October 1, 2011: Gilles Normand, Corporate VP – Africa, Middle East & India, Nissan

Corporate VP – Africa, Middle East & India, Nissan

Autocar Pro News DeskBy Autocar Pro News Desk calendar 12 Oct 2011 Views icon2058 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
October 1, 2011: Gilles Normand, Corporate VP – Africa, Middle East & India, Nissan

Under your Power 88 plan, what is the role of the Sunny and Nissan India?
We’ve announced our new long-term plan called Power 88. In this, we will first bring the brand into more visibility in order to increase customer loyalty. 88 means 8 percent of market share from 5.8 percent and 8 percent of operating margin which means sustainability of our operations. So obviously today we consider that India is key part of this plan. Looking ahead for the next 10 years, if you look at some studies you can see that the job market in India is going to grow while the Chinese market will double and the American market will just grow 40 percent.So the growth is here and if you aim to grow your global marketshare, especially in a growing market where your presence is not strong, India is it. So India is a critical part of our Power 88 Plan. Apart from India, all emerging markets are crucial.
How will this strategy pan out for India?
We started with a new plant at Oragadam near Chennai where we have a 200,000 production capacity. We have now brought in the Micra and the Sunny and it’s the best and latest we have in terms of technology. However, in order to be cost competitive in India, one needs very high localisation content.The Micra has over 80 percent of local content and the Sunny has more than 90 percent, so we are making profits. We have exported the Micra to Europe and are going to export the Sunny to Africa and Middle East. For the first year of production, more than 80 percent of the Micras were exported and till the third year, we consider that more than 50 percent of the plant's output will be exported.
Why do you think the volume ramp up for the Micra has been slow and are you happy with the way the car is selling in the domestic market?
We have a very good share in this segment. We have sold over 12,000 Micras and it is making steady progress. We then introduced the diesel and now the Sunny, so we’ve been developing as per the plan.
When do we see the Infiniti coming to India?
There is a lot of interest for the brand in the Indian luxury market. We have a possibility of bringing the Infiniti brand. We will come back when we have a clear announcement. We know people are interested but we haven’t finalised yet. We are working on it.
By the end of the Power 88 plan, how many models do you plan to have in India?
We are going to have five fully localised products in India by 2016. That’s a minimum of five. We have the Micra, Sunny and one more in this financial year. You can have a look at this product at the Auto Expo 2012 in January 2012. And then obviously, we are going to introduce more products.
What’s the update on the ULC project with Bajaj?
Let’s look at the global picture. In India our price point starts with the Micra. Below the Micra's price, you still have 40-55 percent of Indian market. If you want to be a player in India you have to be in this segment, so we have been, as you know, assessing several possibilities to enter into this sub-Micra segment, including discussions with Bajaj. We expressed interests with Bajaj into this study. We will comment on this collectively with Bajaj and Nissan together.
Will that decision, whether to go ahead with Bajaj or not, be taken in 2011?
The market is evolving. We had announced a very concrete plan with the Micra and Sunny. So for Nissan, we are doing it very strategically but for all other products we are in discussions.
You said 100,000 units in the next three years?
We are planning to sell more than 100,000 Nissan products.
By how much you see the volume going to by 2016 when you have all five models in place?
Much more than that. And as part of the Power 88 plan, we have a significant product offensive.
By how much you see the volume going to by 2016 when you have all five models in place?
Much more than that. And as part of the Power 88 plan, we have a significant product offensive.
When is the Sunny's diesel variant coming?
Very soon. This product has been developed basically in petrol versions. As you know we’ve introduced it in markets like China, but the Sunny diesel is a development for India, and we are developing it. We have been asking our engineering people whether we can pull ahead the production because there is a big swing in the Indian market from petrol to diesel.
What was the original plan?
It was 55-45 percent (in favour of petrol). The original plan was to introduce it later but now it will come before end of this fiscal year.
On sourcing components from India, your alliance partner Renault has laid a plan of two billion euros. What is your plan for sourcing from India for global operations?
It’s a common organisation and we have the Renault-Nissan purchasing organisation, the PNPO. So we are working together to procure parts. Today, India is one of the most cost competitive hubs for sourcing of parts and so it’s good for us in India not only to produce but also for exports.
Do you think India is losing its edge in terms of cost competitiveness at the supplier base because China is going up the quality curve?
Do you think India is losing its edge in terms of cost competitiveness at the supplier base because China is going up the quality curve?So far as we know, we consider India as a very cost competitive base.
Are you happy with the model of outsourcing your sales and marketing activities in India?
India is a very steady market, mature and the customer here is extremely choosy. So we didn’t want to be arrogant to say we will come with our ready recipe which works for Europe and Japan. India is different. In China, we have a 50:50 joint venture with Dong Feng Motors,which is one of our most successful ventures. So we didn’t have any problem to work in partnership that would help speed up our entry in the India market. What is interesting is that we built our dealer network in less than five years, which is half of the time our competitors took. We could have done it ourselves but it would have taken 10 years. So we have a dedicated effort for new products and to build plants and leave the dealer network to our partners. It is, indeed, working well.

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