Kenichiro Yomura - President, Nissan India Operations, and MD & CEO, Nissan Motor India
The president, Nissan India Operations, and managing director and CEO of Nissan Motor India, speaks to Shobha Mathur on Nissan’s India innings, the return of Datsun and the journey ahead.
What is Nissan Motor India’s roadmap for the future and plans for the upcoming Terrano SUV?
We have a lot of competitive products in the pipeline that should fit with the tastes of the Indian customer. We have already launched the Sunny CVT, the new Micra and the Micra Active. We have the Terrano SUV coming into the growing SUV segment and Datsun in early 2014. The Terrano will come later this year.
But the Terrano will be basically a rebadged Renault Duster?
Maybe, you will see it. It’s no secret that there is a major synergy in the Renault-Nissan Alliance and we share platforms. Based on these platforms, we build different vehicles for the Renault or the Nissan brand. For example, the Sunny and Micra are built on the same Renault platform but are a little different having been modified. We have a common platform between Renault and Nissan models but differentiate models between the two brands for different customers.
Are you looking at a sub-four-metre Terrano to take on the Ford EcoSport?
We don’t have a sub-four-metre model, either saloon or SUV. Our priority is the uncovered and growing segments and the number one priority is to get to 10 percent market share. For a start, we need to make the brand stronger and so we need to make the customers happy. The sales and service quality has to be lifted up to satisfy and meet buyer expectations. We continue to increase the dealer network. At the end of March, we had 95 outlets. By the end of this fiscal year, we are looking at 145 outlets and 300 by 2016. So segment-wise we are increasing our coverage and geography- wise we are covering more markets. We have improved our customer service level also.
How has the responseto the new Micra and Micra Active been?
There has been a very positive response. The new Micra is first for India and after that we will give a facelift in terms of appearance and specs for exports as it is not necessarily the same for each market. For the Micra, the export destination is Europe but it is also produced in Thailand for the Thai and Japanese markets. We try to make models as per different customer tastes. The Micra Active is mainly for India but maybe a small quantity will be exported.
So what will be the marketing strategy for the new Micra considering the hatchback’s domestic sales have not been all that promising?
Yes, typically the model life is 5-6 years and in the middle, we give it a major facelift. So the Micra started with very good sales and then it went a little down. With the new Micra, we expect to recover the original numbers or even more and then will try to refresh every year to sustain this sales volume.
Coming to the Datsun Go, how do you foresee Nissan’s growth with it and will it cannibalise Micra sales?
Firstly, Datsun is not just a budget or cheap car. We see 50 percent of the market having customers with different requirements and expectations for the car. We think Nissan and Datsun are different brands targeting different sets of audiences. But there will be some cannibalisation as everybody is competing with each other, not only between Nissan and Datsun but with Renault and other competitors as well.
How will the different brands be managed?
Nissan is the existing brand and we have been working globally for a long time. In India we are a latecomer and we are working on it. The Datsun brand was there much before Nissan but now it is a new brand. We are going to start from scratch and I feel in India 50 percent of the customers can be covered by the Nissan line-up and the other 50 percent by Datsun. We anticipate Datsun will make up around 50 percent of Nissan Motor Company’s total sales by the end of 2016.
How much capacity have you currently used at Oragadam? Would you have to expand it to accommodate the Datsun model line-up?
Our current installed capacity is 400,000 units per annum. We ramp up capacity as we increase the models. Even if we have a 400,000 unit capacity, we cannot utilise 100 percent. So we have 400,000 annual capacity in physical terms but if we put in more manpower and resources, it can be increased to 480,000 units annually.
Will Datsun piggyback on the existing Nissan dealer network?
Datsun is a different brand, so ultimately we are looking at a different network. However, currently we have an extensive Nissan network and nothing in place for the Datsun brand, so why don’t we utilise the existing network?
Will the Datsun brand primarily target the Tier 2 and 3 towns in India?
The Tier 1 market is also a big market and we have a number of potential customers for Datsun living here but maybe many will be in Tier 2 and 3 towns as well.
We understand Nissan had issues with its master franchisee Hover Automotive. What’s the current status?
We are working with Hover Automotive and also communicating with dealers. Basically, there are a lot of things that we need to improve for the affected side as well as on Hover Automotive’s side. By providing a lot of new models this year, we can grow together.
What are your plans to increase localisation levels?
Localisation is increasing – for the Micra and Sunny, it is 88 percent and for the diesel engine it is the highest. We are working with our suppliers.For Datsun, there will be some same and some different suppliers as there will be some difference in the models. Some of them also supply outside India for supplies to Japan for models not made here.
Currently, the industry is experiencing a slowdown. What kind of sales do you expect in this fiscal?
The current situation is difficult and our major export destination, Europe, is going through a tough phase. However, the Middle East is experiencing a boom, so overall we can maintain capacity utilisation. Exports last year were about 100,000 units and we are looking at a little more this year.
How about the domestic sales target?
It is 100,000 units for FY’14 with the Terrano contributing a good chunk and the new Micra, a good part as well.
What are the pros and cons of operating from South India?
Being on the coast, the transportation of vehicles and components is a lot easier and less costly. Having said that, there is need for improvement in infrastructure, not only in Tamil Nadu state but maybe most places in India. We have received strong support from the government and it is happening.
What is your opinion on the existing manpower available in Tamil Nadu?
There are a lot of good people here but everybody needs training which we do when we hire them.
When will you bring inthe Infiniti brand?
We are always studying ways to expand the global availability and reach of the Infiniti brand. If and when it makes sound business sense to introduce it to India, we will consider it, but we have no firm information to share at this moment.
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