getting halo models which are internationally very popular, of which we are in the last stages of discussion.  The third thing is a product portfolio for the next few years which are attuned to the Indian market.

An example of one such product coming in is the RediGo, which is going to be a very revolutionary product. A thing with product portfolios is that they take time, unlike noodles which are made in one day. Getting to know what the Indian customer wants is something we are working on.

The strategy with Datsun has not exactly clicked. What sort of a revamp are you looking at for the Datsun brand?
When I look at Datsun, I always think of Amitabh Bachchan for inspiration. He had eight to nine flops before Zanjeer and then you had stars like Kumar Gaurav and Rajeev Kumar, who were slated to be the next big superstars, but fizzled out after just one or two big hits. Similarly, I feel that the entry-level market is much harder to crack in India. The customer is very conservative, and more risk averse. So it is taking time. You need to keep the first set of 1,000 customers satisfied. It comes slowly but once it comes, things start moving a lot faster. It’s like driving a vehicle and not getting first gear. Yes, we could have done a lot better and we also need to display, demonstrate and dramatise our vehicles, better.

Why does a Datsun do well in Aizwal, or the interiors of Himachal, despite there being no network? It’s because the vehicle is designed for something bigger. I believe we need to demonstrate the product better. Now with the third product (Datsun RediGo) coming up, I haven’t given up hope.

Do you think the RediGo will be a game-changer for you?
Yes, definitely. But we will have to work hard on it.

How are you working to improve your products and service experience? What were the complaints you used to get from customers?
You need to listen to customers. We record our customers during their servicing sessions and ask them as to how their experience with our product has been. No open ended questions. We try to get their words. Sometimes they enjoy it (Maza aa gaya), sometimes, they are downright disappointed with the services. There is a big difference between the two responses.

We capture the voice of the customer dealership-wise. All companies have their call centres, but we try to analyse the customer’s voices, and try to find out the gaps. There are few things that are suggestive. Then there are things that you find are gaps. And then you work on it. These are these areas that turn no-wins to must-wins. Then you work on it with your dealers if say there is a delay in delivery at some place. You analyse the gaps and processes, then you conduct an experiment at one city and translate that into the entire country. So these 5-7 things impact everything else. You see, these things are very non-glamorous.

On the export front, the Micra’s numbers are going down. What’s your strategy there?
Every market has different characteristics. Export allows you economies of scale in the plant. But the bigger part, from the marketing perspective, is that it benchmarks your quality. If the Micra has to function in London, Paris and Frankfurt, the customer there is very demanding. The vehicle is an add-on for him and his nuances are of that kind. So the benchmarking allows you to play a tougher game.

Besides the Micra, are there any other products that you export and how are they doing?
We export the Micra and the Sunny. Both are doing pretty well. Now we have also begun exporting the Datsun Go to South Africa. The Micra takes up 70 percent of our exports. A few markets like Iran open and close. All in all, we export to 106 countries, of which, 40-odd ones are sub-Saharan countries.

What are your plans with the ‘Make In India’ drive and how do you think it will affect your overall operations?
Make In India is a new clarion call given by our prime minister. But true Make in India will only happen if you actually design and conceptualise products in India, for India and then manufacture. We have set up an R&D centre comprising of 5,000 people, which not only looks at the local market, but also looks at the international market. In the long run, you’ll need the conceptualisation and designing of the product happening here.

Do you think that is happening across the industry?
I don’t know about the rest. We are doing it. I guess we are ahead on the Make in India front, after having invested in a 600-acre plant with 400,000 capacity and ready for a future Indian market. That cannot be done in one day. We were in it six years ago.

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