September 1, 2012: Takayuki Ishida, MD and CEO, Nissan Motor India
Talks to Shobha Mathur on a host of topics including new model strategy, the upcoming Evalia MPV, increased localisation and exploring expansion outside Tamil Nadu.
What will be Nissan’s strategy for the Datsun brand in India?
Datsun’s is a very unique case for India. We feel that India is growing so fast that customers are always looking for a new and a better model. The Nissan brand was originally designed for mature countries but we also have demand from India and emerging countries that is different. So we decided that for these customers we should have a different brand according to what the Indian customer needs and that is why we are planning to introduce the Datsun brand.Datsun will focus on local demand and will be engineered and manufactured locally to ensure maximum customer satisfaction, but styling and technological assurance will be given from Japan as a global OEM brand. The first three markets – India, Indonesia and Russia – will have their specific products locally produced in each market. We will be introducing a sub-Rs 4 lakh hatchback in India in 2014.
As Nissan gears up to launch the Evalia MPV from the Chennai plant, what numbers are you looking at?
It is too early to talk about volumes as we do not know the customer reaction to it as yet. We will study the market acceptance of the Evalia, which will have four variants, after the launch and will decide our volumes accordingly. I would like to add that the Evalia is a very important introduction in our growth strategy for India.
What will be Nissan’s strategy for promoting the Evalia?
Export is in-built in our strategy but our primary focus is to cater to the local market needs. Our priority for the Evalia is the Indian market but we will continue to study the opportunities for export.
Of the launches planned for India by 2015-16, how many Nissan models will be manufactured at Chennai? What will be the role of the Chennai plant in future?
Nissan plans to introduce one or two models every year with a broad product line-up based on customer demand. This year, we have already announced the launch of the Evalia, our urban-class utility vehicle. We would like to move towards more localised models. The Chennai plant will play a major role for Nissan and our R&D centre, also located in the city, currently has on board 2,000 employees who provide varied engineering support globally. We will also continue to explore options of expansion within and outside of Tamil Nadu.
What is the localisation level for the Evalia and what is the plan for localisation of both engines and cars?
Approximately 80 percent of the Evalia’s content is localised. As you are already aware, Nissan Evalia is our third ‘made in India, for India’ model. We also plan to significantly increase the localisation of powertrain and parts in the Micra and Sunny. Currently, it is 90 percent for the Micra and 85 percent for the Sunny.We assemble petrol and diesel engines at Oragadam with some 15 to 30 key parts produced locally for the diesel engine while the localisation content in the petrol engines is higher. Some parts like the fuel injection system come from outside but we have plans to localise them as well within a couple of years. We also export petrol engines.
How is Nissan growing its brand in India and what is the roadmap for exports?
After the introduction of the two locally made products – the Micra and Sunny – which have boosted the numbers on the Nissan front, customers have started to recognise the Nissan brand, particularly the Sunny. We would like to catch up with the market as quickly as possible. We are exporting cars from Chennai to global markets, mainly Europe and the Middle East, as well as small parts of Africa. Nissan’s major aim is not to make Chennai an export base but to provide products to Indian customers. We plan to export close to 140,000 units of the Micra and Sunny this fiscal. In terms of components, we established the parts export centre at Chennai and are exporting to all of Nissan’s major manufacturing bases globally. We will shortly start export of engine-related parts as well as accelerator components for the new Nissan Note global hatchback in Japan. We export parts to China, Thailand, Indonesia and South Africa; these are mainly parts for the Micra and Sunny, engine parts as well as suspension parts after sourcing them from local suppliers.
Will Nissan’s production be skewed in favour of diesel cars, going forward?
The demand for diesel will continue and we will invest more on diesel to respond to market demand. If the current situation continues, then we will expand our diesel capacity and increase the localisation level.
What products are expected to come in the future from the Ashok Leyland-Nissan JV? And what are your plans for a new small car?
Ashok Leyland and Nissan have remained faithful to the vision of joining forces to create value for the Indian business customer. Our aim was to combine our expertise and experience to create high-quality, global standard products with affordable technologies, and with relevance to today’s Indian market. Four vehicles form part of the joint venture: the first, the Dost was launched in July 2011 under the Ashok Leyland badge; the second – Nissan Evalia – is scheduled to be launched; the third vehicle, an Ashok Leyland truck will be produced at its Hosur plant in 2013, and an Ashok Leyland multi-functional van will be launched thereafter. We are not looking at developing a new small car at the moment with Ashok Leyland.
As many Renault and Nissan products are badge-engineered, do the partners think that they cannibalise each other's product sales?
Renault and Nissan are Alliance partners globally but sometimes we are competitors in the marketplace. But to make manufacturing more efficient and to bring down costs, we use each other’s technologies. However, performance and styling of products depends on individual brands. Overall, the aim of the Renault-Nissan Alliance is to increase efficiencies across two companies that sell more than seven million cars a year in nearly 200 countries worldwide. Some of the biggest efficiencies come from platform and component sharing, which we have been working on with light commercial vehicles and our passenger cars for more than a decade. Renault has launched the Pulse model in India using the same platform as the Micra. However, we only move forward with platform and component sharing projects when it promotes brand integrity and customer satisfaction.
How is Nissan tackling the ongoing market slowdown in India and what do you estimate your growth to be in 2012-13?
Nissan constantly monitors external economic conditions. We are on track with our sales goals. Nissan posted domestic sales of over 33,000 units in 2011-12; we plan to double this number in the current fiscal. Last year, we exported 100,000 units of the Micra and Sunny and this year we will cross more than that.The Indian automotive industry is highly demand-driven for new products and variants. Nissan is expecting an innovative and exciting product line-up in the hatchback, sports, SUV and saloon segment in the future. We are continuously going to introduce new products and have a strong aftersales network as the Indian market is very important for us. At present, we have 72 dealers and will end this financial year with 100 dealers mostly in Tier 2 cities and through expansion in Tier 1 cities. The expansion in Tier 3 cities will bring this figure to 150 dealers by 2013.
Will you look at expanding operations outside of Tamil Nadu like Ford has done?
At this point of time, we have enough capacity and are utilising it for producing 300,000 units. Our installed production capacity is 400,000 units. However, we will continue to explore opportunities for expansion though there are no concrete plans as of now.
After the Evalia, will you look at bringing in a new product on the lines of the Ford EcoSport or the MarutiErtiga?
We will introduce new models next year after the Evalia launch in September, before the festival season. At this moment we have not decided but an SUV is a candidate. We are also looking for a sub-four-metre model but have not fully decided as yet. Even if it is a global model, it will be localised. The manufacturing base will be Chennai because of high duty structure on imports.
The importance of India as a strong export base for auto parts suppliers is increasing, says Anil Kumar M R, President a...
In an exclusive interview, Radha Krishnan, President and Founder, Detroit Engineered Products (DEP) talks about how the ...
Paul Farrell, the Executive Vice President and Chief Strategy Officer of component supplier BorgWarner tells Autocar Pro...