Global Voices: Nissan Motor's Francois Baily on why India will get a bigger role in company's future biz plan

Nissan Motor Corporation which has announced its next phase of investment in India along with its alliance partner Renault will be banking on exports of Magnite and refreshing the model over the next two years, as part of its “sustenance plan” before it enters the mainstream SUV market in 2025, followed by electric vehicles in the following years.

As part of the plan showcased by the company in Brazil recently, Nissan Motor expects a portfolio of 5 models in India by the end of the decade. The company will build overseas business from India — Nissan Motor will begin exporting Magnite to Left Hand Drive (LHD) markets like Mexico and will seek to open more markets in Africa, Middle East and Latin America.

Alternatively, Nissan has also explored the possibility of sharing the vehicle with Mitsubishi which may be rebadged, but there is no decision taken on that as yet.

The company has also extended the life of its sedan model, the Sunny, beyond 2023 for exports to the Middle East for a few more years. All these efforts will ensure that Nissan Motor is able to improve its plant utilisation as it sells just one model in India currently.

Francois Bailly, the Chief Planning Officer (CPO) of the global business unit at Nissan Motor Corporation in an exclusive interview to Autocar Professional said, “The Magnite SUV has been very well received and it is being demanded in many markets around the world.  The Magnite SUV is a great success locally and in South Africa. And we have to grow the Magnite business in more export markets to ensure its competitiveness remains. Today, we just have the right hand drive (RHD) version of the model. With the left hand drive (LHD) version, many markets will open up for the Magnite. We will explore markets in Africa, Middle East, Latin America, Mexico, as we feel we have a car that fits very well, for those markets,” he added.

The production volumes for India for Nissan brand has been hovering around 30,000 units per annum to 35,000 units per annum with the Magnite, the company needs to have more models to have a bigger say in the marketplace.

In the interim period, the company will rely on exports of LHD Magnite to bring in the incremental production volumes of about 40,000 to 50,000 units to remain viable.

Bailly, who is playing an integral part of defining the new mid-term roadmap for Nissan Motor believes India is set to play an even bigger role in the future once the mid-size SUVs and A segment electric vehicle hits the market between 2025 and 2027.

“India is the third largest market, one of the very few markets which is growing and it has a huge potential to grow, there are a lot of first time car buyers, there are many people who are growing from a motorcycle to a car. One thing, I want to emphasise is that with the cost performance of India, if you deeply localise in India, then the role of India for Nissan gets bigger,” he said.

Nissan can wait it out

The CPO at Nissan Motor who also oversees as a programme director and electric vehicles and electrification is cognisant of the pace of the development in the Indian market but says, “Nissan is a challenger brand” in the country, and for him, this time around Nissan “needs to do it right, even if it takes time – Nissan can wait it out.

 “It is fair to say that we have struggled in the past in India, we are very fortunate and happy to have Magnite, we announced two SUV and EV, is it fast enough or not, but we want to ensure that it is built thoroughly, so there is no case of failure again,” was his candid response. As the brand readies its next wave for the Indian market — a discussion on multiple powertrains is on the table right from CNG, E-Power hybrid technology and pure battery electric vehicles.

CNG, BEV, hybrid – all part of planning process

Bailly says he “is convinced India is moving to EVs,” but till they become big and reach a scale, Nissan is exploring the relevance of multiple technologies. As for CNG, Bailly says it is more relevant to an MPV (based on Triber – which is under discussion) than the Magnite Crossover. And on the E-Power Hybrid technology, he added, “Yes, we are looking at E-power for India. It is a key technology for us to meet regulations like CAFÉ as it helps with fuel economy and Co2, it is unique to Nissan and we are looking at it.” 

Born EV versus derived EV

The USD 600 million that the Renault Nissan alliance has committed to the Indian market will help both the brands expand their addressable market to over 60 percent of the demand. The belly of the Indian car market has moved up to Rs 10 lakh to Rs 20 lakh or the mid-size SUV market and that is exactly what Nissan will be coming out with a strong localisation push — a slight departure from the mass market A-segment in the past. Interestingly, both the alliance partners have A-segment EV as their core offering for the future, when the majority of the market players like Tata Motors, Mahindra & Mahindra and even India’s top two car makers Maruti Suzuki and Hyundai Motor are beginning with the mid-size SUV to foray into the electrification space, thanks to the 5 percent GST benefit for all EVs, regardless of the size of the car.

When asked about it, Bailly explained it by saying, “Consequence of the size of the market and the assets (vehicle architecture) that Nissan has in cooperation with Renault, Nissan felt that the A-segment was the best as a first car, but I don’t think, it will be the last one. If you get bigger cars, then you have a challenge of localisation, import duty, having said that we are looking at all segments.”

Clearly underlining that the plan is to have a portfolio of electric vehicles for the Indian market and much like the mainstream market — Renault Nissan Alliance is likely to address a wide variety of segments with its EVs to ensure decent scale to ensure return on investment. And much like the CMF-A and CMF-A plus platforms in the past, the localisation level of EVs too is anticipated to be high and there will be a significant export strategy to ensure economies of scale help. Bailly said, “The expansion shows the commitment to India is there, I am convinced EV is here to stay. A segment is just the start.”

Localisation in the works

On the localisation front, he added, “We are in the study phase for cell and battery localisation too.”  When asked if the Renault Nissan Alliance will try to do an ICE converted EV project to ensure faster time to market and lower development costs, Bailly said: “At Nissan, we only do pure EVs, there are many benefits on roominess, efficiencies, you don’t compromise with the aerodynamics etc. I don’t want to be arrogant. In India, you have to be super competitive and you cannot go half way. So, the multi energy platform won’t work. Nissan which is very small in India, we have to go all in or not. I don’t see competitiveness with the multi energy platform.” While most of the Japanese car makers have been slow off the mark on EVs, Nissan Motor Corporation has been an early mover in the space with the Leaf EV and the successful experience of building over million electric vehicles have played a big role in defining the clean mobiility blueprint. At the Japan Mobility Show in October, Nissan Motor Corporation showcased five different EV concepts, which are likely to make their way into the global markets. A few of them do hold potential to be launched in India, said senior company officials on the sidelines of the show.